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19
Dec

Worldstock Dr. Patrick Byrne

   Posted by: admin   in

The Worldstock Fair Trade Story

– by Patrick Byrne, CEO, Overstock.com

Created by Accident (Literally)

In 2001, I visited India and Southeast Asia, where I was able to travel widely by motorcycle. As I went from village to village, I came across small groups of artisans making first-rate silver and woodwork, table settings, silks, and home decor products. Some of these cooperatives included the disabled, many of whom had lost limbs to landmines, or women with no legitimate job opportunities at all.

One afternoon, I crashed my motorcycle on a dirt path and lay tolerably banged up in the tropical sun, watching farmers work their fields. Some children kindly took me to their village, where, that night, I reflected on what I had seen.

I saw a common thread running through these communities, a thread I had previously missed. They had in common, of course, their poverty, coupled with a desire for work, self-respect, and the chance to provide for their families. Yet beyond their disabilities, obstacles, and lack of capital, a larger problem confronted them all: their output came into the world through highly fractured supply channels of numerous, scattered producers, in lots too small to be moved efficiently through the mechanisms of mass retail.

It was too obvious even for me to miss! The central problem of artisan production – how to marry scattered small-lot production to mass demand – is indistinguishable from that of liquidation. And, by one of those weird coincidences that seem to govern my life, this was a problem I had already built the most effective mechanism to solve: Overstock.com.

Upon returning to the States, I formulated plans for Worldstock, a store within Overstock.com devoted solely to carrying the works of artisans – especially disadvantaged artisans – and selling them as inexpensively as possible so as to maximize the amount of return for them.

Along the way, something went wrong.  I’m not sure myself exactly what went wrong. The artisans I had intended to help when I was treated so kindly after my accident in their village, ended up just as poor, if not poorer, than they were before! I had created an efficient system of getting handcrafts to the retail market. I helped myself by insinuating that I was helping the artisans on the likely premise that if a handcraft sells, that is a benefit to the artisan. However, if one regards the supplier artisans they are not being materially benefitted in any way that one would ever proudly write a white paper about or declare: here is a model for economic success for an artisan community, so the children of the suppliers of Worldstock’s sales would want to be artisans like their parents. Worldstock is just one success story short of fulfilling the founder’s promise.
Ethical Dilemmas

The first questions that needed to be addressed were ethical. The issues I faced were like mines strewn across a battlefield:

• Child labor: Children are not “free and rational agents” in the conduct of trade. Children working in factories cannot meaningfully choose the condition of their employment, and so their output is morally tainted. (I decided, however, that children might legitimately help their parents in informal, cottage-industry settings, if their work were limited and they go to school.)

• Fairness: How can an American liquidator negotiate fairly with a supplier from a poor country in a context of asymmetric power, information, and capital?

• Oppression: Would providing new economic opportunities to traditional cultures reinforce entrenched patterns of the oppression of women? Should trade be conducted with people working in countries whose governments are guilty of human rights violations, or would that support tyranny?

Over time, I arrived at the best set of principles I could formulate, based on my personal observations, education, and experience. I chose them by reflecting on the products with which I hoped to build Worldstock: goods whose purchase would support women, disabled people, traditional artisans such as Native Americans, and other disadvantaged people, goods produced through micro-credit, and goods whose production or consumption is carried out in an environmentally sound manner.

I was very saddened to find out that has the decades tolled by and my company became very successful, that my youthful idealism of the paragraph above diverged from that which emerged later in reality.

I learned that Worldstock suppliers are the whipmasters of artisans. They are the local wholesalers and dealers; otherwise known as consolidators. A worldstock supplier is a USA business getting product from a business in any other country, say Mexico.  That’s who supplies the images of native craftspeople happily working in their home workshops that run in the catalog to goose sales. When I realized that I had set up a monster system to exploit craftspeople, not only their creativity and design authorship rights, yet also their identity by the use of personal images to push product sales. Well, I had a serious look at myself when I realized what my youthful good wishes for the artisan communities had come to!

