9 Appendices
9.1 Overview of selected e-commerce craft sites
As part of this research project, interviews were conducted with a number of e-commerce businesses and organisations selling craft goods. This overview of selected sites concludes with a summary of lessons learned in the last two years (section 9.1.9).
9.1.1
Viatru
(USA)
In 1999 Derek and Michelle Long founded the US
e-commerce site www.world2market.com
‘to promote the products and talents of artisans around the world’.
A limited range of craft products was sourced indirectly via US fair trade
importers, and directly from selected producer groups, with stock
warehoused in Seattle. Although they secured significant media coverage, and
generated a growing number of hits to their e-commerce site, sales were
insufficient to support a self-sustaining business. Moreover they faced
stiff competition from other new US craft e-commerce stores, notably Eziba
(www.eziba.com, section 9.1.5) and Novica (www.novica.com,
section 9.1.4 below), who had attracted significant funding (Eziba, for
example, received a capital injection from Amazon and others of $40
million).
World2market’s backers recognised that the company was unlikely to reach sales targets, and requested the founders and their team to find a new business model. The result, in 2000, was ViaTru: a digital media services company set up to advise retailers, companies and other organisations on how to incorporate principles of fair trade, environmental sustainability and transparency into their business activities.
‘Viatru was founded to provided specialised retail services supporting sustainable products. It is our philosophy that transparent access to information should be available to anyone, anywhere. Consumers deserve to know where products are made, by who, and under what condition.’
(Viatru
information sheet Everyone, everywhere
shares the dream of a better life).
Viatru has been involved in a number of activities to promote its aims:
· starting the ‘Visible Commerce Forum’: the first stage of a portal to share information to help craft producers export fairly traded craft goods to the USA. Other organisations who provided information and data included: Body Shop International; Oxfam International; the US designer Docey Lewis; and the US ATO SERRV. The aim was to develop the forum into an interactive exchange for producers, with constantly updated market information (such as design, colour and seasonal trends).
· ‘Digital story-telling’: developing demonstration on-line multimedia presentations to communicate the stories of products and producers to end consumers. ‘By creating web-based, digital windows into the communities where the product came from, consumers are able to see the journey of the product, and the people that stand behind it, giving consumers their first ‘digital window’ in the products’ source.’ Such presentations could be made on a web-site, cd-rom or shown on a point-of-sale multimedia kiosk.
· continuing to develop relationships with craft producers, local ngos and other organisations to act as a ‘broker’ to US retailers, helping them identify sources of sustainable products (such as coffee, timber or handicrafts)
Although Viatru was in discussion with the major coffee-chain Starbucks, and had worked with the Museum of Fine Arts, Boston, to help them source linen from India (woven using a 17th century design in the museum’s collection) the company could not find sufficient clients, and was unable to secure funding to continue operations. Viatru ceased operations in April 2001, with its web site and office operations ceasing immediately.
Founders Derek and Michelle Long hoped to develop a non-profit organisation, the Sustainable Enterprise Portal, to continue promoting fair and transparent trade, environmental sustainability, and corporate citizenship.
As at April 2002, they and some other former staff members of Viatru had had set up the Seattle-based non-profit Transparency Centre (www.transparencycenter.org).
Some of the information resources from the former Viatru site are included on the accompanying cd: see section 9.9.3.
9.1.2
PEOPLink
(USA)
PEOPLink
(www.peoplink.org) has been
instumental in training many IFAT producer groups in digital media skills,
and gave a series of workshops and presentations at the IFAT conference in
Tanzania in June 2001. IFAT and their members have been highly appreciative
of their work, which has helped many groups to create digital catalogues of
samples, set up their first web pages (often published on the PEOPLink
site), and use digital photography to enhance the process of product
development (see section 8.3).
PEOPLink
was established as a non-profit organisation in 1996, founded by Daniel
Salcedo. Dan Salcedo had experience helping artisans in Central America market
their products, and was Peace Corp Country Director for the Dominican Republic.
