How American Manufacturers Can Combat the Effects of Cheap Imports

American manufacturers face a formidable challenge: the influx of cheap imports. While these products may offer initial cost savings, they often come with a hidden price tag in the form of compromised quality, eroded brand reputation and undercutting of local businesses. 

Jim Palmer from BuyDirectUSA, an online directory of American-made products focused on educating consumers on the benefits of purchasing goods from American manufacturers and supporting the manufacturing industry, and manufacturing professionals delved into the far-reaching implications of this issue in a recent #USAMfgHour chat on X. Together they explored strategies to address quality concerns, navigate competitive landscapes, and advocate for policies that support domestic manufacturing. This blog recaps the discussion and provides insights that champions of American manufacturing can act on to improve the state of the industry.

Assessing the Impact of Cheap Imports on American Manufacturers

The chat began with host Palmer asking participants to share how they, their clients or their customers have been affected by cheaply made imports.

Kati “The Manufacturing Hype Girl” McDermith from Manufacturers’ News, Inc. exclaimed, “My customers often report the standards just aren’t up to snuff and this has caused quality issues! I am hearing this from the manufacturers that are sourcing parts for production. When times are tough they have to search far and wide for parts.”

McDermith’s response spurred comments from host Palmer and Chris Giglio from Rovere Media.

“We are seeing that reply across the board,” host Palmer replied to McDermith. “Cheap is not always the best option.”

Giglio added to host Palmer’s comment, noting that poor quality can result in lost customers and a negative perception.

“Sometimes sacrificing quality for cost leads to a bigger loss in profit because customers will buy once and never use you again if they’re disappointed,” Giglio said. “They also tell their friends in the industry which ultimately hurts your brand reputation.”

Nigel Packer from PelaTis Online shared the impact poor product quality can have on safety. 

“From the 1990s, goods from China have been of the ‘use once and dispose,’ (sic)” he said. “Counterfeit western products has led to a high rise in dangerous situations in the UK from house fires where people die.”

Though Packer brings a British perspective, host Palmer notes that the negative effects cheap imports have on safety are not limited to any one country.

“That is the issue around the world, Nigel,” host Palmer comments. “Not very environmentally friendly either. Local manufacturing usually by smaller companies producing higher quality is better for everyone.”

BuyDirectUSA is not a manufacturer but supports domestic manufacturing and promotes American-made products. However, host Palmer has strong ties to the American manufacturing industry. 

“I’ve heard from industry experts that cheap imports can undercut local businesses and erode the competitiveness of American manufacturers,” he said.

Replying to host Palmer, McDermith lamented: “I hate that.”

“It’s like we talked about a few weeks ago: price, speed, and quality, you can only pick 2!” Koch added to the thread. “I am curious what other factor(s) are leading people to pick imports – that is information American manufacturers can use in their messaging.”

Strategies for Addressing the Challenges of Cheap Imports

Participants were then asked to share the strategies they employ or suggest American manufacturers employ in their operations to address the challenges posed by cheap imports.

“Finding American parts manufacturers!” McDermith exclaimed. “Buyers and sourcing people are really putting time into sites like http://IndustryNet.com to source parts made in America. There’s [sic] so many out there – you just have to know where to look!” 

Piggybacking on McDermith’s comment, Whitney Koch of Keystone Click added, “If a manufacturer is frustrated by cheap imports, there are resources for finding American parts manufacturers. Procurement teams may need to invest more time finding & vetting them, but they’ll likely be happier in the long run.”

Responding to Koch, host Palmer shared this insight: “Many US manufacturers are small family-owned businesses… They may not have big teams or know where to look. I think that is why so many here are vital to helping them find those sources.”

“This is a topic a bit out of our realm since we aren’t a manufacturer,” Anna and Susannah Scheller of Capri Temporary Housing said. “But speaking from a customer perspective, hearing what a manufacturer is doing to combat poor quality (especially after a round of bad products) is super helpful in making buying decisions!”

Kirsten Austin of DCSC, Inc.‘s suggestion involved leveraging marketing. “It would be important to explain (in your marketing, as Whitney said) how cheaper upfront costs can damage your brand and reputation in the long run (as Chris said),” she asserted.

Responding to Austin, host Palmer said, “Absolutely, and teaching your customers how the bottom line is more than the amount made per product. Customer acquisition is not cheap so help retain them.”

“[Put] [t]he emphasis on where the product is made,” Packer interjected. “The safety record and quality. Post multiple demonstrations of the quality of US Made on YT [YouTube].”

Packer’s interjection spurred a string of responses from host Palmer and Koch.

“Exactly and I am certain, you feel the same in your home country Nigel as we do here about the quality of products you purchase,” host Palmer commented.

“Great idea for demo videos, Nigel!” Koch emphasized. “More and more technical buyers are doing research online, and video is helpful at moving them along their buying journey.”

In response, Packer said: “Whitney, they are so easy to make and do not have to be ‘Hollywood production.’ If you have a production line making the products then it is easy to post a short clip.”