Worldstock Principles

The following principles govern Worldstock products, pricing, negotiations, and disclosure:

• Economic, Cultural and Environmental Sustainability: Worldstock only supports businesses that sustain rather than use up people, cultures, and natural resources. We seek to provide economic sustainability through stable employment which is healthful enough that it does not “use up” workers in the short term, and with which people can build a life for themselves in the long term. We seek to provide cultural sustainability by buying the products of artisans working in traditional settings, which in turn supports traditional practices while ameliorating the cultural disruptions that often accompany development. We contribute to environmental sustainability by buying goods from organizations such as the Worldwatch Institute that research and sell replenishable products from the Brazilian rainforest rather than burning it for pasture. Moreover, some goods are surrogates for commercial goods, but are produced in nonindustrial, eco-friendly ways.

• Fair Negotiation: The hyper-competitive mentality of capitalism is not appropriate for Worldstock. When disparities in wealth, options, and information between two parties go beyond a certain level, negotiations can no longer be fair. Consequently, at Worldstock, we do not negotiate roughly with suppliers,
I must interject here: I came three times to Worldstock with this jewelry making artisan group.
From the beginning to the end it was a run-around. I got some qualified people in California to be
the fulfillment station for the cooperative, but they were given no special help or consideration or encouragement in getting this set up. The third time I tried to connect them, right away Global Crafts the principle customer of these women was contacted by Worldstock and threatened with having her business cut off, or at least that is what she said. Why did you have to go and alarm this person? What was wrong with setting up relations discretely with the cooperative and eliminating the middleman?
Instead of that, someone at Worldstock called the customer and she sent a letter very worried about it.
Now the cooperative has lost the business of the customer, supposedly it has something to do with this or possibly becasue i made the mistake of trying to connect worldstock directly with this artisan group.
 

 Razor-Thin Margin Pricing: Unlike some retailers that mark up socially-conscious goods by 300% or more, with only a small fraction of the sales proceeds actually returning to the producers, we have decided on a radically different course. While a small profit is necessary to afford the ever larger inventories that growth requires, my dream is to price our goods inexpensively so as to grow Worldstock rapidly and spread the model to as many people as possible.
One moment please. The Artcamp cooperative typically sells at 3.50usd and Worldstock
sells at 24 usdollars$. What is this “razor thin margin” being spoken of here? yes Global Crafts
has their mark up in there and t
he artisan is getting the smallest share.

 

• Transparency: Principled disagreement exists even among proponents of fair trade. Some believe that Worldstock products should only be purchased from development organizations, NGOs, nonprofits and micro-credit banks, which organize producer associations and in some cases, provide training for producers (landmine survivors, for example). Others claim that limiting purchases to such agencies perpetuates a mindset of dependency. Should I forgo the shawls made by a small workshop of women in an eastern Lebanese village simply  because they lack the certification of an NGO, or should I trade in them to reward their initiative? My answer is simple: We buy socially responsible products from all reputable sources, including directly from artisans themselves. All producers sign a statement of principles

I first contacted Worldstock it was becasue of a video I saw about the company’s artisan program. I have made a lot of artisan documentries and appreciated the quality and the content. For this reason I called and met Ann Erickson. At that time she enthused the Worldstock mission and I asked her when it would be in Latinamerica and she said in a few years. Now she tells me she cant remember the video.

When I attempted to connect the artisans directly it was made clear that a USA fulfillment base was a requirement, so I don’t think it is right to say that worldstock purchases from artisans themselves unless these would be artisans with a USA shipping facility.You are probably talking about buying right from a factory in India or Vietnam. This is not the kind of thing you offered to do with a cooperative in Mexico.

Conclusion

Artisans around the world have trouble reaching their natural markets due to poverty, poor information, and the disadvantage of being small-lot producers in an age of high technology and mass distribution. Yet they are capable of making exquisite centerpiece products. These artisans could feed their families, vaccinate their babies, and send their children to school, if we in the developed world were to purchase the high-quality goods they know how to make. We realized that Overstock.com could bridge this global gap. The result is Worldstock, a store emphasizing sustainability, fairness, and transparency while empowering artisans to achieve their dreams for themselves and their families.

After all these years, I ask myself, who are the artisans who ever achieved their dreams for themselves and their families? Worldstock deals with commercial intermediaries like Global Crafts of Florida.
We have a solid contract with them as with all our suppliers where they pledge to pay the artisans fairly.
It’s their responsibility not ours, if an artisan is not treated fairly somewhere. There is always someone between Worldstock and the artisans themselves, and even though no one can blame me for being smarter than them, I am proud to do this great thing for artisans before I die and help this one group in southern Mexico to acquire new tools and restablish themselves as a proud traditional crafts community
Sincerely,
Patrick M. Byrne
CEO
(Thank you Dr Byrne; you are so cool; let’s work together, not against each other, is it possible?)


