The Made in China debate in the promotional products industry confuses me.
An article in a St Louis paper got me thinking about the sensationalist approach the media has towards our industry as it relates to the Made in China issue. While this article highlights the irony of promoting U.S. jobs by handing out Made in China carabiners, I wanted to explore the broader issue of what "Made in China" means to the North American economy.
I did some analysis as I was trying to determine if buying from China was such a bad thing when it came to value generation in the North American economy.
Based on these numbers, I am not so sure that the offshoring of manufacturing has been as bad as the press makes it out to be. Our industry is an easy target, but I also think we need to be quick to point out the value that accrues to North America.
The article focuses on a carabiner that many of us in this industry know well. For this example, I found this one on the Ariel website.
Based on the analysis, $4,800 of value was kept in the U.S., while only $1,020 of value was retained in China. Sure, if the product was made in America, more value would accrue to the U.S., but would the sale have ever been made in the first place if this carabiner was made domestically? Would we rather take $4,800 of value to China's $1,020?
Put another way, purchasing goods from China has allowed the industry to grow considerably during the past 15 years. Marketers looking to use our medium have a range of options available to them at all price points. While some jobs have been lost, extraordinary value has been created in other areas (distributor jobs and supplier decorators, for example).
I’m an advocate for a strong local economy. However, I don’t believe it makes sense to protect high wage jobs domestically when importing goods can generate greater economic benefit at home.
What do you think? How has doing business on a global scale helped or hurt your business?
Note to reader: 35% of my distributorship’s sales are generated from North American produced goods. We buy locally produced goods when it makes sense to do so (ie. When it accomplishes the client’s marketing goals). The other 65% of our business is generated by sourcing products offshore through our network of global suppliers.