A New Fair-Trade Business Model

The small business blog over at Business Week introduces us to a great company called CraftNetwork which is turning the fair-trade model on its head. While most fair-trade retailers make social consciousness their major selling point, CraftNetwork has built its business on a more traditional model: large quantities of uniform products at competitive prices.

Chris Benz, the company’s founder, has coordinated over a thousand artisans to create an array of products to near exact specifications. The artisans are able to work in their homes or village workshops, and CraftNetwork is able to sell large quantities of product to major wholesale buyers, delivering profits back to the artisans themselves. Benz says, “I have a whole village employed, a whole village that’s bringing in $70,000 a month -– based on one order.” That one order is from Carnival Cruise Line, which has bought 50,000 books weaved of banana leaves.

Business Week, which knows a thing or two about market forces – has a very positive perspective about what CraftNetwork is doing:

The real innovative thing I think CraftNetwork is doing is trying to build a brand beyond just a fair-trade company that people patronize for feel-good reasons. He wants the operation to respond to trends and demands in the market and be competitive with non-fair-trade businesses. The idea is that you make fair-trade sustainable the same way you make any business sustainable: by winning in the marketplace. The social aspect may be added value for some buyers, but it isn’t driving the buying decision.

What makes CraftNetwork even better is the devotion with which it treats its member artisans – providing financial advice, computer literacy training, and business building techniques. The stories the company tells about its products and people are also nice. The wine glasses in the picture above, for example, are designed by Wayan Yasa, who, we learn, worked in a Japanese-owned glass company before starting his own business from the ground up – building a kiln himself with his meager savings and help from four other friends.

Craftnetwork

via Businessweek