By now, most businesses are aware that a Fair Trade certification exists. However, only a fraction of companies ever seriously explore pursuing it. Why is this and should more businesses have a change of heart?
What is Fair Trade?
Poverty, climate change, child labor, sex slavery, and unsanitary working conditions – these are just some of the issues thousands of people face on a global scale every single day as a result of trying to make a living and provide for their families. Unfortunately, in the pursuit of driving higher profits, many businesses knowingly and unknowingly drive prices down at the expense of honest people, like farmers, fishermen, and artisans.
When businesses become Fair Trade Certified, they’re signaling to the marketplace that they do not take advantage of the people along their supply chains. Instead, they treat all partners with equal respect and are committed to doing the right thing.
“When you see a product with the Fair Trade Certified seal, you can be sure it was made according to rigorous social, environmental, and economic standards,” Fair Trade USA explains. “We work closely on the ground with producers and certify transactions between companies and their suppliers to ensure that the people making Fair Trade Certified goods work in safe conditions, protect the environment, build sustainable livelihoods, and earn additional money to empower and uplift their communities.”
5 Business Benefits of Fair Trade
Today, Fair Trade Certified products originating from more than 45 different countries are being sold in the United States marketplace. In the process, 1.6 million producers have collectively earned more than $440 billion in financial benefit.
Fair Trade certification certainly has a positive impact on producers and suppliers, but what about the businesses selling the end product? Are there any benefits beyond having the peace of mind that your company is treating people fairly? Yes, and here they are:
- Demand for Ethical Consumption
Twenty years ago, there wasn’t a huge demand for what we now consider Fair Trade products. It was a niche market with only a handful of customers and goods. But as issues like poverty, climate change, and poor working conditions have been exposed, a huge shift has occurred.
“Customers are now much more aware and interested in where their food [and other products] comes from, who grows it and how. This trend is putting businesses in the spotlight as consumers want to know that workers are not being exploited,” Holly Tuppen writes for Green Hotelier. “It means ethical consumption is growing fast. It’s currently growing nearly 8 times faster than the economy as a whole. [Fair Trade] sales have doubled year-on-year since 2003.”
- Increased Trust in Business
When customer know that a business is doing everything it can to respect its supply chain partners, they’re much more likely to trust the other decisions and promises the company makes. In fact, research shows that 9 in 10 consumers who have seen the Fair Trade mark trust it.
As countless Fair Trade Certified businesses have learned, the certification helps them appear more transparent in a business world where consumers are often distrusting of the brands they interact with.
- Ability to Influence Others
When people, partners, and stakeholders trust your business, you gain additional influence in important groups and circles. As a result, you’re able to inspire others and foster change, much like this fair trade business.
The long-term benefits of having this sort of influence can’t be overstated. It may take a few years to see the positive effects, but with continued dedication, they will emerge.
- Differentiating Factor
The internet has increased competition in virtually every industry. The barriers to entry are much lower than in the past and this has created highly competitive markets where it’s challenging to stand out.
If nothing else, Fair Trade certification is a differentiating factor. When a customer is comparing multiple options, that little label will increase your chances of earning their sale.
- Better Understanding of Your Business
Finally, Fair Trade certification forces business owners and leaders to develop a more intimate understanding of their organization.
In order to earn and maintain the Fair Trade mark, every aspect of the supply chain has to be examined, scrutinized, and continually monitored. As a result, business leaders have no other choice than to learn about every aspect of the company. This knowledge leads to better decision making and more choices that benefit the business as a whole (rather than just one aspect).
Pursuing Fair Trade Certification
It’s not easy to become Fair Trade Certified. Your business must go through a rigorous approval process that looks at dozens of factors along each stage of your supply chain. But as you pursue certification, you’ll realize that it benefits everyone – including your business. Failing to realize this could lead to missed opportunities.