The Made vs. Assembled in America Issue

Appealing to consumers’ patriotic nature is an effective form of advertising, and it starts with the US manufacturer’s labeling of goods and products.  Companies of all sizes have profited from highlighting a product’s country of manufacture.

The Boston Consulting Group reports that Chinese and American customers are prepared to pay a minimum of ten percent extra for goods bearing ‘Made in USA’ labels.  This applies to products such as household appliances, baby food, apparel, and electronics.

“Made in USA”

To qualify for a ‘Made in USA’ or ‘Made in America’ label, a product must be “all or virtually all” manufactured in America according to the Federal Trade Commission (FTC).  This encompasses all fifty states, US territories, and the District of Columbia. Products bearing this label should have little to no overseas content.  However, some parts may be imported from other countries in order for the US manufacturer to successfully produce.  This is usually based on availability of certain raw materials and/or the assembly requirements of certain components or parts of a product.

“Assembled in the USA”

In contrast, products displaying an ‘Assembled in the USA’ label will contain a higher percentage of imported components but will be physically assembled in America.  The FTC states that these products need to have undergone a significant transformation on American soil.  What this means is a good portion of the parts and components, whether imported or manufactured in the US, will need to be assembled together directly in the US and must produce a distinct product that is unique to the assembling company.

Label Fraud

There is a downside to consumers’ reliance on the “American Made” labels.  Labeling fraud is on the rise.  More and more products are falsely displaying ‘Made in USA’ labels.  The main reason people support ‘Made in USA’ products is because they appreciate the importance of American manufacturing.  It accounts for over twelve percent of US GDP and sustains more than seventeen million jobs throughout the country.  The FTC continues to remain as diligent as possible when it comes to regulating US manufacturers displaying the ‘Made in USA’ and/or ‘Assembled in USA’ labels as well as helping educate consumers about how and where their products and the components that make up those products are manufactured and assembled.

Manufacturing in China

Many US companies have been outsourcing their manufacturing to China for decades.  This offers numerous benefits but there are many variables that influence the success of such an approach.  The most important variable is how well a US manufacturer is tied to and communicates with their production factory in China.  Other variables such as the percentage of labor that is required to produce a product, the type of product, and the quality of the materials that make up its design, greatly influence the final success of an offshore manufacturing project.  Throughout the world the cost of materials is fairly consistent.   The lower Chinese labor rate is the major reason companies opt to manufacture overseas.   For US companies that choose to work with a full-service contract OEM manufacturer like ITI Manufacturing, high-quality production, as well as service excellence, is always a guarantee.

American Guaranteed China Manufacturing

Debates about ‘Made in USA’ and ‘Made in China’ labeling may never be fully reconciled.  What is certain is that companies like ITI Manufacturing will continue to provide professional quality service and a successful China manufacturing process for US manufacturers interested in outsourcing all or part of their products overseas.  Put our 45+ years of experience to the test by speaking with one of our experts today. Call (281) 242-7030 for more information.

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