Business model design

World of Good: Early Efforts in Ethical Consumption

Imagine a system of commerce in which you knew the people who made your things, and were assured that the making and delivering of these objects harmed no animals, preserved the environment, and empowered humanity. eBay has tried to turn this vision into a Paypal-funded experiment through World of Good. In the spirit of launch and learn, I won’t be too harsh. The combined company has good intentions; they’ve just made some early missteps that will become roadblocks to fulfilling their vision of becoming a marketplace for ethical products.

World of Good
World of Good

First Attempt: Altering eBay’s Business Model to Stack the Deck in Favor of “Good”

The partner company, World of Good Inc., began as a social community designed to create a venue for small producers from India and around the world to sell their artisan wares, and connect to a global marketplace of people who care about the social origin of things. The eBay site World of Good is marketed as a subset of eBay’s business. Handcrafted jewelry, artisanal pottery, natural cosmetics and other products will be cross-promoted along with regular eBay items, and eBay buyers are given ready access to purchase goods on the site. While eBay kept the aspect of their business model that benefits eBay: a fee for placing the product, and a transaction fee for selling, eBay needed to ensure “fair trade” by insisting that everything on the site remains a fixed price.

eBay’s fixed price model is an excellent case study for why Fair Trade pricing schemes are challenging. Free market, liberalizing eBay has a chance to set up an exchange between buyers and sellers, only to insist on protecting the sellers from under-cutting their work. I guess it would defeat the purpose if auctions resulted in an end-price that delivered a below market wage for a seller on this site; but by making everything prix fixe, eBay takes all of the fun and intrigue out of eBay. I’m only left with my finely crafted hand blown vase and a “click to buy” option.

Right step: Let eBay be eBay, all the way through. Point out the inefficiencies and fallacies of fair trade certification by cutting out any middleman and linking buyers directly with the producers of things. Allow the maker to determine the fair trade price, even have a conversation and negotiate, not a third party. The role, then, of certification is to ensure the product maker’s claims at the product and production level.

#2: The Girl Scout Merit Badge Approach to Ethical Buying

World of Good, Inc. aims to connect people to the things that they buy by making supply chains transparent, by connecting the dots between producer and consumer. As World of Good’s General Manager Robert Chatwani says, “We really want consumers to drill down into the detail of what’s behind that product.” In some cases, you even get to see photos of the very artisans and craftspeople who have made your jewelry or straw basket, and understand the impact you’re having on their lives.

But the site uses a confusing system of certification – TrustologyTM. Over 25+ organizations provide validation to earn multiple merit badges representing different ethical claims. There are three levels of organizations – those verifying at the product level, like Rugmark Foundation, those at the producer level, like Rainforest Alliance, and those at the seller level, such as Co-Op America. Then there are over 32 different criteria  under headings such as People Positive, Eco Positive, Animal Friendly, and “eBay Giving.”

The site is additionally complicated by the fact that one can’t just hunt down one level of criteria that might be important to you – such as “toxin free” products (you can get an eco badge for just being hand made, toxin free is an added bonus). The system is overwhelming, confusing, and because it’s not well organized, it does not deliver the promised transparency.

Right Step: A simple solution would be to publish the producer or seller’s claims right on the product page. Rather than providing a series of badges, tell the eBay buyer the specific claims, and let us know how that claim was verified. Allow the buyer who is interested to drill down further and read the documentation of these claims, see photographs of the manufacturing process, and meet the product maker themselves. This process might even encourage all sellers to be more upfront about their entire product development cycle. A more advanced and proactive effort by World of Good and eBay would be to fund a single 3rd party certifier to develop a more comprehensive ratings system; something similar to what EPEAT has done for computers.

#3: How Did a Leaden Lipstick Get in Here?

So if you haven’t noticed I’m a suspicious green consumer, but I still had hopes for the site until I saw a lipstick from PeaceKeeper Cosmetics. This Whole Foods-marketed cosmetics brand was outed in an Environmental Working Group (EWG) report last year, A Poison Kiss, for having a high concentration of lead while also claiming to be all natural (and socially pure). Burts Bees was also listed as a culprit.

Granted, there is still vociferous debate about whether EWG and other environmental advocates are crying wolf, or whether we should really believe that no amount of lead is good for a product applied directly to one’s lips. I had my own encounter with PeaceKeeper as a consumer and writer trying to understand this issue, and never got a straight answer from the company as to whether their products were truly safe.

When I see that PeaceKeeper has been verified by Coop America for being both green and socially positive, I wonder if this third party organization knows about the EWG study, the call for FDA investigation by John Kerry, Barbara Boxer and Dianne Feinstein, and the ongoing efforts by EWG and other activists to get to the bottom of this issue. For now, I go lipstick-less, until the truth comes out. In the meantime, the existence of this product on a site claiming the highest degrees of ethical and eco choice makes me question the entire premise and offering, which is a shame.

Right Step: Eco-fatigue is caused by such confusing claims and hard-to-navigate credibility. What eco and social and good-seeking consumers need is a more holistic understanding of the things that they buy. World of Good is selling mostly non-essential gift items like jewelry, fashion, housewares, and coffee, but the eco and social benefits of each could be much more transparently communicated.

Asking all sellers to publish their claims on the site would be the first order of business. But the real opportunity may lie in connecting the community website functions of World of Good to the product and commerce aspect of the site. World of Good started out as a community of socially-minded entrepreneurs, so allow these members to review and comment on products, and invite the producers to join in on the conversation. Rather than have ethics imposed from the developed world to the developing world artisans on the site, let ethics evolve as they naturally do, as living, breathing conversations, behaviors, and expressed beliefs. Only in this way can we develop a more global and shared sense of ethical living.

Update: World of Good was acquired by Ebay in February, 2010, and was transformed into – the sustainability aisle for Ebay.