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Helping locals sell in a global market
Submitted by fyl on Fri, 2004/03/05 - 08:24.
It is a fact that a very small percentage of what is paid for products in foreign markets ever gets back to the producer. One way to improve local living conditions would be to address this issue. Years ago a company called Pueblo to People did this by buying directly from the producer and selling in the US market. As I remember, about 45% of the money they took in ended up back in the hands of the producer.
In today's Internet-saavy world, it seems that a cooperative effort to market Nicaraguan products in the world market would be very helpful. I am basically talking about a web site that offers products from locals, takes the orders, deals with the money (that is, credit card processing) and offers a shipping facility. This organization would be owned by the producers.
If this makes sense, I would be interested in making it happen. That is, I have a lot of skills to help I would be willing to donate my time.
Updated comments
As this topic seems to be getting some activity, let me update what I know/could do. That is, if someone has real interest in an organization that could at least offer the advantages to the producer of a producer-owned cooperative, I would be willing to put in some expertice and/or effort.
I feel the biggest problem putting together something that works is having a Nicaraguan "on the ground" here to locate the products and get the system (that is, order/production/delivery to the "company") in place. Most other things are a one-time effort.
What things? Getting shipping in place will take a lot of homework but it can be done. That may require some creative cooperation with the government, for example, The web site does need to look nice but there are so many good places to start for retail that cost nothing (CubeCart is my favorite right now--I have been looking at what it can do for another project and it seems to offer the best international support) that you are mostly talking look--the geek part to deal with orders exists.
So, I see three parts here:
So, if you feel you can address #2 and tell he why/how, I will be happy to discuss #1.
fair trade project
There already is a pretty good working example of such a cooperative in Nicaragua. Vide http://www.esperanzaenaccion.org/. They have a Nica office in Managua, but producers are located in Madriz. There also is a not so good for Nicaraguan producers example of a worldwide organization (google Ten Thousand Villages - I forgot the exact link)of the type, because they sell only TWO Nicaraguan products (and at least one of them seems overpriced considering similar goods on the market and its intrinsic value - and it is bound to hurt sales). Esperanza is dealing with shipping obstacles, though they, too, have troubles with that.
I personally could help with #2 once I get there (which now looks like might be sometime around August), since I am both willing and able and awfully concerned with boredom ( and accompanying brain shrinking) of full time leisure life, but we might have a problem working together, since we seem to have right now (if I understood you correctly) quite different approaches as to a)what would make a desire impact and b) where the critical elements are. To me, for example an artisan cooperative would be merely a stepping stone, a playground if you like, may be also an elemantary school (if well run) in finding markets and finding how to succesfully satisfy these markets using the comparative advantages (real or perceived: perception sells) possessed ny Nica producers. I would hate to have them trapped in prehistoric craft only and not explore other products they can successfully export ( and on a larger scale). And, I am sorry but I completely - though respectfully disagree with your assessment that "the biggest problem is having a Nicaraguan "on the ground" here to locate the products and get the system (that is, order/production/delivery to the "company") in place. Most other things are a one-time effort." PRIMO - One Nicaraguan scouting and purchasing does not a spring make: the producers would be cut out from decision making and learning. (It is quite other thing, though to identify a small group of locals who have enough education end exposure to the world of business to be trained as cooperative managers - who EMPOWER the local producers, not become a middlemen layer). SECUNDO: other things are far from being a one-time effort. Please do not undervalue the marketing and selling part - especially international marketing and selling. If you do, you will fail: there is far more goods chasing buyers than there are buyers chasing goods. I am willing to discuss, though but may be all interested would check the esperanza first. There is also a pretty good working artisanal cooperative in Mexico using a web site and newsletters (started with help of Nabuur) - though I don't have the link saved. Can forward it to you when their new newsletter arrives.
the laguna formula
AS a kid i grew up in Laguna California during the time the sawdust and the laguna art shows were starting. After a trip around the coast Pacific Coast of Nicaragua i can't help but see that his formula is perfect for this place. I am letting something out here, but in laguna some people who had a less than desirable piece of property, near the coast in an area full of artists of all kinds. Anyway what they did was divided the property up into little pieces for show boothes at first there was no entry fees 1968-74 i think, and rented these little spaces to whom ever had some form of art to sell, the artist only not the dealers. It was great alot of these little enclaves poped up in laguna each touting their own specialty. AS time went on the artist made money, the town became popular and this was a yearly event for almost 10 milliom people each summer. Now i think the entrance fee is to browse or buy like $20 last year i heard second hand the last time i went was in 1985 i paid $12 to get in. I have no idea how much the artist paid but i guess it also went up considerably. The point; people come to laguna regularly every year to fill their art galleries all over the world with these local artists work. It's a multi million dollar business today mostly benefiting the artist but it brings a huge tourism industry and on and on. So yes i see the Nicaragua on land first step then branching out from there, how far it goes is up to you. My two cents.
