Artisan Owned Direct Distribution Model
Country: Mexico
Organization: Artcamp SC de RL "Artesanas Campesinas"
2) Sector of activity: Technology Cottage Industry Production
3) Description of your products or services: Unfortunately, artisans and other producers are at the bottom of today's economic structure. The producers typically sell their products to local dealers, who consolidate and sell them to international importer distributors, who place the items in commerce through a variety of channels. The artisans themselves are utterly deprived of the opportunity to share any portion of the market value of their products. AODDM rectifies this. Through the AODDM system, the producer is equipped to sell near the end of the sales chain, whether to retail stores, to jewelry lovers, or to school and church groups raising funds by selling quality artistry to friends and membership. AODDM is the product of Artcampıs struggle to directly penetrate the market and it is working. Specially developed cost-accounting software accumulates the production costs and converts the product prices according to formulas set by artisan administrator. The AODDM Shopping Cart generates for the producer an automated cost-based pricing that is flexibly delivered by internet to customers and prospects via code hyperlinks. The Artisan-Owned Direct Distribution Model (AODDM) has been expressly created and developed to empower artisans to deliver their products to retailers world-wide. The beneficiaries are the retailers, and the artisans themselves, and their families. AODDM is a comprehensive integrated operating system empowering producer-owned enterprises to obtain economic justice and benefit.
4) Description of the operational model: The AODDM is readily replicated and applied by other artisan groups. Internet orders are shipped by producers directly to retailers. The Artisan-Owned Direct Distribution Model allows retailers to acquire in-time product for resale, delivered to their door clear-customs in 1 day (USA) & 2 days (EU). Producer-Retailer communication is by means of dynamic html pages. AODDM incorporates unique AODDM Shopping Cart software. The implementation of Artisan-Owned Direct Distribution Model means that the Producer Group is leaping over the wholesalers to sell directly to the Retailers. An AODDM portal leads prospects to the artisan catalogs. The following items are ways in which the AODDM is made available to Producer Groups: 1) Artcamp and subsequently other successful operations provide model(s) for others 2) AODDM techniques are made available to other Artisans by means of the AODDM Shopping Cart, also an on-line graphic dynamic Userıs Manual, FAQ, Help Desk, etc 3) Producer Groups receive the benefits of cooperative Internet advertising via the AODDM portal. Costs of reproducing the model continue to be paid by Artcamp as a public service in solidarity with other craftspeople As more profitable AODDM producer groups emerge from this process, they will join with Artcamp in underwriting the further dissemination of AODDM technology and technique. AODDM means profits from production, production is expected to generate a reliable income stream to sustain this AODDM Initiative.
5) Description of the financial model: Social Enterprise Financial Instrument (SEFI) is a unique financial instrument enabling village-based Producer Groups to use the AODDM to leap over layers of middle-men. To be able to employ the AODDM Shopping Cart and the Artisan-Owned Direct Distribution Model system, the artisan group must have access to its own products in the form of stock inventory. This is where the Social Enterprise Financial Instrument comes in ı a SEFI is the way in which a producer group can be capitalized, in such a way that the own-inventory stock of the producer group comes into existence. SEFI proceeds are strictly committed to the acquisition of inventory for immediate delivery. It is known that there are persons in search of opportunities to assist emerging worker-owned enterprises in the struggle to achieve a self-sustaining economic opportunity. The loan is structured to be paid back in full in five years, at a negotiated rate of annual interest. The SEFI is unique in its structure. Its significance is much more than an advance of strategic capital. It memorializes common objectives shared by the investor and the producers to advance models of self-sustaining economic growth and collaboration.
Client fees represent this approximate percentage of operational budget: 0%
6) Key operational partnership: Artisan Sustainable Assistance Partnerships (ASAP) is a private-public economic development initiative built around artisans. Pilot-project: medical equipment donation to the Adolfo Prieto Public Hospital in Taxco, 2002-2003 The principles of ASAP follow: 1) The Producer Group brokers the donation 2) The Producer Group volunteers staff time, communications costs etc. out of its Cash Flow 3) The Producer Group coordinates with state, municipal, or village governmental agencies in order to channel benefits to Producers communities 4) The Producer group may enter into a ParaMunicipal enterprise with the local government. ASAP is a private-public partnership between a village producer group and an agency of the local government is one the neatly replaces the idea of a third-party agency that is an intermediary in international assistance. This means that the donation does not get spent on overhead and office! Contadoras Campesinas accountant-trainees keep the books and publish reports on the Internet. ASAP is NOT for funding AODDM, the AODDM is to be funded by the artisans themselves. ASAP is for donating medical equipment to the public hospital, village water projects, etc.
