Buy American

[drcollie]

>laughing< Oh no, I'm not going to moderate this thread! Everyone is welcome to put in their .02 worth and threads sometime take off in a different direction than the original poster intended. That's the nature of internet forums. The key to exploring topics is keeping a civil tone with one another, and the only time I will ever step in and shut down a thread is if it gets too personal (name-calling and the like). As long as that is maintained, then have fun....and discuss. There is always something to be learned from reading another viewpoint, even if its only bits and pieces of that opinion.

Aaron asks if there is a trade association, yes there is, and its called NHFA (National Home Furnishings Association) and I have been a member of it on and off for many years. Mostly all they do is offer a reduced credit card processing fee and their lobbyist arm fights against a national sales tax and that's about it. They're not going to push for tariffs or against Chinese furniture because most their members either partner with the Chinese production facilities or sell it in their stores. I'm way at the end of the bell curve with my USA-only approach and no doubt I miss a lot of sales in the less expensive category for my stubbornness to not have those products in my store. But I do so for a number of reasons:

1) Political: I don't believe the Chinese are our allies and supporting their economy makes them stronger. This may not affect my generation, but I bet it will my children's and in a negative manner.

2) Quality: It's not in the product. Plain and simple. Short usable life spans.

3) Serviceability: Try to get parts for something 100 % made in China in the furniture industry. You can't.

4) Customer Satisfaction: If I sell you junk, how likely are you to return? I keep most my customers a long time and it makes for a good, relaxed working environment when everyone is happy. There are stores that could care less if you return or not*, if they are able to get one high gross sale from a customer, that's all they care about and then they're find a new customer for the next one. Most that Chinese furniture is ridiculously cheap for the store to purchase, and they can put high mark-ups on it. American made pieces don't carry same percentage markup (lower margin sale) because as Jack says 'The customer will determine a widget is worth only so much'. That's true. So by selling better made product, the dealer has to make less profit, but you wind up with happier customers!

5) American Jobs: It absolutely makes a difference to our national welfare and economy. We make the best furniture in the world in this country. If it was junk it would be a different story, but its not. If we don't have Americans working, then how can they buy that house that's up for sale, or that new car? Its in all our best interests to keep the money at home and consumers are the ones that will make that decision. Business follows the demands of its customers.

I remember back in the early 90's when the Hooker Furniture Reps were in the store and so proud of the fact they were shutting down all USA production facilities and going to be the first USA furniture company to be 100% off-shore (Read: China) production. All they wanted to do was show me how much profit I could make if I carried their line. I could make 30% more on the widgets because the wholesale cost was so cheap. But unlike most furniture store owners who never leave their offices, I've made hundreds of trips to small furniture operations and know how hard these people work, and how much pride they have in what they make. Though I've never been to China, I seriously doubt that same work ethic is in place. I decided a long time ago I'd close the store and find another business to get into rather than be an outlet store for the Chinese, or the short-sighted, profit-oriented businesses that move their production out of country. So far, my business model continues to work for me. I'm still here, have weathered the Recession, and customers are finally figuring out that over the long run it cost them less to pay a little more on the front end by buying American made products.

At the end of the day, like in most things, you generally get what you pay for.

____________________

* A true anecdote:

Reny Barnes used to own a chain of stores in the Wash DC area, 5 retail outlets and a warehouse facility. The store name was C.L. Barnes (his father started it). They sold low to middle end goods and their flagship store was 2 miles from my store. One day he comes into my store and looks around for twenty minutes, introduces himself and give me his unsolicited opinion on my operation. "You have a nice store but your business model is all wrong" he says.

Bristling, I ask "How so?"

Reny continues with: "You have really nice product that you sell too cheaply. You're leaving money on the table with your pricing."

I reply; "I make enough to stay in business and pay my house mortgage, and save for the kid's college. Why raise my prices and take a chance on cutting my volume?"

Reny says: "What you need to do is bring in cheaper product and begin substituting it for your good lines, and keep the prices the same. You'll make more money that way."