Were we all there?
I remember going to Laguna Beach with my parents starting in the 1950s and can remember the changes in the whole area. I also lived nearby (Corona del Mar) in 1968-69.
Here is the difference I see. Everyone in California had a car. And lots had too much money. So, I think there is an idea here but you may need to figure out the transport issue to get things rolling. That could be as simple as just working with someone with a bus to do special runs with space for the things people buy.
The depressing side, of course, is that the days of sawdust and free are gone.
Cars?
Let me tell you about the cars no loss here, the reason we moved out of laguna was we lived on canyon acres dr. Ya one block away, in the 70's if we left home our front yard turned into a parking lot we actually had to fence and lock our yard but then the drive way would be blocked, When we needed money $5 a car one acre was parked fully solid before 7am every day we did this, then the fights and the lines. Town was 1.5 miles away you couldn't get to the store and back in less than 5 hrs unless you walked. Wasn't perfect and yes it's no longer free god i miss them days!!! Ya anyone who might like to pool resources and ideas to repeat this formula i'm game but i got dibs on JUMBO JIMBO hamberger stand.
Ding Ding Ding
You've got a winner! I spent my formative years being dragged to the Laguna scene and, when my father died, gave/away donated a ton of things I remember my parents buying there in the mid-70s.
Last time I went was '94 or '95 -- entrance was $15 and I think we spent about $200 on nick-nacks and $60 on food/wine. It is a great scene tho huge now, eh?
I think you've hit on a real solid idea for Nicaragua. Let me know when you're in town and we'll work on this some over a cold one or twelve...
Selling local made products through Internet
I applied for a grant in December for an internet based craft store in Granada. Although I didn't get the grant, the research enabled me to discover many opportunities to assist the local people in Nica sell their crafts globally. For example, in Esteli there is a USAID-funded project being implemented jointly by the Nicaraguan Association of Producers and Exporters of Non-traditional Products (APENN),CARE and Chemonics. USAID provides $270,000 for a light industry and decorative accessories project for technical assistance in design, quality, and marketing. About 100 artisans,which include potters, paper-makers, and stone carvers are currently participating in the program. Another program which was funded by a grant is PROART, a Nicaraguan handicrafts marketing company, which works with about 100 microentrepreneurs, ranging from very low-income artisians in isolated communities to more sophisticated small business owners who sell to several buyers. Although these businesses received their start-up funds from grants, keeping their businesses viable and profitable for the local people they employ has been a challenge. These businesses have been required to innovate frequently in design and keep up with market trends, find producers who have the skills to make or adapt products as well as produce large quantities of goods while maintaining strict quality control. In order to remain competitive and sustainable, all the immediate profits can't be given to the local producers. It has to be balanced and reinvested in the business. Eventually the grant money runs out, there are no more investers, and these businesses are left to flourish or flounder. I plan on doing more research on Ometepe for such an enterprise, while still investigating the many pitfalls. I know the potential is there. It just takes time to do all of the necessary background work before submitting to a plan. I'm also going to try establishing a business without the ties and restrictions that most grants require. It gives me more room to think outside of the box,flex my wings, and fly.
Alternative approaches
I see so many things where a lot of work goes into a grant or venture capital. Research tends to be what the VC wants, not what actually fits the business, and a lot of up-front spending happens which forms a money addiction. The result is generally failure.
I see a zero-cost web site (what little that needs to be done is easy to get voluntarily, someone in the community will all ready have the necessary office space (which will be minimal) and the products belong to the producers. Thus, the company idea I suggest is really just a producer-owned co-op. Assuming you need to buy a computer with a printer and a FAX machine, you are talking about #1000. Chances are, however, you could share those for a while.
You could invest a lot of marketing $ but I think you would be much better off doing guerilla marketing. In any case, I would be really hard pressed to see how you could ever spend more than a few thousand $ on getting it running, you have no inventory costs and you have income before you have to spend your first shipping dollar.
Update
Fyl,
Any updates on the above planned website? I am thinking of doing something similar.
Regards :)
Go for it
Every time my wife says she needs a job I suggest it. But, it isn't happening. So, go for it.
