Did you know that most Fair Trade companies return less than 20% of the sales proceeds back to the artisans that made the product? On top of it all, the artisans making these “fair trade products” have to pay for their own materials and all overhead expenses associated with making their products, out of these same minimal proceeds.
In a fair trade store the cost of shipping, storage, rent, utilities, and workers salaries all are taken out of the profit made from selling these ”’air trade products.” Most Fair Trade stores are also for profit companies that make profit off of the sale of Fair Trade items.
For example, If a coffee is to be labeled as Fair Trade the beans must be bought for at least $1.26 per pound. The average price of coffee beans is about $.90 a pound. This same coffee is sold for approximately $12-$16 per pound. If this same coffee was not Fair trade certified the beans would be selling for $5-$8 per pound at best. So the Fair Trade farmers are paid $.36 a pound more and the coffee is sold for atleast $7 per pound more. Where is all this extra money going?
Although Fair Trade is much better than the alternative “sweat shop” imported products, we at Africa Bags believe there is a better way. Why not make the artisans the share holders of the company? Why not pay them the profits instead of paying them a salary?
Keeping our overhead costs low and returning as much money as possible back to Malawi remains our top priority. Althought we still have some over head we have to cover, we keep this at a minimum. At Africa Bags we do all the preparation to sell the bags on our own, working out of our house. We print our own bag tags and information cards, silk screen the logos on the bags, and sell the bags out of our home. We also recruit other volunteers that want to help by donating their time. All of our personal travel expenses to Malawi are paid for out of our own pocket.
Here at Africa Bags we sell items such as Africa Bags T-shirts, hats, etc. to help cover overhead costs such as card stock, ink, and booth fees to sell bags at local events, and wiring fees. When you buy an Africa Bag you can be assured that we get as much profit back to our villages as possible. Fair Trade organizations cannot even begin to compete with the Africa Bags project. In 2009 we sold over $55,000 in bags. Here was our cost breakdown in percentages:
- Profits returned to villages 56%
- Materials for bags 29%
- Shipping bags to America 7%
- Transporting materials/bags in Malawi 5%
- Tags, Card stock, ink, Silk Screen Supplies 2%
- Bank wiring fees 1%
- Booth fees to sell bags 1%
Todd recently sat on the board of directors for a local fair trade store that is part of a well known national fair trade cooperation. Almost all of the major decisions were made at a cooperate level. Todd felt like most of the decisions were made for the bottom line and not for the artisans making the products. In 2009 Africa Bags was able to send more money back to Malawi than this fair trade store was able to return to its artisans. This store had full and part time employees and dozens of volunteers that worked regular shifts in the store. Their gross receipts are over $300,000. Todd feels that his time could be better spent focusing on Africa Bags and has resigned from the board.