Business Owner Cathy Berse-Hurley Fights To Keep 'Made In The USA' Label

Cathy Berse-Hurley entrepreneur business

By Liza Porteus Viana

When Cathy Berse-Hurley started making her 4-year-old twin boys' handmade backpacks for school in 1996, other kids and parents took interest. She soon also began making lunch boxes, and selling her popular animal-themed wares at street and craft fairs, as well as big events like the New York International Gift Fair and New York Toy Fair. Her business took off and, in January 2002, she took the business wholesale, selling her bags in specialty retail stores, kids' stores, boutiques, museum stores, as well as large department stores like Macy's, Nieman Marcus, Saks and Nordstrom.

Berse-Hurley said that she then picked up international distributors from Europe and Japan at the large toy and gift shows.

"I pretty much was doing international business. It was kind of cool. I found that they appealed to Asian culture really well," said Berse-Hurley, the founder and designer of CBHstudio in Massachusetts. "It wasn't an issue of trying to get people to buy my bags -- everybody loved them."

But despite all the success, this creative entrepreneur began to hit financial snags -- snags that stemmed from competitors using cheaper, foreign labor.

"I was getting bigger and bigger, but I still loved doing it [business] in the U.S. and keeping manufacturing here," Berse-Hurley said. But going global meant profit-slashing, because of high shipping, customs and other costs.

"The more I grew, the less money I was making and being able to have a margin in the wholesale end of things became impossible," she said.

The problem was, whereas Berse-Hurley was self-financed, designing all of her own bags and having them made by American workers in a U.S. factory, she said all of her competitors were having their similar products made overseas with cheap labor.

"My wholesale cost was only a few dollars off of their [competitors'] retail because they're making their product for a third the cost," Berse-Hurley. "It's not necessarily the materials that are cheaper in China, it's the labor cost.... My labor costs in the U.S. are still going to be constant, whether I make five bags or 50 bags or 5,0000 bags."

"That's the battle I've been trying to win for 15 years."

More: Starting A Business With An 8-Year-Old? This Mom Did It

'I Do Not Want to Go to China'

Berse-Hurley tried several different business strategies to grow her profit margin while still keeping business here at home. For example, she found a company in Pennsylvania that would cut, screen-print, stitch and otherwise assemble the bags all in-house, cutting the costs of having multiple companies do the same jobs by about one-third -- but that was still three times more than what it would have cost her to do the same job overseas. But nothing brought her into the black.

"One day I [thought], 'You know, this is not working and I'm frustrated by it. I do not want to go to China.' I just didn't want to be another brand that was importing stuff from China," Berse-Hurley said. "I didn't feel good playing that game, I just couldn't do it."

Since the centerpiece of CBHstudio's business plan was to keep its operation all-American, Berse-Herley said that she realized she had to do something drastic. So in January 2012 she started selling her bags directly to consumers online. This way, she can keep designing her own bags (she couldn't keep up with all the wholesale orders and still design the bags herself), keep the boutique-feel of her business, continue her operations in the U.S. and, oddly enough, says that she is making more of a profit than when her bags could be found in major department stores around the globe.

"I keep getting calls from stores asking 'please, please sell it to me,'" Berse-Hurley says. But "I just felt like I couldn't go on the way I was going on. I'm guilty of it, too, but we've become spoiled by inexpensive goods from overseas. Even though people want to buy 'Made in the USA,' when they're faced with the kid's backpack they might grow out of or they might want a new one next year, you can only charge so much. So I try to keep my prices somewhat competitive with my competition."

In addition to designing her own bags, Berse-Hurley also has about eight to 10 graphic design clients to supplement her income stream; she offers to them the product development and merchandising services that she has acquired through her own business. She also may license her designs for stationary, giftware or other items.

Berse-Hurley says lawmakers need to keep even the smallest of America's businesses in mind when they develop policy -- and America needs to back off its dependence on the cheapest goods.

"I always felt there should be something done to level the playing field" with foreign labor competitors, Berse-Hurley said. "But then, the U.S. public is so used to low prices, I'm not sure that would fly. I'm not sure what could be done, but I think as the public becomes more aware of companies that are trying to make in the U.S. -- there are people out there trying to support that....

"And there are blogs and websites and Facebook pages that list businesses like mine -- that's really helpful."

