Monday, May 5, 2008

Made in the USA Claim

by Debbie May, President of Wholesale Supplies Plus (

(Homemade Bath Products Blogger Note: If you are making your own bath and body products or soaps and selling them, this is good information that Debbie has provided.)

Given the recent downturn in the US Economy and the lowering value of the US dollar, I have started to really think about the claim "Made in the USA".As it turns out, the claim "Made in the USA" is regulated by the Federal Trade Commission (FTC).The FTC puts great significance on public perception and states that the following will be evaluated by the commission for the enforcement of the Made in the USA claim:

1. Site of Final Assembly or Processing.
The consumer perception evidence available to the Commission indicates that the country in which a product is put together or completed is highly significant to consumers in evaluating where the product is "made." Thus, regardless of the extent of a product's other U.S. parts or processing, in order to be considered all or virtually all made in the United States, it is a prerequisite that the product have been last "substantially transformed" in the United States.

2. Proportioning of Manufacturing Costs
Assuming the product is put together or otherwise completed in the United States, the Commission will also examine the percentage of the total cost of manufacturing the product that is attributable to U.S. costs (i.e., U.S. parts and processing) and to foreign costs. Where the percentage of foreign content is very low, it is more likely that the Commission will consider the product all or virtually all made in the United States.

There is not a fixed point for all products at which they suddenly become "all or virtually all" made in the United States. Rather, the Commission will conduct this inquiry on a case-by-case basis, balancing the proportion of U.S. manufacturing costs along with the other factors discussed herein, and taking into account the nature of the product and consumers' expectations in determining whether an enforcement action is warranted.

3. Remoteness of Foreign Content
In evaluating whether any foreign content is significant enough to prevent a product from being considered all or virtually all made in the United States, the Commission will look not only to the percentage of the cost of the product that the foreign content represents, but will also consider how far removed from the finished product the foreign content is.

For example, in the context of a complex product, such as a computer, it is likely to be insignificant that imported steel is used in making one part of a single component (e.g., the frame of the floppy drive). This is because the steel in such a case is likely to constitute a very small portion of the total cost of the computer, and because consumers purchasing a computer are likely, if they are concerned about the origin of the product, to be concerned with the origin of the more immediate inputs (floppy drive, hard drive, CPU, keyboard, etc.) and perhaps the parts that, in turn, make up those inputs.

The full FTC's Enforcement Policy is quite long and I highly encourage you to read it before making your own claim of Made in the USA.

As many of you are aware, we are getting ready to launch our new (Wholesales Supplies Plus) website. Given these guidelines, we will be adding the Country of Origin to all of our products. This will allow you to more accurately label your own products.


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