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  • Writer's pictureDan Lake

Made in the USA vs Based in the USA: Why does it matter?

You’ve probably heard the phrase “Made in the USA,” and you’re likely aware of the pride and the confidence “Made in the USA” brings with it. But you might not be as familiar with the idea of “Based in the USA” — and why that’s significant. We can assure you, in the ever-changing global economy, that being based in the USA is just as important — and maybe even more important — than just having a product made with American hands.

So, why the distinction between the two?

Let’s go back in time to the 1970s, when the US started shifting manufacturing overseas, primarily to China. Businesses in the US did so to chase higher profit margins, enlisting low-wage workers in China to support that mission. In less than 20 years, more than 80% of US manufacturing moved to China (giving rise to "Made in China"), even though the business headquarters remained in the US ("Based in the USA"), providing design, administrative services, sales, marketing, and support — in other words, all of the jobs enabling products to be made and then selling products once they’re made.

Fast forward to today, and you’ll see outsourced manufacturing hasn’t slowed down. In fact, there’s a new, concerning phenomenon happening that’s tipping the balance of the global marketplace even more in China's favor.

The two biggest retailers in the US, Amazon and Walmart, are locked in a battle to see who can deliver the lowest prices to American consumers. As a result, they’re now actively replacing these American businesses that were "Based in the USA" with Chinese businesses that are "Based in China" and running their entire operations from China — including all those jobs that used to be filled by US workers. This means a dollar spent online used to support an American business "Based in the USA" that may have used outsourced manufacturing, whereas now the entire dollar is being shipped overseas to support the Chinese economy.

Why does “Made in the USA” matter?

Why does this matter? American jobs, product accountability, product quality, product safety, industry regulation, environmental regulation, human rights, and supply chain all matter. A lot of thought, work, innovation and legislation has gone into creating the standards and best practices that make “Made in the USA” and “Based in the USA” mean what they mean.

Increasingly, we’re relying on a nation half a world away — with a very different approach to how people are governed and even how people are treated — to manufacture many of the products that come back to the US. These are products we put on and in our bodies, products we rely on for the work we do and even for our basic safety needs.

Americans have prided themselves for decades on being leaders in the global marketplace and making "Made in the USA" mean all that it means. But now, the US is in danger of ceding that title to China as more businesses depart American shores for the promise of cheaper labor and access to the network American consumers are unwittingly enabling.

There are even some grave security concerns coming out of the shift in the economic balance between the US and China. A recent New York Times article delved into the security concerns around the global semiconductor market, observing that while the US still leads in the development and research toward making better computer chips, the vast majority are produced outside the US.

As President Joe Biden assessed, “China is doing everything it can to take over the global market, so they can try to outcompete the rest of us and have a lot of applications — including military applications.”

The hidden costs of products not made in the USA

So while we might be celebrating being able to purchase goods that come over from China at slightly lower prices, we have to ask the question, "At what cost?" Those “savings” are coming at the expense of high-paying jobs that have moved from the US to China, taking the label “Based in the USA” along with “Made in the USA” — taking away all that those labels mean to consumers around the world, who have known the quality of American made products for generations.

In addition, the money Americans are spending on those products now leaves the country to support the growth of the Chinese economy. Even General Electric, one of the most iconic American brands around, saw its appliances division taken over by Haier — a Chinese company now providing smart appliances to many American households — in 2016.

When we look at businesses that are truly “Based in the USA,” it means the headquarters are here. The design, strategy, and owners are in the United States. Tax money generated by the business stays in the US to support Americans. Workers are employed here. And when a question arises for a consumer or for anyone else who interacts with that business, there’s someone here in the US to answer that question.

How to let consumers know you’re Made in the USA and Based in the USA

If you believe “Made in the USA” and “Based in the USA” are labels that indicate quality and instill pride, and you share our goal of promoting the return of manufacturing in the US, you have an opportunity to align with us.

Today, Rivly is the only ecommerce marketplace to even offer a filter for “Made in the USA,” and though we’re off to a solid start in showcasing businesses who offer American-made products, those results aren’t quite as robust as we’d like them to be.

We’re inviting more of our favorite American businesses to join the platform, and adding more and more of them daily to show their products are made in America by American workers. We’re now asking our customers to do the same.

At its core, this is a community business, as we’re bringing together the greatest American businesses with American shoppers in one place. When the “Made in USA” filter doesn’t offer you what you need for selection, you will be comforted to know, at a minimum, the remaining products offered are all provided by businesses based in the USA, owned by US citizens, and giving jobs to American workers.

Furthermore, you can be assured your questions are being answered with accountability and integrity. In fact, our platform is designed to reward the businesses that do the best job of helping customers, and not merely just those businesses able to provide the most inexpensive products.


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