Men's Brands Tout Made in the U.S.A.

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That's a true American woman. May your business boom.

October 26 2012 at 8:47 PM Report abuse +3 rate up rate down Reply

Maybe this is a good sign that there is hope for the Sole Proprietor's, and small business operators success in the USA.

October 26 2012 at 7:12 PM Report abuse +3 rate up rate down Reply
Frank S. Pedigo

Maybe Ann Romney should get the message . She was part of the investment group that bought Delphi Auto parts and moved it to China in 2009 . They closed 28 US factories and laidoff over 25,000 American workers . Think about this when you vote . Obama has tried to get congress to pass a bill cutting taxes for companies who move to the US but Repubicans keep blocking it .

October 26 2012 at 7:01 PM Report abuse +2 rate up rate down Reply
1 reply to Frank S. Pedigo's comment

It's a shame that you cant make your letters bigger so they cover the page. people are shopping at cheaper places because they have less money. Big Business(Walmart, Delphi,GE) knows this and once small businesses are gone they will raise prices as a monopoly has always done..

October 26 2012 at 8:24 PM Report abuse -1 rate up rate down Reply
MR weaver king

thank you

October 26 2012 at 6:43 PM Report abuse rate up rate down Reply

Finally someone who has sense and keeps made in USA not in China as an absolute.

October 26 2012 at 5:36 PM Report abuse +5 rate up rate down Reply

There needs to be major tax benefits for companies that make things in America and severe tax penalties for companies that use over seas labor. That would help level the playing field.

October 26 2012 at 5:04 PM Report abuse +5 rate up rate down Reply
1 reply to Zab's comment
jay love

Zab: possibly a tax benefit for small companies trying to gain a foothold and keep manufacturing in the USA would be a good thing, but I am not sure were in a position to, or that it would be helpful to attack businesss's, large, or small by raising taxes on them and punishing American business that are employing hard working Americans? with unemployment as terrible as it now is the last thing we need to do is push companies out of business, laying off people, or driving them further to China, or other third world places to stay profitable?? trade policies between us and cheaper countries is a better way to go, which is what Romney has been saying in the debates??

October 26 2012 at 5:19 PM Report abuse rate up rate down Reply

Way to go!!!! My hat is off to you. Thank you for being a true American and for supporting America!!!!

October 26 2012 at 4:15 PM Report abuse +3 rate up rate down Reply

its too bad that more US business owners dont have the integrity and pride that this woman has. Ms Hurley I salute you and you really do live the phrase "Proud to be an American"

October 26 2012 at 3:32 PM Report abuse +3 rate up rate down Reply

I think you are a great person for wanting to keep your business in the U.S.A. I think you should look for some people in your area that would be willing to work for less i.e. retired people, people that have lost their jobs. as making SOME money is better than making no money!! That way you could keep your costs down and remain in the good ole USofA. And my hat's off to you!!

October 26 2012 at 3:10 PM Report abuse +1 rate up rate down Reply
1 reply to MAZATLANLB's comment
jay love

thats a good idea, however the Democrats would likely put the stops on anything like that saying the Unions should have that work, or sayig those old retired people should have to make the same amount as anyone else, or its illegal to hire them?? there are people who feel these commonsense solutions such as you suggest must be banned, or outlawed because its not fair, or right? I say like you, if there are willing, able people in the community who can only earn so much, (being on social security) or who are unemployed and have no hope of finding a job, they should be allowed to work for a small USA based manufacturer such as this lady and earn some money, earn some skills, and earn some self respect??

October 26 2012 at 5:25 PM Report abuse rate up rate down Reply
C S Buck

Just wish more manufacturers would follow her example.

October 26 2012 at 2:54 PM Report abuse +1 rate up rate down Reply
1 reply to C S Buck's comment
jay love

we all wish more would follow her example, however with the US trade policies we now have its almost impossible as she says, for a company to be profitable, (and keep employees on the payroll) unless they offshoar their manufacturing to countries like China, Vietnam, Loas, Cambodia, we need smarter trade policies and smarter tax policies to make and keep our USA companies strong, competitive, profitable and the people whom work for them strong and profitable? I don't see the Obama admin. doing anything like this these last four years?

October 26 2012 at 5:30 PM Report abuse rate up rate down Reply

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