Do One-for-One Business Models Really Work?
We all want to make a difference in our world. The idea of helping others when we open a new business, or even as a consumer can be very gratifying. This can be especially true in the fashion and design industries that often have less than glamorous pasts with the manufacturing of clothes. My textile company, Offset Warehouse, is founded on sustainability and ethical practices – so I know all about wanting to do good.
But how about this new business model, the you buy one and we’ll give one model – also know as the “one for one” model. As principles go – it’s a great one! But does it actually work? Let’s explore the concept in more depth.
Let’s look at the most notable company currently involved with this practice, Toms shoes. The Toms shoe company will currently send a pair of shoes to a third world nation where shoes are a luxury that many cannot afford. Blake Mycoskie, owner of Toms shoes, started the practice with his company after seeing the obstacles of children who never have the money for shoes. After coming home from his travels, he implemented a ‘one for one’ model within his business, and has so far sent millions of shoes across dozens of underdeveloped countries. For every product sold, another is sent overseas to the needy.
“So what’s the problem?” some might ask. As it turns out, there are far more issues than you might realise.
I, like so many others, thought at first that what Toms shoes was working to accomplish was a beautiful idea. Those that need shoes, get shoes. There is, however, much more to this story. The old saying of “Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for life”, is in full force here.
The problem is not a simple one, as it is multifaceted in the local economies of each region. One major concern that has been growing among critics is the fact the ‘one to one’ does nothing to spur local markets forward, it stifles them. When goods are simply given in mass quantities from other parts of the world, it essentially kills the drive for local merchants to create their own products to sell. It has even been shown to put the few entrepreneurs in these regions out of business.
Another important aspect of this problem is the idea that whatever hand-me-downs the western world doesn’t want, the more impoverished parts of the world need. It is an arrogance that many of us living in the first world tend to not understand. Just because you have 10,000 extra pairs of pants after manufacturing your line, does not mean that individuals in Africa need, or welcome your influx of product. It makes us as consumers, and business people feel warm in our gooey places to think that we are doing a great service, when really there are better ways to help than sending over handouts.
We are simply a putting scotch tape over the cracks in a dam. The root causes of poverty are not being addressed, they are being pacified.
A Hand Up, Not A Hand Out
It goes without saying that charity is not a bad thing – that would be a ridiculous claim to make. However, I do stand by the idea that teaching a man to fish, is always better than giving a man one. Education is proven to be the number one way to boost economies and overall quality of life in any nation. This is especially true in third world nations, where access to education is very limited.
The good news is that those that want to make a difference can modify the ‘one for one’ business model, and improve it. For example, instead of simply sending your products overseas, try investing the money in educational purposes for entrepreneurs in these regions. If you sell t-shirts, then use any money raised to not just send your shirts, but send equipment for a family to start their own company. You can use those funds to change someone’s life not for a day, a month or a year, but for a lifetime. Not only providing a long term solution for that particular individual, but for the entire community they live in.
Knowledge and opportunity will provide much more in the fight for sustainability in underdeveloped countries, than a million donations of a single product.
We as a privileged society need to stop and think before we take a good intentioned idea, and run with it. Poverty is a deep rooted problem, and one that cannot be served by a simple gift, no matter the quantity. Much more research about the regions you wish to help, and an in depth understanding of what is needed most, or what is contributing most heavily to the problems. Never stop giving, and using the talents and knowledge you have to help those around the world. But let us teach ourselves that using those talents to lend a hand up, is worth far more than a hand out.
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