Remember cassette players with “Made in Japan” stamped on them?
Um, yeah, me neither. 😉
But to those who’ll readily admit they do, that label once meant something special.
Interestingly, in the days after WWII, that inscription meant the product was cheaply made in a rebuilding nation. But in the 1980s, as companies like SONY and Toyota began besting domestic product quality, “Made in Japan” became a badge of merit.
Times sure do change.
And these days, domestic manufacturing can be a product-maker’s golden ticket.
“Where is made?” is one of the most common questions asked on DTC product chats. The desired answer is obvious (as is a likely desire to roast the product if the response is “China.”)
The trouble has always been cost.
So many startup I’ve known have set out to manufacture their amazing new thing domestically, only to discover that doing so would obliterate their product’s financial viability.
A few have found a way. But the vast majority have begrudgingly sourced overseas.
My team and I have been helping a client leverage their 100% USA-made advantage. Their competitors are sweating bullets over Trump’s proposed 60% tariff on Chinese imports, while my client’s pricing will stay rock solid.
Just imagine how this would affect avid video gamers, tech-based businesses and tech fans.
Laptop prices could jump by around 50%. The cost of video game consoles could rise around 40%, meaning the new PS5 Pro would cost almost US $1,000.
Margins will be squeezed, and consumers will have to buy less.
I saw the market dynamics — and some clients’ plans — shift immediately. Several product makers I work with who manufacture overseas are actively exploring options like:
- Moving final assembly to Mexico or Canada (where 25% tariffs are threatened, but may not happen)
- Splitting production between multiple countries
- Investigating U.S. manufacturing partners
- Stockpiling inventory ahead of changes
But here’s what makes me nervous: Plenty of product makers haven’t yet done the math on what these tariffs could mean. The Consumer Technology Association projects some electronics could jump 40-50% in price.
AutoZone’s CEO recently promised they’ll pass every penny of increased costs to consumers.
In I Need That, I talk about how economic fundamentals can sink even amazing products. I’ve seen it happen too many times.
When your cost basis suddenly spikes 60%, that’s not just a speed bump – it’s a freaking mountain!
Who are customers going to blame? Who will they boycott? Not the President.
And, honestly, maybe Trump has it right. Is this not what it will take to break our addiction to cheap products from overseas and buy products made closer to home?
Yes, it will hurt. It’s gonna suck. But go to Detroit and ask people what sucks even more.
Action for today: Get realistically cynical and map out your supply chain vulnerabilities. Where could tariffs hit you hardest? What’s your Plan B? How about your Plan C and D?
For some businesses, this means exploring:
- Domestic component sourcing
- Alternative manufacturing locations
- Product redesigns using local materials
- Price restructuring scenarios
The winners will be those who prepare now, not those who scramble later.
What steps are you taking to protect — or reinforce — YOUR product’s future?
Laurier
P.S. Speaking of manufacturing shifts – did you know brands including Apple have been slowly “reshoring” manufacturing to America, including a new factory in Mesa, Arizona that will run on 100% renewable energy. Sometimes the smart move is also the patriotic one.