PEOPLink was established with support from the World Bank, USAID and others. It
continues to receive support from international donors and company foundations,
such as the Skoll Community Fund (set up by Ebay founder Jeff Skoll).[1]
Their
web site features details on many hundreds of products, with images and
descriptions, from over 100 artisan groups from 30 countries. Products can be
ordered over the Internet, paid for by credit card. The site also links to the
homepages of many producer groups: though these are not always well-maintained.
Sales
of craft products from the PEOPLink web site have been generally disappointing:
no craft producer we spoke to had sold products from the site. The site itself
has not changed markedly during the course of this research (April 2000-March
2002).
However
PEOPLink has developed a new second-generation e-commerce site for artisans,
CatGen, at www.catgen.org. This is a sophisticated ‘catalogue
generator’, developed as an XML-enabled open source application for use by
craft producers and other businesses to promote their products. The software
can be downloaded free of charge, and can be used to create a searchable
catalogue of samples which can be posted to the CatGen site, or indeed to the
producer’s own web site. On the CatGen site, catalogues can be searched by
keyword, country and region, displaying results as small jpeg images with
product specifications. (In March 2002 the site was under development, with
demonstration product catalogues only.)[2]
In
response to feedback from users, refinements have been added, such as the
facility to password-protect pages, enabling them to be viewed only by selected
contacts (eg known wholesale and retail buyers).
CatGen
software version 2 was introduced in December 2001, and is described to be in
use by 40 artisan groups to promote 3,000 craft products. According to the site
CatGen is expecting to add e-commerce facilities, such as shopping cart and
credit/debit card processing by the end of March 2002; as well as consolidation
of orders to save on shipping costs.
Although
it remains to be seen if CatGen will be any more successful than the PEOPLink site
in terms of promoting and selling craft goods on-line, there is no doubt that
PEOPLink have been instrumental in helping many craft groups discover the
Internet and to promote their goods on-line. Their free catalogue-generating
software catgen, and accompanying regional training, has also helped many
groups organise and catalogue their products more efficiently than previously:
enhancing the service they can provide to existing buyers and contacts.
Extracts
of an interview with Surendra Shahi, formerly with Mahaguthi
Handicrafts, Nepal, responsible for PEOPLink’s Trading Partner Liaison, is
included in section 9.9.3.
9.1.3
OneNest
(USA)
OneNest,
founded in Spring 2000, is an on-line market place, bringing together craft
producers and retail and wholesale buyers. Sellers include importers and
exporters, and artisan groups; buyers include boutiques, department stores,
‘etailers’ and catalogue companies. OneNest
therefore focuses on the b2b market (business to business): and requires
buyers to register before they can access the searchable marketplace. The
main content is not accessible by individual consumers.
The
site lists details of thousands of craft products from 30 countries, with information
and functions oriented towards the professional buyer. Thus alongside standard
product details is included delivery times, minimum order quantities, and some
background information about the products and producer groups (some of which
are identified as being fair trade organisations). Sellers can amend their
on-line catalogues remotely, and the facilities allow sellers to offer
discounts, if, for example, they wish to clear overstock items.
Buyers
have the option of ordering individual samples, with requests being forwarded
automatically to sellers.
OneNest
acknowledges that most professional buyers are conservative in their attitude
to new technology. Thus OneNest has increasingly made use of conventional
off-line marketing to promote products, such as advertising in the trade press,
print catalogues, and attending trade shows. They have plans to open a (real)
showroom in New York to display products.
OneNest
charges sellers a sliding scale of fees, dependent on the level of services
provided. In March 2001 these varied from $750 pa (to include a basic catalogue
of 15 items, handicraft trade directory listing, and company profile page) to
$2,500 pa and upwards (additional services including print advertising and
promotion at trade fairs).
Although
OneNest would not disclose actual levels of sales, they indicated that their
site had been commercially successful for producers, depending on the producer,
and the type and cost of products. OneNest estimated that the minimal catalogue
entry ($750 pa) generated sales of between $5,000 to $7,500; and that producers
buying the print and trade show promotions ($2,500 pa) were generating sales in
excess of $20,000 pa.