Puzzled, I ask him: "If you do that, you run the risk of losing your reputation and losing customer loyalty, and if you charge a lot of money for poor furniture, the complaints will increase dramatically as well."

He told me: "Customer loyalty is not important. We have our businesses in Washington DC, its a highly transient region. All you have to do is get them once, and then move on to the next one. There's always a new customer base arriving."

Finally I get his drift: "I'm not interested in money at the expense of integrity, sorry".

And Reny left. His entire chain went bankrupt and closed in 2006. Even though they're gone, you can spend hours reading all the complaints filed by consumers about their operation on the 'net. So much for that theory.

[JackOlso]

Since we're on this topic, rather than let opinions get in the way of the facts here are the numbers.

Hooker Furniture for the 12 months ending in January had revenues of $203.3 million dollars. They earned a net income of $3.0 million. That’s an amazing 1.47% profit.

Ethan Allen for the 12 months ending in June had sales of $590.1 million with a loss of $44.3 million. That’s a loss of 7.5%.

Basset Furniture for the 12 months ending in May had revenues of $227.8 million dollars with a loss of $2.5 million. That’s a loss of 1.1%

Flexsteel for the 12 months ending in March had $315.4 million in revenues and $14.6 million in profit. That’s a whopping 4.6% in profit.

Stanley for the 12 months ending in April had revenues of $157.1 million and losses of $28.3 million. That’s a loss of 18.1%.

Furniture Brands International for the 12 months ending in June had revenues of $1,190 million with a net loss of $80.8 million. That’s a loss of 6.8%. (These guys own Broyhill, Drexel, Henredon, Hickory Chair, Lane, Thomasville, Pearson, and Maitland Smith)

All of those companies have moved a significant portion of their production to Asia. Some companies only moved a few lines to Asia and were smarter about it than other companies. I wonder what their losses would have been if they hadn't made those moves? If losses continue at Stanley and Ethan Allen, they may disappear. The jobs they have left in America will be gone also.

Are those losses and small profit margins due to making furniture in Asia, or is it because they can't sell enough to make money even with the lower cost production in foreign countries? I wonder how much they would have sold if their prices were 30% higher but the products were made in the USA?

Some of the lost production will return to America, but not more than 30% to 40%. Companies will continue to look for ways to improve the quality of imports, cut shipping costs and speed up the shipping process. They will do that, not out of greed, but out of desire to survive. It's better to keep some jobs in management, marketing, and distribution in the US, than it is to close the company and lose all the jobs.

I certainly agree that the quality on most of these brands have dropped. I no longer buy Ethan Allen. I've seen some issues with Thomasville in their showrooms where hardgoods have veneer problems, racking and warping. A lot of that is related to the temperature and humidity changes during manufacturing and shipping. I can also say that on some brands like Hooker, the quality wasn't all that great when it was made in the USA. (sorry Hooker)

I'm very careful in regard to what I buy. I make sure I know where it was manufactured, how good the service is and how easy it is to get things repaired before I buy anything. If you think the furniture business has moved production out of the country, take a look at the appliance business. That's another greedy, hugely profitable industry that no longer makes much here in the US. My Whirlpool washer was made in Germany and the dryer was made in Mexico.

[JackOlso]

Several companies still make most of their soft goods in the USA including Hancock and Moore. Some soft goods companies have covers made out of the country and put their pieces together here.

Henkel-Harris, Robert Bergelin and Wright Table make their hard goods in the US.

If you want to see what's going on in China, google The Furniture Industry of Sino-America. This is a 2004 report and things have changed some since then. More of China's furniture production capacity is being directed toward domestic consumption. Since the Chinese understand supply and demand, they are raising their prices. In addition, some suppliers have cut back production of materials so much the supply chain won't be able to keep up if demand rises.

So look for higher prices on good made in China without an increase in quality.

