The Economics of "Buy American"
The other side of margin competition, order volume, is another area where the economies of scale can skew in American manufacturing's favor. At high order numbers, say something like 20,000 drawstring backpacks, the value of going overseas is obvious. Even with a marginal price difference per unit, the saving would be substantial. Slide the volume of items in the other direction however, like with an order for three wristwatches for a years-of-service award, and American manufacturing becomes more competitive. Quality and the appeal of the item become the differentiating factors, rather then price. Combined with their generally better customer service, customization options and lower shipping costs, American manufacturers that focus on high-quality, low-volume orders can easily compete with their overseas peers (possibly a reason that manufacturers of awards and prestige jewelry like watches, are easier to find stateside, compared to pens or drinkware).
Lesson Learned: American-made does not have to mean more expensive, at least for your business. Items with a high perceived value should allow you to pass the increased expense on to your client.
A third influence on American manufacturers is the availability of skilled labor. For certain items, it seems the appropriate workforce simply doesn't exist stateside. In a recent New York Times Article, "How the U.S. Lost Out on iPhone Work," computer giant Apple, which reportedly uses over 700,000 contractor employees overseas, responded to the question as to why it didn't keep its manufacturing stateside. Quoted from the article, it states:
"Another critical advantage for Apple was that China provided engineers at a scale the United States could not match. Apple's executives had estimated that about 8,700 industrial engineers were needed to oversee and guide the 200,000 assembly-line workers eventually involved in manufacturing iPhones. The company's analysts had forecast it would take as long as nine months to find that many qualified engineers in the United States."