Any progress with producer owned coop?
I just read you last year's posting on the procucr-owned coop idea you have and I think it's great. I wondering if you made any progress there? As for me, I wrote you a couple times about the export of natural products in Nicaragua. You should check out the company Rain-tree.com. They have done something similar to what you are talking about but have gone the extra mile. They train local collectors in the amazon to harvest products sustainably out of the forests. They pay harvesters competitive prices and then market the product as their own line of herbs directly to american consumers. Do you see any potential for this kind of natural product export for Nicaragua?
-Erik
A little progress
I have been talking to Ana about this idea. It is possible that Ana and Mary Luz may take a stab at it.
There are pluses and minuses with the idea that it is a producer coop. It may make more sense to not be a coop in the traditional sense but only work with local producers.
For me, at long as all (paid) work is done by Nicaraguans, I am happy. If they decide to give it a try, I will loan them the money to get it started.
One consideration is to decide what products make sense. For example, I saw another web site selling "shopping bags" from Mexico. These were flour sacks with handles sewn on. Well, people use them here but they are just so "ordinary" I doubt they would consider them a product.
I would help
I would help build and post to the web site for Granada and the surrounding area...I but I would skeptical about direct to cosumer web sites with the current shipping costs(which are only going to go up) I would suggest something like Alibaba.com or other B2B site.. where shipping is for larger quantities... A freind of mine has a specialty store on Ebay and does very well for himself... but the bggest problem is always shipping... He now lives in HK and ships larger quantities to a fulfilment center in the US... He does have the same problems with shipping to europe, though, but the costs are much higher but I think people are more used to it.... In Nicaragua I would think that the predominant marke will still be N.A. and maybe a few South american countries.
Income for Nica...costs of shipping
Hi Granada Sherif ! You are too darn bright ! All that in between stuff is just mind boggling. Cost vs profit at the retail end was my biggest problem (owned a neat store for a few years...and imported unusual items were BIG ). Well...one of my suppliers was a "family" man from India. He had the items..his family in India did all the procuring,some actual manufacturing. He told me all did well on a basically small family operation. Two person in US...and a whole big family in India.Another supported a large number of people o in Nepal doing he same (although he was US born, he spent years and 1/2 of his life basically Nepalese). Maybe you could teach people in Nicaragua/Granada specifically as you have all the skills and knowledge ("local guru") how to do this !! Seriously....I was awed by their business success. Will be returning to Granada and my little isleta in March with 3 friends along to help. Two have owned retail, excellent business sense and taste. Also interested in looking at "the better life". All it took was my tranquility when I returned to get people enthused. It is amazing ! So...be around and answer your phone this time. Party for my coronation...OK ? I have to have a friend from Libya present to make all a truly international event ! OK...you're all invited !!! So be it.. I am soooooo happy. Although a bit overwhelmed with this entire thing. Will have to come back here...but...well..that's what must be. I may be Queen Willow of Isleta Blanco...but wow..is there ever alot of loose ends. First trip..everyone carries two suitcases of my "stuff" including enough health care supplies to be available for on-call duties . You can't hide being a nurse..ever... Heh Heh.... See Y'All ! Willow
promoting fair trade
Oh, Willow, it was really funny... and yes, it can work on a small scale. Scouting the trade shows that cater to gift stores you can see a lot of representatives from the low-cost labor countries doing the selling of "unique" items (because in uniqueness lies both the advantage and the disadvantage of such endeavors). Not many, however, are really engaged in fair trade (sorry, that's the ngo buzzword for promoting higher pay /living wages/ for those who make things - and provide services. Greed usually takes over - if the things start going well and the "family man" will enrich mostly himself (and his family, if he is so inclined), but soon forget about those who produce the goods he sells.
Thus organizing and managing producer cooperatives, that have an ability to produce in bulk,and to deliver consistently over time, space and quality, is usually a much better approach, even if they are - at first - limited to "artsy and craftsy" products (a common trap, but I won't elaborate here why). Of course it requires a skilled management and the impoverished and uneducated had never had a chance to either learn it or to purchase it. Thus ngo capacity building among the indigenous population is a step in the right direction, together with initial outlays on management and marketing specialists who could negotiate with large purchasers in the developed world (in the "artsy craftsy" market that would be your Pier One, Cost Plus World Market etc. etc.) A catchy web site is often a necessary - or at least welcomed - addition, but by no means a cornerstone of economic success of a fair trade enterprise on any scale other than totally (or almost totally) insignificant to the producers.