[drcollie]

The recession hit all the makers hard (and still is). Folks can put off a new sofa for a few more years, its a 'want', not a 'need'. And that's exactly what is happening. Discretionary spending really took it on the nose. A good friend of mine owns a jewelry shop and he really took a hit, but says business is coming back now. But a year ago, he couldn't make payroll for a time. And lets face it, the furniture market is crowded (hence the existence of forums, people asking about this piece vs that one). Lots of competition in the field, and no one has a truly unique product. If one of the makers develops a 'hot' item, all the others have it by next Market.

I think companies like Hancock & Moore, Bradington Young, and Flexsteel took the right approach. They kept their domestic operations, and fielded another line of 100 % Chinese Product to service the price point customers (Randall Allen, Seven Seas, and Latitudes). They made it separate and distanced it from their mainstream USA lines, so as to treat them as separate entities. Companies like Stickley have done it incorrectly. They have some of their product made in New York state, and some in Vietnam, and its all combined under the Stickley nameplate. I think its nuts to "place all your apples in one basket" and depend 100% of off-shore production. You're then hostage to a foreign country, the shipping lines, dockworkers and rail service. A hiccup in any one of those and you're screwed....

Plus, there is now a backlash against products made in China. Tainted milk, lead paint on toys, contaminated pet food, the list goes on and on. To be sure, not everyone objects to "Made in China" but their is more resistance than ever before.

Perhaps I worry about China too much. Any country that has to do this (today's Washington Post) has a culture in trouble....

China, land of fake Rolexes, now sees increasing interest in fake virgins

By Keith B. Richburg
Washington Post Staff Writer
Monday, August 16, 2010; 12:28 PM

BEIJING -- China has long been known as the land of cheap fakes -- Rolexes, DVDs, handbags and designer clothes.
Now add a new one to the list: fake virgins.
A growing number of young Chinese women -- mostly in their 20s and about to get married -- are opting for a surgical procedure called "hymen restoration," which repairs the hymen to its previous condition before it was ruptured, which most typically is done by first sexual contact but can also happen by playing sports or riding a bicycle.
Even as China has flung open its doors to the West and modernized, a deeply conservative, male-chauvinistic attitude persists. Many men, including white-collar professionals, still say they want their future wife to be a virgin. And increasingly liberated Chinese women have found a way to give men what they want.
"We can fix it so everything is perfect, so the men can believe they are marrying virgins," said Zhou Hong, a physician and director of gynecology at the Beijing Wuzhou Women's Hospital. "We don't advertise it, we don't publicize it."
Zhou, 44, said the majority of her patients are sexually active young women who are about to get married and have told their future husbands they are virgins. She said a smaller number want to forget a bad relationship and "start over," and a few have been victims of rape.
Zhou is one of many Chinese doctors performing the procedure, which is also done in other countries. She said she restores as many as 20 hymens monthly, and the number is increasing. Now for as little as 5,000 renminbi, or about $737, for a 20- to 30-minute procedure, Zhou is giving young women a second chance at having a first time.
Does she worry that she is helping young women begin their marriages with a lie? "It's just a white lie," Zhou said. Besides, she blames men for holding up these unrealistic expectations.
"I don't agree with this value" placed on virginity, Zhou said. "It's unfair to the women. The men are not virgins. But we can't change this male-privileged society."
The surgery, known in medical circles as a hymenoplasty, has been around for years, although it is considered very rare and is illegal in some countries. It is practiced primarily in Muslim countries, where the traditionalists place a high value on a woman's virginity. It also has become common in France among the French Muslim population, usually for young women about to enter into a traditional marriage. There are no statistics available in China on how often the surgery is performed. But sociologists and other experts, as well as anecdotal evidence, suggest it has gained in popularity, alongside plastic surgery.
For women who don't want to undergo a surgical procedure, a cheaper, faster path to "revirgination" is available in most sex novelty shops: a Chinese-made artificial hymen that, when inserted, purports to create a lifelike sensation for the man and emits fake blood when ruptured.
A 25-year-old woman from Guiyang bought several recently online, intending to resell them to the young women in her circle. Some of her friends, she said, were worried their boyfriends might leave them if they discovered they were not virgins.
"It's really worthless for couples to break up over this small issue," said the woman, who asked not to be quoted by name.
Some sociologists and others have criticized virginity obsession as emblematic of a male-dominated society in which women are still treated as sex objects. And they are equally critical of women embracing possibly risky or painful methods to conform.
"I think it is really stupid for women to do this kind of surgery and buying fake hymens," said Li Yinhe, a sociologist at the Chinese Academy of Social Sciences and the country's preeminent sexologist. "It's self-deception. "
The topic of virginity has recently popped up in newspaper columns and Internet debates. Several men posting online comments to a popular Web site blamed women for what they called modern women's materialism when seeking a mate.
"Women demand men have houses and cars, why can't men demand women be virgins?" asked one anonymous man on the Internet chat site Tianya. "So, greedy women, remember, you have to protect your hymens, because those are big dowries for you to exchange for money."
Some men interviewed agreed. "I really care about virginity," said Xia Yang, product manager for an IT company. "If you go to buy a cellphone, of course you'd want to buy a new cellphone. Who would spend the same amount of money to buy an old cellphone that's been used for two years?"
The virginity debate also underscores a contradiction in modern China: As it becomes more freewheeling, there remains a deeply conservative core rattled by the rapid pace of change.
"Since the reforms began 30 years ago, sexual relations in China are actually quite chaotic," said Chen Lan, a novelist and social commentator. "One-night stands, extramarital affairs, prostitution. . . . All this means Chinese women have more frequent sexual activity, and at a younger and younger age. And this makes men feel women's bodies are not as clean as before. In these circumstances, men care even more about a woman's virginity."
Zhou, the gynecologist, is unperturbed by the controversy surrounding the procedure she performs. She just wants to make young women happy. She said after their wedding night, many of her patients send her text messages saying it had been a success.
"That's the happiest thing for us," she said. "We keep it quiet. The men won't be happy. We have to keep the secret for the women."

