First of all, I’m happy to hear you’re actually trying out this idea in a concrete way. I hope it works!
Have you looked at Newman’s Own? It’s the most famous example of this idea in the United States.
Re drop shipping: I get that it’s attractive because it has low start up costs, but I’m skeptical of this choice. I think drop shippers are basically a commodity business and I doubt people would choose a drop shipper on the basis of charity alignment. I would guess the best places to do this type of product would be in fashion (TOMS) or luxury good more broadly, where people can use their purchases to signal their altruism.
Re Dropshipping: why do you doubt people would choose a dropshipper on the basis of charitable alignment? I suspect many people would prefer a charity get the profit over a private individual, especially EAs.
I also think fashion could be a good direction to go, capitalizing on a virtue-signaling advantage while forgoing the “no-brainer” advantage allowed by products with few dimensions of variability. But if you can get an apples-to-apples comparison, why wouldn’t a consumer choose a charity?
I think EAs are a tiny number of people, and spend only a tiny fraction of their income on drop shipping.
In the abstract if you ask me, where I want the money to go, I would say charity. But when I shop online I really only care about price, reviews, and delivery speed.
Afaic, drop shippers don’t really develop brand names or brand loyalty.
Amazon is in many ways a dropshipper with a strong brand an high loyalty(although they’ve gotten big also because of their warehousing). I do completely agree that people mostly care about price reviews and delivery speed. That needs to be matched, and then people might consider guided consumption. The good thing is that I believe guided producers can match the competition and then have that unique selling point of giving profits away.
Our researchers spoke to Newman’s Own and I’m soon speaking to TOMS as well, and brands like these are looking at sales channels that align with their mission, and guided producers might be uniquely suited to serve their needs.
Yes, I’m familiar with Newman’s Own and that is definitely an example of a Guiding Producer. It’s great that there’s a charitable trust that benefits from our purchases. In my view, this feature was insufficiently exploited by the company. Initially Newman was intending not to advertise the pro-social ownership (thankfully he was persuaded otherwise). But with the degree of advertising and consumer awareness of Newman’s Own’s mission, I suspect it is not enjoying the degree of advantage that it potentially could if it more explicitly viewed itself as a channel of pro-social Consumer Power. Another issue would be that the product dimensions numerosity may make it not an ideal GP.
If there was a broad effort to inform and empower consumers as well as a broad representation in the economy of Guiding Producers in the economy, I believe GPs could rapidly capture market share. The key would be enabling the convenient “no-brainer” decision for consumers.
The key is indeed getting to a situation where you’re matching the offering (prices, product, delivery speed, UX/UI) of the competition and that might take a very long time and cost large sums of money, so that’s easier said than done. Only then does it become a no-brainer for the general public.
I agree that Paul Newman made the mistake to not publicly voice how much good they were doing. That’s humble and noble, but if they were more vocal about it they might have been even more successful. Do note that they donated more than 500 million USD so they were by no means small.
Hi Brad,
First of all, I’m happy to hear you’re actually trying out this idea in a concrete way. I hope it works!
Have you looked at Newman’s Own? It’s the most famous example of this idea in the United States.
Re drop shipping: I get that it’s attractive because it has low start up costs, but I’m skeptical of this choice. I think drop shippers are basically a commodity business and I doubt people would choose a drop shipper on the basis of charity alignment. I would guess the best places to do this type of product would be in fashion (TOMS) or luxury good more broadly, where people can use their purchases to signal their altruism.
Good luck!
Re Dropshipping: why do you doubt people would choose a dropshipper on the basis of charitable alignment? I suspect many people would prefer a charity get the profit over a private individual, especially EAs.
I also think fashion could be a good direction to go, capitalizing on a virtue-signaling advantage while forgoing the “no-brainer” advantage allowed by products with few dimensions of variability. But if you can get an apples-to-apples comparison, why wouldn’t a consumer choose a charity?
I think EAs are a tiny number of people, and spend only a tiny fraction of their income on drop shipping.
In the abstract if you ask me, where I want the money to go, I would say charity. But when I shop online I really only care about price, reviews, and delivery speed.
Afaic, drop shippers don’t really develop brand names or brand loyalty.
Amazon is in many ways a dropshipper with a strong brand an high loyalty(although they’ve gotten big also because of their warehousing). I do completely agree that people mostly care about price reviews and delivery speed. That needs to be matched, and then people might consider guided consumption. The good thing is that I believe guided producers can match the competition and then have that unique selling point of giving profits away.
Our researchers spoke to Newman’s Own and I’m soon speaking to TOMS as well, and brands like these are looking at sales channels that align with their mission, and guided producers might be uniquely suited to serve their needs.
Sounds cool!
Thanks for reading it and the well-wishes!
Yes, I’m familiar with Newman’s Own and that is definitely an example of a Guiding Producer. It’s great that there’s a charitable trust that benefits from our purchases. In my view, this feature was insufficiently exploited by the company. Initially Newman was intending not to advertise the pro-social ownership (thankfully he was persuaded otherwise). But with the degree of advertising and consumer awareness of Newman’s Own’s mission, I suspect it is not enjoying the degree of advantage that it potentially could if it more explicitly viewed itself as a channel of pro-social Consumer Power. Another issue would be that the product dimensions numerosity may make it not an ideal GP.
If there was a broad effort to inform and empower consumers as well as a broad representation in the economy of Guiding Producers in the economy, I believe GPs could rapidly capture market share. The key would be enabling the convenient “no-brainer” decision for consumers.
The key is indeed getting to a situation where you’re matching the offering (prices, product, delivery speed, UX/UI) of the competition and that might take a very long time and cost large sums of money, so that’s easier said than done. Only then does it become a no-brainer for the general public.
I agree that Paul Newman made the mistake to not publicly voice how much good they were doing. That’s humble and noble, but if they were more vocal about it they might have been even more successful. Do note that they donated more than 500 million USD so they were by no means small.