However
the Bangladeshi supplier of handicrafts BRAC Aarong, whose products have feature
in the OneNest catalogue from the beginning, reported in May 2001 and January
2002 that they had not sold any products through the site.[3]
The
following documents are included in the cd which accompanies this report:
·
OneNest
business overview
(March 2001)
·
OneNest
pricing plan
(March 2001)
9.1.4
Novica
(USA)
Novica (www.novica.com)
is a commercial b2c (business to consumer) e-commerce site offering over 8,000
hand-crafted products from 1700 artisans from around the world. Based in
Los Angeles, they launched in May 1999, and employ 200 people in 12 offices
around the world. A
number of factors make the Novica site distinctive:
·
Although
Novica is not a fair trade operation, it does promise to pay artisans ‘more
than local market prices’. Artists are free to set their own prices, and
they keep about 70 per cent of the selling price. Artists are not charged to
advertise their products on the site: but products are vetted by local offices
to maintain high standards of quality.
·
Products
are shipped direct from the country of origin to the individual consumer by
international courier (eg UPS, DHL, FedEx), to the USA and globally (generally
taking 2-3 weeks, and typically costing $10-20). This is via a network of
Novica offices who liaise with producers, take product photos, write up
producer stories, and consolidate items for shipping. Offices have been opened
in 11 countries: El Salvador,
Brazil, Ghana, India, Indonesia, Mexico, Morocco, Peru, Thailand, Venezuela and
Zimbabwe.
·
Novica
is highly focused in its marketing, offering a range of premium products
(priced from $25 to $4,000 plus shipping). For Novica, artisans are ‘artists’,
and customers are ‘collectors’. They describe themselves as ‘eliminating
numerous middlemen’, through the Internet, so that ‘artists make more,
collectors pay less.’
·
They
offer a full refund on products up to 60 days after the customer receives the
order. Returns are sent to the USA (not the country of origin), and the cost of
refunds is born by Novica, not the artisan.
·
Novica have clearly invested
in professional graphic design, high-quality photographs of products, and make prominent
and effective use of interviews with named individual producers in order to
promote products.
·
This dynamic site is
sophisticated in its navigation, grouping products by type and region, offering
frequent links to similar products, as well as customer reviews of artists
themselves.
According
to one report, future plans for Novica include live chats with artists and
streaming audio and video clips. ‘In the very near future, customers will
tune into Novica.com as they do their televisions: to visit an artist's home or
to see how a craft that has existed for thousands of years is actually produced,’
says co-founder and President Roberto Milk.[4]
Novica claims to be ‘the leading
world arts site on the Internet’[5].
However they were unwilling to meet with a researcher as part of this report
and do not disclose financial or sales data on their web site (as some others
do).
The
Novica site is an impressive operation. As with other sites reviewed here, it
remains to be seen if they have a business model which is sustainable
long-term. Novica have the advantage in being able to select only the
best-quality artists, and focus on premium products (with premium prices). This
is not generally an option for some of the fair trade operations reviewed
elsewhere, whose mission is often to provide employment and income for (poor)
artisans and their communities.
However
there are lessons to be learned from the Novica site: it is consumer-oriented, attractive
and colourful, making strong use of the stories of individual producers (via
photographs and interviews). The site makes also makes use of dynamic links to
promote products and artists, has seasonal promotions (eg Christmas, Mother’s
Day etc) and has forged a number of marketing associations (eg with National
Geographic magazine).
Novica
has also invested in a regional network of offices to maintain quality control
of products, to ensure that photographs and interviews are of a high standard,
and to consolidate shipping via courier. The have also developed effective
means of redress (see section 6.1 Barriers to e-commerce for craft producers)
with their 60-day returns policy, addressing the fears of consumers who may be concerned
about quality of workmanship, or of damage to products during delivery.