Do you drink "fair trade" coffee?
Do you drink "fair trade" coffee? The "fair trade" movement is an attempt to ensure that producers in poor countries are fairly compensated for their work, their produce etc., rather than being taken advantage of by huge corporations who want to pay as little as possible for the coffee, clothing, electronics, etc., that the turn around and sell to the rest of the world.
The "fair trade" movement's success depends on the awareness of consumers and their willingness to pay more for a product than the current "market price". Recently I visited a supermarket in the USA that carried many fair trade products. The coffee beans they had for sale averaged US$18-20/lb. If I shop in my local Safeway Supermarket, coffee beans cost me around US $6/lb. What do I do? Should I pay 3X more for coffee in the hope that the farmers will receive a bigger cut or should I go to another store and buy cheaper coffee? What would you do? Fortunately, I was not looking for coffee that day!
Once in while (not often enough), we have a customer who is very concerned with the fees that a helper needs to pay in the Philippines to come to Hong Kong. The helper, who is poor, almost always pays more than the employer, who is materially richer. At Arrow we've developed a system that doesn't leave the applicants at the mercy of recruitment agencies in the Philippines, and as a result, Arrow ladies pay 40-50% less than the industry average. Last Sunday, one of our ladies showed me a list of 10 ladies she had sent to Arrow. I asked her "Why?" hoping she'd mention our care and love for helpers, but she gave the same answer I always hear "Sir, you are the cheapest!"
Recently one of our customers asked me if I could arrange a big discount for the lady they wanted to hire. They didn't want her to have to pay so much. I told them, "if you are willing to pay more, I will make sure she pays less in the Philippines." I offered them the "fair trade" coffee deal. They walked away. So let me ask you, are you willing to pay more, so that the helper can pay less? Most of our costs, air tickets, medicals, rents, salaries, etc. have gone up, but we haven't raised our prices. Our profit margins are around 10%. If Arrow agency fees were $7xxx, would you still want to do business with Arrow? I would raise prices for our HK customers and make sure our Filipino applicants received a big cut in fees, if I thought the market would allow me? What do you think? I'd love to hear your feedback.