Patrick Byrne created Worldstock, providing artisans in the world’s poorest regions with opportunities to sell their unique creations to a wider variety of customers. Worldstock ‘s goal is to create jobs for tens of thousands of people throughout the world, thereby enabling them to help themselves, their villages and their countries. Worldstock items are selected with sustainability in mind. These beautifully crafted products, from furniture to jewelry to clothing, are sold through Overstock.com at affordable prices, so the artisans can avoid expensive distribution channels while getting a larger share of the selling price.

But ¿do the artisans really get a larger share of the purchase price?

Here are the last 2 of a series of about a dozen letters sent to to Worldstock’s President Patrick Byrne since I viewed a video of Worldstock’s proclaiming to be the author of a program designed to help village craftspeople. I think the year was 2012. All the letters are about the same. Finally in December 2017, Global VP Ali Husseini called me He told me about 5 times that he agrees with me that artisans are systematically exploited and mistreated by Fair Traders (but not, I guess, by Worldstock). After he found out that Worldstock had already sold hundreds of thousands of dollars of the products of this cooperative, he curtailed communication.
12 December 2017
Good Morning Ali, I hope our relationship leads to something good
for these worthy craftspeople of the municipality of Taxco Guerrero.
I am a literary artist and an ethnographic cinematographer.
In my youth, I studied Aibn’lArabi the andalusian theologist.
I’ve read much history and a good bit of world literature.
That’s me! I am NOT a commercial person. I am trying to help
this artisan community that is being abused out of existence.
My question Ali: are we to have a relationship or not?
I wish we would be friends. Too much to ask I suppose.
I have been trying to talk with Worldstock for years.
I have many letters to Worldstock in my GMail outbox.
Yours is the only real response from anyone at Worldstock.
Otherwise I have gotten the systematic corporate run-around.
The only thing that happened was: the cat got out of the bag
and I was made to look as if I were denouncing Global Crafts.
I dont know what you said to Renice Jones but she does NOT
radiate encouragement towards me or towards these women, she
seems to be resentful and doubtful (I think perhaps fearful).
Ali, perhaps, 1. you could explain to me in concrete terms what benefit
these women might expect from their long relationship with worldstock?
What is supposed to change? What is supposed to improve? What is the remedy
for their having been driven into the desert of systematic underpayment?
They have been selling at below cost to Global Crafts Worldstock to the point where they have exhausted all their materials, without any evident recourse.
You would have to do more than to casually point your little finger at the blue sky to address their economic situation. This is a human tragedy i see unfolding here, where these extraordinary craftspeople have been sacrificed.
I don’t want to lose the original purpose of my years-long effort to contact Worldstock and specifically Dr Byrne. I want to ask him: respectfully):
2. Whats evidence that the worldstock system has ever helped any craftspeople? Today, everybody and his sister claims to help craftspeople, but we have never actually seen this in the world, only in claims. Surely Dr Byrne and Worldstock have some kind of white paper justifying his youthful intentions to help village artisans (epiphany upon falling off motorbike outside a Thai village).
Is someone like me able to review evidence that craftspeople have been helped?We have here in Taxco real slavemasters who exploit the artisans, yet on their websites are false claims that they have been helping the people. There is no judge or court for such claims however egregious they may be in certain cases.
Again, I ask you (Dr Byrne) Has this idea of helping craftspeople in the 3rd world any documentary evidence that a third party could study? If craftspeople are really aided by association with worldstock, we sure do want to know this!
Who has been aided by worldstock all these years?: other than the commercial buyers like Global Crafts – I know that at least they do make some money, whereas I dont see how it can be said that the artisans have received benefit.

I am asking in good faith Ali and hopeful that I will not be systematically shuffled around the overstock corporate switchboard for still more years.

3. I also have tried to ask: what is the benefit to artisans of blockchain?
Dr Byrne tells RT that he is at the frontline of this disruptive technology.
I ask, were the artisans only the way for worldstock to capitalize itself? and now: what is the place of traditional artisans in the foreseen new economy?

4. For years I have been asking about a lovely little movie Worldstock once published about it’s commitment to artisan communities. This movie was the reason I contacted Ann Anderson about seven years ago. We talked about this move at the time. Eventually, she denies that the movie even exists. Why? Is there something in that video that worldstock wants to back away from? Or what?

