Current Issue
This Month's Issue

Follow Fast Company

We’ll come to you.

4 minute read

Ebay's Fair-Trade MarketPlace

A new partnership between eBay and an unusual social enterprise aims to give the world's artisans access to a bigger market — and a fair share of the revenue.

Scaling Up: World of Good's Priya Haji, left, and eBay's Robert Chatwani target the $65-billion-a-year gifts business. | photograph by Leslie Williamson
Scaling Up: World of Good's Priya Haji, left, and eBay's Robert Chatwani target the $65-billion-a-year gifts business. | photograph by Leslie Williamson

In 2004, Robert Chatwani, an eBay marketing executive, visited India with his family, saw some women making jewelry in a market, and had a brainstorm. "I bought some on consignment, and a small team at eBay put them up on the site just to see what would happen," he says. "Seven hundred dollars' worth of products sold for $1,200 in just a few weeks." Inspired, Chatwani got eBay's blessing to build a business around socially positive, "fair trade" imports. In September, the company launched a new partnership and online marketplace that promises to sell more fair-trade goods than have ever been sold in one place. EBay is trying to do for the mothers of Asia, Africa, and Latin America what it did for their U.S. counterparts, with a goal of penetrating deeply into a gifts market worth $65 billion each year. Those numbers sound tantalizing, yet can a big brand help small businesses grow without undermining their fair-trade values?

Between 2004 and 2006, Chatwani did some serious moonlighting, studying how to structure eBay's newest enterprise. He talked to the World Bank. He met with NGOs. He made field visits to villages in rural India. He says he found "a lot of players focused on supply: helping with financing, building producer organizations, guiding design, growing capacity. The big void we felt was somebody driving large-scale consumer demand." Then he met a social entrepreneur named Priya Haji, who had founded a group called World of Good, which focused on just that.

Haji's grandmother had been active in Gandhi's movement, and her physician father ran a free clinic in Bryan, Texas. As a student at Stanford, Haji won awards for founding a rehab center in gang-ridden East Palo Alto, California, then earned an MBA at Berkeley. On a trip abroad in 2004, she conceived the idea of connecting the artisans she met, most of them women, with the American market. Along with one of her best friends from business school, Siddharth Sangvhi, she started World of Good to market fair-trade products through displays at stores including Whole Foods and Wild Oats. She still has an undergraduate's wide-eyed intensity: "We're trying to get consumerism to be a force for good."

"Fair trade" has typically meant commodities such as coffee, tea, or chocolate with the TransFair USA label, guaranteeing minimum prices for farmers. But for handicrafts, fair-trade standards are looser. Groups such as Novica and Ten Thousand Villages work overseas to ensure improved labor conditions and fair prices, with more of the proceeds going to local craftspeople.

World of Good shares the goal of raising artisan income, but rather than monitor production itself, it markets other organizations' fair-trade products. WorldofGood.com by eBay, its new online superstore, is its biggest platform yet. World of Good is a hybrid operation: The for-profit retail business donates 10% of net profits to its sister nonprofit, which publishes an international fair-wage guide and does advocacy work. WorldofGood.com is being launched as a separate site; the companies will split the revenue, and listings will also appear on eBay, which pays licensing fees to World of Good and collects its usual seller fees. Chatwani says the main eBay site will carry banner and keyword advertising for the new site.

WorldofGood.com provides a multidimensional view of the benefits of fair-trade goods. (Unfortunately, cloying terms such as Goodprint, Trustology, and People Positive may put off some shoppers.) On the site, you can search for products that benefit a specific cause, read artisans' bios, and check the third-party verifiers for each Ethiopian beaded bracelet or Afghan hooked rug. The site links to a social network and blogs — it's like a mashup of Facebook with the night market in Luang Prabang.

The point of all this, of course, is to sell more goods made by small-time artisans, and for Haji, eBay is a fine place to do that: "If you ask the woman in India, she doesn't care whether her customer is self-identified as 'socially conscious.' " But the question of scale is challenging. At one World of Good presentation I attended, a staffer from another development nonprofit asked whether suddenly upping the number of orders to a cottage producer might lead her to press her children into service — a truly perverse consequence.

International Fair Trade Association president Paul Myers, who founded Ten Thousand Villages, counts himself among Haji's fans. Yet he worries that standards are being watered down as the movement grows, leading to what he dubs "fair-trade lite" and eroding the trust-based relationships that define fair trade far more than any price floor. He says he's "not sure" about World of Good linking up with such a large company while leaving its monitoring to third parties such as Novica. "One of the concerns some people have about the World of Good/eBay relationship is that it's going to give eBay an opportunity to unintentionally put the fair-trade label on things that aren't fair trade," he says. As World of Good listings mingle with others on eBay, a halo effect could extend to the larger company.

But Haji believes she must think big. If fair trade is actually going to pull more people out of poverty, she argues, World of Good must reach beyond the elite, affluent shopper. "People have raised the criticism that eBay is too mainstream," she says. "But if we don't let in Joe American, who does shop at Wal-Mart, who has never traveled internationally, but who is a thoughtful, kind person and would like to think about things he buys differently, this can't grow."

A version of this article appeared in the October 2008 issue of Fast Company magazine.