 Special Focus - April 2008  |
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Made in the USA
In this day and age, is keeping business in the States really as easy as apple pie? While eco-friendly and socially conscious companies are turning heads in the home fashions industry, the red, white and blue labels also seem to be gathering more and more attention. From companies that cater to niche market retailers to the big-box stores, keeping business in the U.S. is not so much of a pride issue as it is essential to investing in the country’s industrial and economic future. Originally from Argentina, Catherine Mariasch of Mariasch Studios, Inc. in Lynbrook, NY, has a unique perspective on the American market. Having lived here for 20 years, while Mariasch’s heart is with American made, her passion for keeping her gifts and decorative accessories business in the U.S. is more than emotional. “So many people who like the detail of my products think that it’s been done overseas, but I explain that we are incredibly capable in this country of doing these tasks,” says Mariasch. “We have to teach customers our capabilities of what can be done and how to work with us.” Mariasch explains that the craftsmanship that used to be reinforced by labor unions decades ago is not as easy to come by these days, due to so many businesses outsourcing to other countries. In effect, a negative cycle has formed—the more business that leaves the U.S. creates a greater depletion of skill sets that were once seen as essential in the workforce. For example, it is a challenge for Mariasch to find workers like seamstresses because sewing is no longer taught as general knowledge. “We used to be all about the quality, we used to take pride and care in the work,” says Mariasch. “That tradition may return if we keep business that requires it in the country. There are entire cities that have been displaced on one product. In the textile industry, it’s the same thing. When business goes overseas, I find that people who live in the cities are most severely affected by these decisions. They will turn around and demand U.S.-made materials because it all comes full circle. It’s about the workers trying to bring back their own work by bringing business back to the U.S.”
Mariasch cites companies like Coca-Cola, an all-American global enterprise, for which she is currently making product, that will only sell and use American-made products. “They demonstrate how things can change,” Mariasch asserts. “If we all start from there—a large company declaring that—look how far it trickles down to small companies like me, who are creating product for them.” As another small, made-to-order company that markets product to niche and luxury markets, the “made in the U.S.” stamp serves as a big “plus” for Dana Brandwein Oates of dbo Home, LLC. Oates produces made-to-order, hand-made tabletop ceramics in rural Sharon, CT. Oates says that while more and more people are taking notice about eating and purchasing locally and becoming more socially conscious, as a designer in her own business, she feels that same way about preserving local businesses. “Challenges develop as I want my business to expand into designing other home accents,” explains Oates. “I have looked into finding larger manufacturers and outsourcing because it’s hard to find resources—I have to find local help. But if more and more people bring back or maintain their craftsmanship here in this country, in turn, it will make finding resources easier.” Maria Capotorto of Ancora in New York also finds that she can conduct operations in the U.S. due to the nature of her business, which uses recycled materials like art posters, newspapers, catalogs or maps to make fashion and home accessories, even if it means her product costs more for the consumer.
“We find that customers do not mind paying slightly higher for a product that is special and made to fit their custom needs,” says Capotorto. “More and more customers are looking for this in a vendor. Our products are made custom and change often, and if we keep the production here locally we can cater to our customers in a very competitive way.” Another key factor in manufacturing domestically or abroad is the exchange rate of the dollar in the global marketplace. Back in 1983, Heritage Lace was originally an importer of lace products from Belgium, France, Germany, Liechtenstein and the Netherlands because of their quality and favorable currency exchange rates with the dollar, explains Tim Heerema, ceo. “But over time, with price increases, less favorable exchange rates, import duties and occasional snags in communication and product delivery, we began a search for American mills with comparable quality,” says Heerema. Heritage Lace found a mill in Oxford, NC, where German-heritage lace makers used the same technology and materials as the Europeans. It quickly became the company’s principal supplier. Heritage ultimately acquired the mill in a four-year phased acquisition completed in January 2008. The mill enabled Heritage to become an integrated manufacturer and marketer of window coverings, specialty gift and home décor products, with 90 percent of the line made in America. “While we have been encouraged by some of our customers—particularly in the intimate apparel industry—to develop an Asian presence, the recent devaluation of the dollar has made our products more price competitive—not only internationally, but also domestically,” says Heerema.
