Building a viable business on ethical trade

There are many things to consider when setting up an online retail business – the amount is mind-boggling! If products are being sourced overseas, decisions also need to be made early on around standards including ethical work practices and the fair treatment of employees in the factories supplying your goods.

Unlike other business decisions, there are no right or wrong answers in this area – ethical trade. For most business owners the choice is more a moral one, and distinct from financial realities.

Ethical Trade – what is it?

Simply put ethical trade is ‘supply chain with a heart’. The Ethical Trading Initiative offers a more thorough definition. Ethical trade means retailers, brands and their suppliers take responsibility for improving the working conditions of the people who make the products they sell.

Companies with a commitment to ethical trade adopt a code of labor practice that they expect all their suppliers to work towards. These codes address issues like:

• Wages
• Hours of work
• Health and safety
• Right to join free trade unions

While Fair Trade applies to products, and is focused on pricing and trading conditions for primary producers, ethical trade is concerned with the working conditions throughout the supply chain, and can relate to the manufacture, sourcing and supply of any product.

Be true to yourself

When I set up my fashion label James&Co, employing an ethical supply chain and producing goods that were cruelty free was of upmost importance. I am personally very passionate about these issues, and it meant that in any business venture I undertook, I had to remain true to my beliefs.

When I was setting up my business five years ago, the one bit of advice that stuck was to do something I was passionate about. I have always liked a good jacket. In my previous profession as a lawyer, I always wore jackets. I actually bought a leather jacket every year for many years. Then the fiasco that is live exports came to prominence, and I found myself thinking, “I just can’t do leather”.

Fundamentally this is what led me down the path of creating a business that employs an ethical supply chain.

Ethical trade means retailers, brands and their suppliers take responsibility for improving the working conditions of the people who make the products they sell

I chose to produce faux leather jackets produced via an ethical and cruelty free supply chain. I try to ensure human rights are also upheld at the factories I have used in Pakistan and India. This includes no exploitation of labor, no underpaying and no substandard conditions.

Be clear about your Code of Conduct

I am very transparent about the guiding principles at James&Co – they are on our website. At the moment I produce our jackets at one factory in Pakistan. I expect the company to adhere to our supplier code of conduct.

While government laws for labor and labor regulations are a strong starting point, you will always find businesses that flout the law. To lessen this risk, I am careful about the countries I manufacture in. For example, Bangladesh has a really bad reputation for exploiting its labor. Whilst I would love to support people earning a living there, I choose not to manufacture in these sorts of places because I can’t guarantee my Code of Conduct will be respected.

When I began manufacturing the jackets, I initially started in India as I had done a lot of work there in a previous career. While you have to rely on instinct and word of mouth, I also used an agent to give me confidence in my decisions.

The agent I used has a large export business, so her reputation would not be worth anything if she introduced me to the wrong kind of supplier. Social media is a really strong force for ensuring transparency and honesty in business dealings. You can have all the fair trading laws in the world, but the most powerful deterrent I find is the prospect that you could be named and shamed on any kind of social media website.

Press the flesh

Whilst you cannot be present at the factory 100 percent of the time, you have to be able to accept a fair bit of trust that your ideals will be upheld.

I satisfy myself by visiting my factory on a regular basis. When I was there a few weeks ago I was constantly at the factory. I met all the workers. I saw how they worked with the families. I felt satisfied within myself about the people I deal with.

Social media is a really strong force for ensuring transparency and honesty in business dealings

Information flow to consumers

From my client base, I am not seeing an active demand for supply side transparency, as yet. The majority of positive feedback I receive about my jackets is that they are cruelty free.

James&Co is also accredited by PETA, so a large proportion of our customers are vegan. They are very much driven by what they wear and what they eat. They don’t want to eat or wear parts of animals.

Profit vs. ethics

It’s probably fair to say that you could always source a product cheaper if an ethical supply chain was not important. You just have to go into the large shopping chains to see examples of this strategy.

My products at James&Co are not high end but we are focused on quality. If you compare the faux leather wallets and bags at large discount retailers, the quality there is nowhere near as good. We’re trying to price at a point where you can be ethical in your choices. You shouldn’t let budget be the controlling aspect of whether you can make an ethical choice or not.

Finding your own path

I have found on my journey with James&Co that I am growing more and more passionate about way I build ethical standards into the business. I did not start out with a goal for supply side transparency, but as I have matured my business and my understanding of the industry, I am seeing alternative ways of doing things.

You shouldn’t let budget be the controlling aspect of whether you can make an ethical choice or not.

You are never going to be all things to all people. For example, some people would say faux leather was not very ethical when you consider the chemicals used to produce it.

You need to find a way to remain true to your values whilst building a viable business.

To me, the Ethical Fashion Forum, the industry body for sustainable fashion, and representing over 6000 members in more than 100 countries, has been a very helpful organisation. They offer a sourcing and business database, online network, business intelligence platform, and global program of events. You can also access their sustainability tool kit for the fashion sector.

We are a members of the Source and have found it helpful in gaining access and locating suppliers who meet our standards.

 

Featured image via Pixabay under Creative Commons CC0