Why do business in an ethical way? - Fair Marketeers

Running a business in what we would call the ‘right’ way can be challenging to set up and comparatively more expensive to run, in comparison to your competitors.

It can be hard, knowing that your competitors can provide a similar product to your pool of customers at a lower price than you are able, simply because you are trying to ensure your products are made in such a way as to support the livelihoods of your employees and the health of the planet.

In comparison, they pump out their widgets at the lowest possible cost, never thinking of caring about the people who are slaving away (sometimes literally) in their production facilities, working their hands to the bone in their name.

They will never meet the workers, nor will they in many cases spare a thought for what they can do to make their lives better.

And yet, they beat you out on price and win customers as a result. That’s frustrating. If only you didn’t care, life would be so much easier…

This is the position in which we found ourselves with our Tailored Suits business.

To many in our market, a suit was a commodity product. For someone that wanted a tailored suit, there were a few different places they could go online to purchase one for approximately the same price (sub $500).

But of those options, we were the only brand that had decided not to manufacture in China, despite the fact that we could access a lower-cost manufacturing base there.

We opted to manufacture in Bangkok instead. We chose Bangkok for two very simple reasons:

1. We knew that Thailand had a much longer history of tailoring and that we could make a better quality product there as a result (we conducted trials with manufacturers in a number of countries), and

2. In 2012, we didn’t know how to go about inspecting a Chinese factory or verifying claims they make or certifications they claim to hold. We knew Thailand much better and understood that, even though the rates of pay and standards are lower than a fully industrialized country, unscrupulous employers could get away with a lot less (Thailand was still democratic at this point, too).

So we went over to Bangkok, having made the decision to manufacture there and met a large number of tailors during the course of that week.

What we found was a thriving industry with a lot of competition for talented tailors; indeed, the best tailors can command significantly more money than average, in direct correlation with the quality they provide. With the rise of online tailoring globally, this amount is going up and up.

[As a beside, I also spoke with a tailor who had made some suits for our biggest competitor in Australia, and claimed he was still, to this day, owed $1200 – unbelievable, if true].

We found a tailor we trusted immediately; he was honest and direct, committed to his family and his employees. Indeed, his tailoring team were a family that worked out of their small facility one street behind the shop.

Naturally, we loved the fact that we could use our business to enhance the quality of his life and the lives of the tailors in his factory. Accordingly, we took the decision there and then that we would let the tailors set their own rates and we would not try and negotiate them down. If we couldn’t make the business work on that basis, then the business should not exist.

We didn’t demand exclusivity and we ensured they had the flexibility to participate in important holidays, such as the water festival, by managing the expectations of our customers.

So despite the fact that our costs increased approximately 30% as a result, we immediately knew that we had found the right manufacturing partner.

As it turned out, we were spot on and though we of course had our ups and downs, we built a thriving business together over the course of a couple of years.

It was not without sadness that we sold that business earlier this year. But we did ensure, as a central pillar of that sale, that the incoming owner not only carried on using the same tailors for their production, but understood and bought into our vision of an ethical manufacturing base.

I’m glad to say nothing has changed in the time since.

During the course of our partnership, we produced well over a thousand suits and shirts, paying our tailors well into the six figures in wages.

All that economic benefit, created from a simple, decently-executed idea. That’s why we do this.

The biggest highlight of the whole enterprise

We worked with our head tailor to create a business that was profitable and as sustainable as possible over the course of a couple of years. We had our ups and downs, but we were there for each other.

In the early days, when we had no capital, he allowed us to pay each month in arrears. When he requested a prepayment later on to facilitate his purchase of a house, we were able to do that.

We have on two separate visits met his lovely family – his wife and 3 young kids – and we knew that he is Nepalese and his wife Burmese and had done things the hard way; succeeding in spite of a Thai Government that didn’t really want them.

But we didn’t know the extent to which our business was helping people until he shared the story with me in a Skype conversation just a couple of weeks ago.

I have extracted it below completely, but with names redacted:

Tailor_Skype_Conversation

We’ve been working in online business for five years now, but this is honestly one of the most touching moments we’ve had. Our tailor is a very stoic fellow; he’s self-made, moving to Bangkok in search of a better life when he was a teenager with 400 Baht in his pocket, learning his craft for ten long years and building a business that supports not only his family, but many other people.

To have been able to be a part of that – even if at the time we didn’t know how big a part – is something for which we’re very grateful.

Why do we do it? We do it for moments like this.

Maybe those other competitors are more profitable, but we still built (and managed to sell) a perfectly respectable and sustainable business – and we are the ones who get to go to sleep at night, secure in the knowledge that we’re making a real difference. After all, isn’t that what life is supposed to be all about?