We just lost an opportunity with a university because the facility manager refused to buy any furniture that wasn’t “100% made in the US”. With that simple sentence, he unknowingly eliminated every major manufacturer of seating in the country, including his current chair standard.
The question is; How do you answer this objection without insulting your client?
Let’s start by understanding what “Made in the USA” really means. For most products, unless they are automobiles or items made from textile or wool, there is no law requiring manufacturers to make a “Made in USA” claim. But if a business chooses to make the claim, the Federal Trade Commission’s Made in USA standard applies. Made in USA means that “all or virtually all” the product has been made in America. That is, all significant parts, processing, and labor that go into the product must be of U.S. origin. Products should not contain any – or should contain only negligible – foreign content.
The FTC goes on to explain there are two types of claims- unqualified and qualified. Unqualified claims are those that meet the above definition that all (or virtually all) has been made in the USA. Unqualified does not indicate the product is not qualified to have the label- just the opposite. Unqualified claims are for only those products that are made with 100% American materials and 100% American labor. Qualified claims indicate that the product is not entirely of American origin. The FTC further explains that qualified claims can be made if the amount or type of a product’s American content is described accurately.
This is where things get confusing for our clients. Given that the office furniture industry, per the May 2016 Office Furniture Manufacturing Market Research Report, has 3.6k companies employing over 110k people and sales of over $26B the stakes are high. Especially when you consider that almost 8 in 10 American consumers say they would rather buy an American-made product than an imported one, according to a Consumer Reports survey in May 2015.
The dirty little secret in our industry, and it’s not much of a secret anymore, is that everyone sources parts and/or labor from overseas. From the casters, mechanisms and pneumatic cylinders brought in from across Asia to the textile factories in Macau, Mexico, and Malaysia, chairs are pieced together from around the globe. Even Herman Miller, the self-proclaimed yardstick of ‘Made in the USA’, admits that only 90% of the economic value embedded in Herman Miller's U.S. made products are sourced in ‘North America’. Getting information from the other leading companies is virtually impossible. That, however, doesn’t stop them from wrapping themselves in the ol’ Red, White & Blue when it comes to presenting themselves to my potential university client apparently.
The reason that they source these items from overseas vendors is the same reason that we import the whole chair from Taiwan; to save their clients’ money. At the end of the day, by lowering the office furniture budget of our end user we’re allowing their university, business, or hospital to spend that money elsewhere. With other US companies.
So what about the whole Made in the USA, patriotic spending shtick?
“It’s just nonsense,” says Laura Baughman, an economist and president of the consulting firm Trade Partnership Worldwide. She calls the “Made in the USA” label “outdated” and “completely misleading,” and says that “most people are wrong” in their perceptions about the impact of imports. Imports support more than 16 million American jobs. A large number of these import-related jobs are union jobs, held by minorities and women, and more than half the firms involved in direct importing are small businesses, employing fewer than 50 workers, such as Outcome Seating.
Put a more direct way, "Buy American" is a dumb idea. It would not only not create prosperity, it would cost jobs and make us all poorer” says David R. Henderson, an economist at the Hoover Institution. Echoing this sentiment is Robert Carreira from the Foundation for Economic Education. “The best thing Americans can do to save American jobs is to be smart shoppers and purchase goods that offer the highest quality at the lowest price—wherever they are made. Merely acting in one’s own self-interest is the best means of advancing the interests of society.”
I have provided links to many of these articles and I hope you’ll take a few minutes to give them a look. It is easy to be put on the defensive by the fact that we are importing chairs but I think the country, and particularly the contract furniture market, has embraced the high quality/lower-priced products that have been aggressively gaining market share since the early ‘90s. The days of bad stereotypes and negative connotations are over. We don’t want to be apologizing for providing a great chair at a great price while at the same time not playing the games that some of our competitors play to posture as a Made in the USA company.
Rob Galvin, VP of Sales, Outcome Seating.
Engineered in Europe.
Manufactured in Taiwan.
SOLD in the USA.