Allison Rosson from Mike & Ally in New York, designer and manufacturer of luxury bath accessories since 1991, has also found that conducting business in dollars is beneficial. “No fuss with the exchange rates or dealing with the fluctuation of the Euro has been a plus for our business, especially among international buyers,” says Rosson. Though the cost of business in the U.S. is not cheap, like paying rent in New York, Mike & Ally’s role as a luxury manufacturer seems to make the challenges balance out. “If we manufactured in Asia, we would need a huge inventory with massive space,” says Rosson. “We would not be able to keep up the ability for quality control and uniqueness or even customer service.” Vicky Grant, creative director of Manual Woodworkers & Weavers, Inc. which has been offering home décor products in the U.S. for 75 years out of Hendersonville, NC, also attributes cash flow to domestic production. “When it comes to achieving constant change and evolution, domestic production is fertile ground,” says Grant. “Domestic production transforms into real dollars. Fresh new constructions and designs paired with quick reaction times is the equation that domestic production owns.” Grant also explains that the paramount reasons for manufacturing domestically are quick response, short lead times and smaller run sizes resulting in smaller minimums and savings on shipping costs. “Naturally there are savings on shipping costs. But even if you do manufacture overseas, taking advantage of domestic fulfillment is cost effective,” says Grant. “Importing pillows and comforters already blown can fill up a container a lot more quickly than flat ones. Our clients with products manufactured overseas benefit from our domestic fulfillment. Our manufacturing services include pillow and comforter blowing and quilting, labels, packs and ships to customer specifications.” Grant says that manufacturing in the U.S. goes beyond a matter of pride, as it is now verging on a feeling of preservation. “Quality is an issue with the recent problems associated with toys, toothpaste, and more coming in from overseas,” says Grant. “The fact that U.S. manufacturers adhere to strict environmental standards is an important factor and a growing concern among more and more Americans.” Not all companies are able to conduct all operations in the U.S., but as a company that uses raw materials from Europe and then details goods domestically, Anali Exquisite Needlework is able to bank upon some of the advantages of operating out of Redmond, WA. According to Sarah Wallace, Anali has been able to keep most of its business domestic due to the structure of its business model. Much of Anali’s work is made-to-order where customers select from a variety of fabrics, designs and colors to configure orders within a SKU framework. Anali is able to respond to customer desires quickly, and reduce the risk of incorrectly projecting what products will sell. Wallace says that to transfer manufacturing overseas, Anali would have to be more rigid in product offerings and assume the risk of ordering finished products in large quantities. “Once you commit to finished inventory in stock, you lose flexibility to respond to what the market really wants,” says Wallace. “This would be a big shift in our business model: moving away from a high touch ‘made-to-order’ model to a lower touch ‘made-to-stock’ model.” But though there are advantages to manufacturing in the U.S., Wallace doesn’t see it as the deciding factor for an Anali customer. “Our customers like our beautiful imported materials from Italy and Turkey and the high level of individual service at affordable prices that our business model provides. That’s what is unique about Anali. Being made in the U.S. is a nice thing to talk about and is a small plus, but it does not drive the ultimate buying decision.” While many smaller businesses contribute much of their success to their domestic business models, larger design and manufacturing company Creative Bath sells to department stores, mass merchants, specialty chains, mail order catalogers and home centers worldwide, with most product made in three facilities in Central Islip, NY. Bob Weiss, director of sales and marketing, says that while Creative Bath doubled its domestic manufacturing in 2007 and is giving China competition, like smaller domestic companies, finding and paying for labor is a major challenge. “As a debt-free company receiving assistance with tax abatements from the state of New York, combined with great pricing on raw materials, the only thing that we cannot compete with China on is labor ...but that is also leveling out,” explains Weiss. Weiss says that what they lack on the labor side, is made up in freight savings because Creative Bath can react to best sellers in days, instead of months. “This past gift show, many new global customers who purchased from China switched their business to Creative Bath,” says Weiss. “The consumer is also more securely purchasing ‘American Made’ products. Retailers are finding the quality from China is also slowly decreasing and the prices are steadily increasing. That red, white and blue flag on our retail packaging is very, very appealing and comforting.” As these businesses have indicated, given the right business model, keeping operations in the U.S. is not only an investment in the ability to make quality product, but in the future of this country’s industrial and economic state as a whole. Resources
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