7) Current outreach:
We are at the Scaling Up stage. Artcamp, ıArtesanas Campesinası of Tecalpulco Mexico is an established jewelry production enterprise with installed original-model-making and mold-making capability and it has always derived 100% of its income from sales of its products, and not from other sources. Artcamp as the pilot-project of the AODDM is still inventing and experimenting with the tools and methods. AODDM is presently producing results for Artcamp and demonstrating its effectiveness. There is NO way to fake success in the real world today; other village artisans in Mexico are impoverished, or have left and gone to work illegally in the United States. Artcamp has never depended upon the financial assistance of an NGO; the survival and eventual success of Artcamp are intended to provide a proof of principle for the AODDM model. The stage of the initiative in which we find ourselves is the moment before breakthrough.
How many clients have benefited from your product/service in total? Over the last year? Over the past year, 12 families have supported themselves by means of the Artcamp production operations. Gross sales averaged $128,000usd the past few years; out of that has to be deducted the cost of materials, and the cost of general business overhead, etc. Each family making 3000usd$ to 5000usd$ annually, which is very little in today's Mexican economy where everything costs as much as in the United States. AODDM has not played a major factor yet, however. Artcamp has been selling to the distributors, but not directly to the retailers. So, we find ourselves at the starting point for the proof of the Artisan Owned Direct Distribution Model.
What percentage of your clients is below the poverty line ($2 per day)? 0% All of our clients (the artisans) would be below $2/day if
they did not have an opportunity to produce handcraft
jewelry for sale to the export markets.
What is the order of magnitude of the potential demand for your products or services? Which
other low-income groups, countries or regions could benefit from it? Try to quantify (number
of clients, market size in currency):
Artcamp's experience in the application of AODDM is expressly dedicated to the benefit of village worker-owner groups everywhere. Artisan Direct marketing with AODDM, will eventually be measured in large numbers of employments ı the artisan families benefit, yet without increasing the price of goods, rather by expanding markets through attractive pricing attributable to elimination of intervening layers of wholesalers. AODDM is applicable and powerfully useful to EVERY village the produces ANYTHING that can generate income through direct sales to retailers near the end of the sales chain. EVERY village located EVERYWHERE - that is where AODDM will flourish.
8) Scale-up strategy:
How many low-income individuals do you plan to benefit in three years from now? How are you planning to scale up or replicate your solution? What are the major constraints to scale up?
Artcamp will continue to underwrite the reproduction of the AODDM method by other village-based producer communities in the form of an AODDM Shopping Cart Userıs Manual and a Help Desk, a Frequently Asked Questions interface and cooperative internet advertising. 2. As AODDM continues to enlarge markets and income, Artcamp, and other successful artisans, will underwrite the cost of providing AODDM tools and training to every worker-owned artisan enterprise. Artcampıs sister community in Peru via Nabuur.com of Holland is Cochiraya-Puno, producers of beautiful alpaca wool items are already using the AODDM Shopping Cart. Once the AODDM is fully implemented, the positive effect of profitability is enough to recommend the AODDM to every village-based Producer Group. Anticipated value of gross AODDM sales: 2006 = 500,000usd$, 2007 = 2,000,000usd$
Which specific areas - and why - in your field would benefit most from investment by corporations, foundations, and other investors:
1) identify a producer group you want to work with, and back that group by negotiating a Social Enterprise Financial Instruments (SEFI) arrangement with them, to finance the acquisition of their own-inventory, thus qualifying the artisan group to use the AODDM Shopping Cart and to participate in cooperative Artisan-Owned Direct Distribution portal and internet advertising. 2. sponsor or otherwise support the AODDM Initiative. The AODDM Initiative supplies the web-hosting, the userıs manual and training, the server-based software, the sales letter templates, the volunteerıs on-line forum, etc. Frequently-Asked-Questions module, Help Desk and periodic informative newsletter about the AODDM directed to the participating Producer Groups. 3) become a benefactor donor to the local community via your favorite artisan group by means of the Artisan Sponsored Assistance Partnerships.
9) The organization: How does the initiative fit with your overall organization's strategic goals and priorities? How did the initiative start?
The AODDM Initiative is conceived from the Producersı point of view. The reason AODDM exists is as a result of decades of frustration as village cottage industry craftspeople, As the market conditions have become ever harder for producers, we have sought for and applied a solution to our own dilemma as artisan community of Tecalpulco, Mıxico. Artcampıs solution required inventing an effective interface with the retailers by using sophisticated internet tools and international package delivery. AODDM producers are expected to be profitable in their business of producing and marketing to retailers. There is simply no point in muddying the AODDM with licensing. Therefore, the artisans of Artcamp bring forward the AODDM on principle of humanitarian solidarity with other handcraft producers in these difficult times.
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10) On the mosaic diagram, which of these factors is the primary focus of your work?
- Factor: Poor understanding of the human and social capital
- Principle: Change radically the logic behind your business mo
Contact Information:
Name: Angelica Maria Moreno Dominguez - Socia Administradora de Artcamp
Organization: Artcamp SC de RL "Artesanas Campesinas"
Mailing address: Apdo 254 Taxco 40200, Guerrero
Country: Mexico
Email: maria@artcamp.com.mx
Tel: 011 52 762 62 20834
Fax: 253 660 4114
Website: www.artcamp.com.mx
Organization's legal status: artisans cooperative
Number of Employees: 7
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