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Scaling Fair Trade: 5 Lessons On How GlobeIn Grew to Over $1M in Sales

Scaling Fair Trade: 5 Lessons On How GlobeIn Grew to Over $1M in Sales

It started with a box. A social business startup dreamt of connecting artisans in developing countries to the global marketplace using a subscription model. This became GlobeIn’s Artisan Box. In one year, GlobeIn grew its business by sixteen times to over $1 million in annual revenue. Here are the lessons learnt along the way…

I recently started hearing from more and more amazing, driven women who want to work with artisans, farmers and other women entrepreneurs around the world. These are GlobeIn customers who have been inspired to make a difference in the world. I applaud you and am always happy to share GlobeIn’s experience so that your journey is an easy one (just kidding, this never happens). This post is for anyone passionate about creating a sustainable, positive impact in the world.

Here are the key five lessons we learnt, growing our business over the last three years.

1. Product first, mission second

GlobeIn started as an Etsy for the developing world. There was a consumer demand for artisan made crafts. But, all crafts are not created equal. When we launched the alpha version of the Artisan Box, we sent our customers a box with 3-5 products from a new country every month. But the idea didn’t take off. The problem was that these items were typical products you’d find in touristy areas in Ghana, Mexico or India. These were kitschy, souvenir-type items that weren’t useful.

Only when we changed our curation process, established higher quality standards and focused on practical products that an average American woman can fit into her lifestyle, did we see our subscriber base grow. A good example of this approach is TOMS. The company managed to grow its business to $625 million valuation not just through the heart-warming and ever-so-simple model of “One for One,” but also by making a product that clearly appealed to their audience in design, quality and price. Just to be clear here: I applaud Blake & Co. for their product design. The classic alpargata could have been discovered by chance, but it could NOT have been more perfect for millennials. It’s a clear product-market fit. It was not such a straightforward fit on the social impact side though, so much so that when researchers commissioned by TOMS itself (to the company’s credit!) came back with results they found that “handing out the free shoes had no effect on overall shoelessness, shoe ownership (older shoes were presumably thrown away), general health, foot health or self-esteem” (The Economist). So while Blake Mycoskie is still the “Chief Shoe Giver”, TOMS has altered its giving back strategy quite significantly. These learnings have been great for the company (and others) moving forward but putting the product first (and mission second) is key to success!

But don’t take my word for it. Here’s the piece of advice that stuck with me the most from this year’s Fair Trade Federation Conference from the CEO of Ben & Jerry’s!

“If you don’t design for the US market, don’t expect to own even a minuscule percentage of that market.”

– Ben Cohen

Liza Moiseeva, Co-founder of GlobeIn
Liza Moiseeva, Co-founder of GlobeIn

2. Serve your customers

I know, I know. Fair trade is all about helping artisans and farmers lift themselves out of poverty. It IS why I am here. It is why GlobeIn is here. But here’s a realisation I quickly came to: if you don’t give your customers what they want and keep them happy, you won’t be of much help to your artisans.

“Artisans are the reason we started the business, and customers are the reason we are in business.”

This goes back to the first point of “product first,” but goes beyond it. You have to listen to your customers, to learn from them (our monthly customer surveys are my favourite marketing and product-development tool), and to provide exceptional customer service! The fact that you are a social business or a nonprofit doesn’t mean that your customers will let your slow (or mean!) customer service slide.

At GlobeIn, our mission is two-fold: curate amazing artisan products at the best possible prices for our customers. By doing so, create sustainable, recurring revenue for our artisans.

3. Compete with and operate as traditional for-profit businesses

Since GlobeIn’s main product is the Artisan Box many of our customers subscribe to other monthly boxes. They compare their Artisan Box to other lifestyle subscriptions, like PopSugarMustHave or FabFitFun. I apologise if these names don’t mean anything to you, the fair trader, the change-maker, the conscious consumer. Because, well, they have nothing to do with conscious consumption. These are lifestyle boxes full of cheaply manufactured products, samples, etc.

It’s hard for GlobeIn to compete with the product budgets of these boxes. After all, we have to pay artisans fair wages when other companies can pay pennies for their products. But, we have to constantly keep finding a solution to this puzzle: provide the best value to the customer while paying fair wages to artisans. It sounds difficult (and it is), but when you realise that solving this puzzle defines whether or not you make it as a business, you just do it.

As you are competing with traditional for-profit businesses, make sure you learn from them. For example, my personal subscription to Le Tote taught me the ultimate importance of tissue paper! To my dismay, other subscription boxes come packaged in incredibly fun and cute boxes too. The only poor “unboxing” experience I had with a subscription box was one sold by a nonprofit organisation. That’s not a way to scale impact.

Look to the best in business (social or not), set ambitious growth goals (YCombinator requires the startups they invest in to grow at 7% per week), and constantly work on improving your product or service.

After all…

“Shoot for the moon. Even if you miss, you’ll land among the stars.”

– Norman Vincent Peale

Ethical goodies
Ethical goodies

4. Get a line of credit

A sound piece of advice we got from a venture capital firm specialising on consumer goods:

“Every single e-commerce company that we invest in…… the first thing they do when they raise any kind of equity, they get a line of credit.”

If you have worked with larger retailers, you know what I mean. If you are a newcomer, Google it.

A typical retail company starts planning its collections up to 9 months before it hits the store. That’s because they are ordering hundreds of thousands of products. If you are a boutique fair trade store ordering a few hundred of any given product, you probably don’t have to plan that far in advance.

However, if you are a social business that wants to scale, you will need to plan at least 6 months in advance, especially if you are dealing with handmade artisan goods. This is when you go and get a line of credit – a loan that will help you finance your product sourcing long before you receive these products and even longer before you make any profit.

Even the most cash-rich e-commerce company wouldn’t be able to finance their inventory with profits. As a social business or nonprofit, you can get this type of loan from an impact investing company that will be more understanding about your longer return horizons and more appreciative of the social impact you create. RSF Social Finance is a good example of an impact investor providing such financial tools.

5. 60-70% of your sales will happen between October 15th and December 15th: Plan your cash flows accordingly

Are you a fair trade company or a social business? Are there any mistakes you’ve made along the way? Do you have a piece of advice other change-makers can learn from? Please share in the comments below.

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Liza Moiseeva

Liza is the Co-founder and Director of Marketing at GlobeIn, a social enterprise connecting artisans with the global economy, and she formerly served on the Advisory Board of Color Me In!, a non-profit that gives small loans to entrepreneurs in Zambia. Liza holds a Summa Cum Laude B.A. in International Studies from Old Dominion University and an MBA in finance. She hopes to contribute her knowledge of business, finance and the non-profit field towards creating a social impact.

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