Americans want U.S. goods, but won’t pay a premium for them

July 11, 2018

Fully 70% of Americans say they love to buy products that are “Made in the USA,” based on findings of a Reuters/Ipsos poll. They are less enthusiastic, however, about paying a premium for them.

The poll, fielded in late May, gathered responses from 2,857 people nationwide, including 593 U.S. adults who made less than $25,000 annually; 1,283 who said they earned between $25,000 and $74,999 per year; and 805 who claimed they earned more than $75,000.

Out of that sample, more than one-third (37%) of respondents said they would refuse to pay more for U.S.-made goods versus imports. Of those who were willing to shell out slightly more money, 26% said they would only pay up to 5% more to buy American, and 21% capped the premium at 10 percent.

Lower-income Americans were the most enthusiastic about buying U.S. goods, the poll showed, despite being the least able to afford paying extra for them.

Indeed, the biggest U.S. retailer is well aware of the priority that buyers place on price, above all else. A spokesman for Wal-Mart Stores told Reuters that its customers are saying “that where products are made is most important, second only to price.”

The good news for U.S. factories is that Americans like the quality of many domestic goods. Thirty-one percent of respondents said American-made cars are the best in the world. German cars were voted best by 23% of respondents. What’s more, 38% said U.S.-made clothes were best.

Still, domestic manufacturers could be in trouble if they fail to capitalize on perceptions about the quality of their products while also keeping a tight lid on costs. Factors such as cheaper domestic freight and a desire among retailers to carry lower inventories can help make up some of the cost differential.

To be sure, some manufacturers can command a big premium for American-made products. Klein Tools—a privately held company based outside Chicago with annual sales of $500 million—makes hand tools that are highly sought after by electricians and other workers. A pair of 9-inch Klein pliers sells for about 30% more than a comparable import.

But betting on the allure of American-made goods can be risky. In 2012, High Point, North Carolina-based Stanley Furniture brought back production of cribs and other baby furniture from China to a U.S. plant—wagering that parents worried about a string of Chinese factory quality scandals would pay $700 for cribs nearly identical to imports selling for $400, the pollsters said. Customers refused to bite, however, and the High Point factory closed in 2014.

Still, Stanley’s CEO Glenn Prillaman said the Trump administration’s emphasis on American-made goods is a hopeful sign that resonates with “people that work for a living,” because they can see how it impacts their own jobs. “The lower-end consumers certainly care, and that’s a good thing,” he said. “But they’re also not in a position to pay the premium.”

Indeed, U.S. President Donald Trump rode into office on promises of bringing back manufacturing jobs and boosting economic growth; and has criticized companies—most recently, motorcycle producer Harley-Davidson—that move their own production overseas, Reuters reported.

Research contact:

Leave a Reply

Your email address will not be published. Required fields are marked *