“Yes and those do have a huge impact, Nigel,” host Palmer affirmed.

Giglio shared another marketing perspective, which sparked a thread on “Made in the USA” labeling.

“[It is very much the trend to promote products as ‘Made in the USA,’ he said. “Leaning on your goods being fully produced domestically is a major benefit to plenty of consumers that should definitely be in all of your branding and advertising.”

“I shared a post about this on LI [LinkedIn],” Ruby Rusine of Social Success Marketing replied. “It’s a great read for U.S. manufacturers, consumers and legislators, IMHO. The post is on building a domestic supply chain. Here it is: https://industryweek.com/the-economy/competitiveness/article/21282666/building-a-domestic-supply-chain-is-our-winning-strategy.”

The thread then turned to the authenticity of “Made in the USA” labeling.

“As long as they are completely honest about Made in USA, we can count on @aliciawitty to call them out on it like she did in her movie ‘I’m Not Ready for Christmas,’” host Palmer said.

Giglio emphatically concurred. “Yes! There are plenty of fakers, a big tagline I’ve seen for people trying to front as USA Made is a ‘US Owned Company.’”

“Right? A subtle but important difference here, Chris…,” the Schellers commented.

Host Palmer shared his experience with “Made in USA” fakers. “Yes, over all the years we have been supporting US manufacturing, we have only come across one company that changed their production location but kept the ‘Made in USA’ label,” he said. “We called them on it and removed them from our site.”

“I wonder if some manufacturers don’t realize there are rules around using ‘Made in USA,” Koch pondered.

To conclude this portion of the discussion, host Palmer suggested these strategies for addressing the challenges posed by cheap imports.

• Investing in innovation to differentiate products
• Lobbying for fair trade policies
• Emphasizing the value of domestically produced goods

How American Manufacturers Ensure Quality Amidst Competiton

The chat then moved into a discussion on how American manufacturers can ensure the quality and reliability of their products when competing with cheap imports.

“Focusing on a robust and continuous quality control protocol would be key,” Austin contended.

Felix P. Nater of Nater Associates said, “Deliver Knock Your Socks Off Quality Services [sic].”

“Solid vendor relationships are important,” Koch claimed. “Have an open dialog with your manufacturing partners, know their standards and quality processes, and have additional vendors in mind if you need to switch.”

Packer brought up the importance of internationally recognized quality standards.

“Quality assurance marks such as ISO 9002,” he said.

“Speaking from the customer side of things, quality will always be remembered,” the Schellers answered. “An initial drop in sales might happen with new, cheap, imports. BUT people who rely on quality will always come back to it.”

The Schellers’ response prompted an exchange with host Palmer and Rusine on product quality.

“I wouldn’t want to be in the position of making quality and reducing it,” he said.

The Schellers agreed. “Absolutely! Holding onto quality production even in a market that may be getting flooded with cheap products is hard, but extremely important to longevity,” they said. 

“I think that is where communicating with existing customers comes in handy,” host Palmer asserted.

“Quality ain’t cheap,” Rusine declared. “The ROI for quality is many folds. I can buy cheap and then toss it after a few uses. I can imagine the impact to my pocket as well as the environment…”

Rusine had two answers to host Palmer’s question, both of which created active side conversations. 

“From a consumer perspective, it really depends on where the import is coming from and if they have a history of low-quality imports and depending on what is being imported, as well,” Rusine responded. “Those are factors that set my high or low expectation/s.”

Host Palmer responded with his perspective as a consumer. 

“[I]t’s a sad reality that we have to purchase any low-quality goods,” he said. “To me, it’s throwing my hard-earned dollars away.”

Rusine described her experiences with imports in a foreign country.

“Lived in the Philippines (I’m originally from there) for a few months recently,” she said. “I can tell you this…most of the imports there are much much lower in quality than our imports here in the U.S.”

She also puts much of the responsibility on manufacturers themselves, not just to make high-quality products but to teach why quality manufacturing is important.

“Manufacturers have a big role to play in terms of educating its [sic] consumers about quality and longevity of what is out there and long-term impact (pocket and environment), etc. Not just greenwashing,” she pronounced.

“Some laws regarding planned obsolescence would be good to have on the books,” Koch chimed in.

Adding to her perspective as a consumer, Rusine said, “Longevity of the product matters to me. I can likely buy something cheap and it’s broken after only a few uses. PLUS there’s the environmental impact. I’d pick something more expensive of the same that will last me long. The cost long-term is what I look at.”

Her consumer point of view started a back-and-forth on how manufacturing quality has changed over time. 

“Ruby, I come from an age where we could repair and reuse the products that our parents purchased. Getting a lifetime of use out of them,” Packer recollected. “Today’s products are made with obsolescence built in.”

Replying to Packer, host Palmer said, “I still work on things and fix them until I no longer can.”

“I have a hammer that I have had for 50 years,” Packer boasted. “It has had 4 new handles and 2 new heads, and it is as good as the day I purchased it.”