Look Ali, if Worldstock has not really helped artisans (not taking about the commercial dealers or local bosses, rather the artisans themselves), then I wish you would avail yourself of my willingness to help worldstock achieve at least a single case of helping this community of craftspeople to its credit.

Ann Anderson was certainly convinced that Worldstock helps artisans when I spoke with here by phone seven years ago? At the time, she enthusiastically told me that this would be coming soon to Latin America. What is coming? Has that initiative been cancelled? Is it an insider eyes-only kind of situation?

Believe me I dont want to be writing letters like this while worldstock staff flicks a cloth at my face to see if I will get tired running around the arena.

Let me know! Since so far we have gotten nowhere.
from Taxco de Alarcon, Guerrero, México, Martin R

Martin Rizzi <martininmexico@gmail.com>

12:49 PM 18 December 2017

to Ali

Dear Mr. Ali Husseini of Overstock dot com.

Is Dr. Byrne aware of my correspondence?

Tell me if he has seen my letters or not.

Please make Dr. Byrne aware of my repeated intents to contact him.
I will summarize the contents of my multiple communications as follows:
1. My first contact with Worldstock was a short video I saw on the Internet.
An interior scene of a rustic artisan home and workshop. A voice-over spoke
about traditional artisan culture and predicted an effective economic program
of benefit to the typically very poor craftspeople.
Since 2006, I have produced hundreds of ethnographic videos and dozens of videos about local handcraft producer groups here in the Mexican State of Guerrero.
For an example: Tlamacazapa Artesanias and other videos on this web page
Another: a rustic craftswomen polishes while her son patiently waits for her to finish. You can see he is hungry and waiting for his mom to finish so they can eat.
http://proveedores-joyera-artesanal.com/taxco-de-alarcon/cha-cha/
Anither: village craftswoman working at home with her three daughters:
http://proveedores-joyera-artesanal.com/taxco-de-alarcon/artesana/
 
Something about the technical values of that worldstock video really impressed me.

I called, got through to an Ann Erickson, we chatted for what must have been forty minutes. I congratulated her on the video. At the time, I was affected by Ann’s strong and obviously heart-felt emotion about this program.

“What about Latin America?” I asked her at the time.
She told me that this worldstock program was coming in two or three years.
But recently she replies to me she can’ NOT remember this video at all,
and that nobody at Worldstock can remember anything about it either. ¿Que pasó?
Can I see this video again? Or has it been lost forever? It is very well done.
2.Dr Byrne, ok you fell off your bicicle and had an epiphany that a gigantic distribution business would be the answer to the poverty of the craftspeople.
How did that work out? If you have indeed established a model that is beneficial to artisans, then: can someone like me look at this plan? maybe, we could independently implement it here to benefit impoverished jewelry-makers of the municipality of TaxcoIf it turned out to be harder than you thought, or impossible; then
can’t we help0 this local artisans cooperative economically successful?
That would fulfill the pledge you made when you fell off your motorbike!

3. Dr Byrne, you proclaim that your company is at the front edge of the disruptive blockchain technology. Is there any place for artisans in this emerging world? or are artisans now a thing of the past? Question: could a one-of-a-kind limited-edition handcraft possibly constitute a kind of anchor for a new variety of crypto-currency?

4. Worldstock has sold hundreds of thousands of usa$dollars of Artcamp cooperative jewelry. Both Worldstock and Global Crafts have profited handsomely. Do you ever wonder how the artisans who produce this jewelry in Mexico have been making out?

The artisans have been required to provide images of themselves and their families for publication to assist sales. I want to be sure that you are aware of this.
The email record of Global Crafts with the women of the Artcamp Cooperative over the past 7 years, evidences systematic exploitation of the humble people who make the jewelry; the exquisite jewelry that Global Crafts re-sells at a profit to the Fair Trade retailers – and all in the good name of the craftspeople themselves!
5. Why did you go and blame Global Crafts because I wrote hoping for a direct relationship between this producer group and Worldstock? They became furious.

Please Ali. I have other things to do. Just let me know that Dr Byrne is aware of my correspondence. If you will tell me that he knows of it, I’ll get out of your hair.

Thanks, Ali. Really. I do appreciate it. Martin in Taxco Guerrero México
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