[catlover]

Jack Olso...you hit the nail on the head! Great piece!! Ok, maybe not directly related to furniture but it's related nontheless! Great!!

I am not buying furniture from China....period!!

[karlos]

I agree with you Jack. I do not buy anything from china if i have a choice. I work for a huge airplane co in Seattle and see the same points you have made every day. the only savings for us and the unions is that there are only 2 players in the world now that build jets that the airlines use. outsourcing around the world for the new models has cost us dearly with quality issues Im sure you have heard . If China starts making jets and they are making small ones now. we are sunk if they can keep them in the sky and build the jumbos. . They will undercut the competition. I would never get on one. Buy American furniture and Fly Boeing...

[drcollie]

Karl,

My Father (now 88 with Dementia) flew Boeing B-17's in WW2 as an 18-year-old pilot and then later Boeing B-47's in the cold war era as squardon commander at Whiteman AFB, and finally the Boeing 727 with the FAA as Chief of Air Safety Standards and Operations. He said its the best aircraft maker in the world....there was nothing but Boeings around my house growing up!

[karlos]

Duane , bet you heard alot of good stories from the day, and it was all american built in those days... from the pilots i talk too ,Boeing is like the Bmw of the sky and just a fun airplane to fly. and Airbus is the one that always has lots of little things that are annoying to them. Check out William Phillipps art from greenwich gallery. lots of ww11 airplane canvases...That look great on my walls.

[Rowdymom81]

Born and raised in Lenoir, NC, I remember back in the day when you avoided going anywhere at 3pm because the traffic from furniture workers changing shifts was a bear. Family and friends worked at Broyhill, Stephens, or one of the many other plants around the area.

Since 2000, the area has lost 6, 000-7,000 jobs. Factories are shuttered all over the place. It's very sad to go back home now.

[catlover]

So as NAFTA was implented to raise the poverty level thruout the world...it did nothing but increase it here at home. So much for politicians looking out for the people!! How do we compete? I guess the best we can hope for is that these other economies will increase to the point that it becomes too expensive to do business there. Problem with that is time isn't on our side.