Giving local-people a honest cut may soon get a lot easier
Fair-trade, the concept of giving indigenous people and foreign workers a reasonable price for their goods and services is a hot new concept. In the past, America, Europe, and the rest of the industrialized world have taken advantage of the fact that in many third world countries labor and resources are cheap.
Unfortunately, by using these countries economically, cycles of poverty and conflict have been perpetuated to a large extent in prior decades. By giving the locals a cut closer to what they would get if they were in America, the local people benefit and, in theory, the world will be a more equitable and prosperous place.
Whether you share such opinions or not, these concepts are quickly catching on in the retail industry. Chains such as clothing provider American Apparel have built names on being "fair-trade". Now eBay, owners of the leading online auction site, are launching their own fair-trade-centric online store.
Robert Chatwani, eBay's general manager of the project, announced that WorldofGood.com will launch this summer and offer a variety of fair-trade goods. The site is being produced through a partnership with non-internet fair-trade company World of Good Inc., which the site draws its name from. EBay has already created a community site that allows users to interact and announced fair-trade products, and products made from recycled goods.
The new site will focus purely on the shopping experience and will cater to "social change consumers", according to Chatwani. He announced the new venture at the Dow Jones Environment Conference on Tuesday.
There's big money involved says Chatwani. He estimated the socially equitable/green product market to total over $45B USD worldwide annually. He feels that the site will draw a different kind of customer than eBay typically does. He states, "Those people aren't on eBay. We believe only between 7 and 12 percent of these social change consumers are eBay users now ... so this could be accretive to the business."
The idea for the site hatched while Chatwani travelled on business to India with other eBay employees. They met with local craftsmen and offered to sell their wares online for a fair price, substantially more than the pittance they would normally get. The idea worked; the products sold. Inspired eBay teamed with World of Good to explore larger-scale fair-trade ventures. World of Good is committed to reducing third-world poverty.
Chatwani points that eBay has had a long history of promoting social progress. He mentions that eBay has long been a low-carbon emission company. Also it has had a hand in many past charitable efforts, he states.
Among eBay's other charity-leaning sites are MicroPlace a finance site which allows entrepreneurs to invest funds in developing countries. EBay owns eBay Giving Works, an online sales site that lets shoppers and sellers donate a percentage of sales to charity. The site has raised $120M USD for charity to date.
The biggest effort with the new fair-trade site will be to deliver full transparency. Chatwani says the new site will provide detailed information on where the products came from, how they're produced, and what their environmental impact is. The key to the sites success will be providing a variety of products. Says Chatwani, "Our challenge is not so much about getting people to spend more. It's about introducing all forms of consumption."
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