“I actually love going to thrift stores and looking for Made in USA treasures,” Ruby confided. “My cookwares are mostly Made in USA. My husband looks for tools as well from years ago. Very different make and quality.”

To ensure the quality and reliability of products, host Palmer recommends manufacturers implement stringent quality control measures, continuous improvement initiatives, and educate their customers on the benefits of buying  American-made products are crucial.

How the Government Can Support American Manufacturing

Moving the conversation from what manufacturers can do to counter the impact of imports to the role government should play.

“Such a tricky question, because it dives into economic philosophy instead of just quality questions,” the Schellers admitted.

Host Palmer agreed.

“It can be difficult to answer,” he said. “I myself don’t like politics but it seems like eventually we had no choice but to start watching them.”

Replying to host Palmer, Koch commented: “Pretty much every aspect of life is political. It behooves us all to be aware and engaged, especially at the local level.”

Agreeing with Koch, the Schellers added, “At some point, politics affects us all.”

“Yes it does,” Palmer conceded. “[B]ut I do like to remind them they are elected representatives and need to put their constituents first over any lobbyists.”

Other chat participants were split on the role the government should play.

“Manufacturers in all countries want consistency and stability,” Packer pronounced. “Exchange rates, employment markets and infrastructure. Unfortunately, governments and politicians don’t understand this. The less they meddle the better it is for manufacturers.”

Koch was of a different mind.

“I believe bringing more jobs back to America would help, and President Biden’s Build Back Better Framework included a tax to disincentivize corporations from sending jobs overseas. https://whitehouse.gov/build-back-better/,” she shared.

Though not disagreeing, host Palmer responded with additional national-level measures he believes are necessary to turn the tide in favor of American-made products.

“I think it will take even more,” he said. “I think a national push for consumers to demand made in USA would have a tremendous impact as well.”

In her response to host Palmer, Koch assented and included what she views as a hindrance to this.

“For sure. For as much as people talk about wanting to bring more jobs back to the U.S., they seem to miss that they are part of that,” Koch stated. “We as consumers have to be willing to pay more.”

Expanding on Koch’s reply, host Palmer said, “Yes, we will pay a bit more but that means people are taking care of their families from those jobs. At the same time, technology will help keep those costs lower than in previous decades while productivity improves.”

To close out the discussion on politics, host Palmer listed government policies that could help level the playing field and protect American manufacturers from unfair competition. They include tariffs, subsidies for domestic producers, and enforcement of fair trade agreements.

How American Manufacturers Can Mitigate the Challenges of Cheap Imports

Wrapping up the chat, participants shifted the focus of the discussion to how American manufacturers can work together to help mitigate the negative effects of cheap imports.

“Reminding the market that a sure-fire 50-year purchase today is better than a new purchase every year is a great way to combat the cheap costs of imports,” answered the Schellers.

Koch suggested manufacturers broaden their concern from their individual businesses to the benefit of the entire industry.

“Manufacturers could work together to change governmental policies, promote the industry, promote American-made,” she said. “It can’t be just about keeping yourself in business. We need some big-picture thinking and action.”

Host Palmer affirmed Koch’s response, adding: “Yes 100%. Uniting and helping one another is key. Yes grow your business but joining with others can have a positive national impact for manufacturing.”

“Set up industry sector support such as your organisation Jim,” Packer suggested, referring to BuyDirectUSA. “Use the combined synergies to publicise the ‘Made in USA’, ‘Supporting USA jobs’ and vote for a government that puts ‘USA first’. In my case ‘UK first’.  With an open trading policy, we will always have to purchase from other nations, however, they will be of the same quality level as our own.”

Host Palmer’s final recommendations echoed participants’ responses.

“Collaborative efforts such as industry alliances, sharing best practices and collective advocacy for policy reforms can amplify the impact of individual manufacturers’ efforts to combat cheap imports,” he said.

Conclusion

The dialogue in this #USAMfgHour chat on combating the effects of cheap imports underscores the pressing need for American manufacturers to take proactive measures. 

From prioritizing quality control and fostering robust vendor relationships to advocating for fair trade policies and emphasizing the value of domestically produced goods, there’s a multifaceted approach to navigating these challenges. 

By fostering collaboration, amplifying industry alliances, and collectively advocating for policy reforms, American manufacturers can strengthen their resilience and competitiveness in the face of global market dynamics. It’s not just about individual businesses surviving: it’s about safeguarding the integrity and vitality of the entire manufacturing industry for the long haul.

About #USAMfgHour

Anyone who champions U.S. manufacturing can join in on a new conversation each week on X using the hashtag #USAMfgHour. The chat starts at 11 a.m. Pacific Standard Time/2 p.m. Eastern. Share positive blog posts, helpful articles, news, important information, accomplishments, events, and more with other manufacturers and supporters from throughout the country.

Are you interested in hosting a #USAMfgHour chat? Contact organizers @DCSCinc, @SocialSMktg, and @KeystoneClick.

To learn more about how Keystone Click can help you level up your online presence, contact us.