In a recent interview, TOMS founder Blake Mycoskie proclaimed, "From this day forward, TOMS will no longer just be a shoe company, it will be a One-for-One company."
For those unfamiliar, TOMS shoes operates under a simple principle, for every pair of shoes you or I purchase, a pair will be given to a child in need. And with the success the company has seen, TOMS is now expanding into the world of eyewear, and attempting to prove that the 1-for-1 model can lead to both a profitable and philanthropic business.
Now the concept of giving away money or good to a charity with a purchase isn't a new one, almost every big brand does this in some shape or form, but the major difference with TOMS is the ratio of profit that it gives away. Instead of looking at the situation as, "how much are we willing to cut into our margins?" TOMS sees the slim profit as an opportunity to grow its business through by catering to the giving-spirit of its customers. So by essentially doing all the work for us when it comes to charity, one has to wonder, with enough volume could a business like TOMS outpace the profits of a less generous competitor?
Society has gotten used to being able to help without having to put forth a great deal of time or effort. The internet has made it so easy for people to participate and do good, often because it doesn't require more of an investment than a few mouse clicks. TOMS is recreating that simplicity for philanthropy and taking it into a "real-life" scenario. Specifically, buying something you need anyways, results in a REALLY good deed that you personally don't even need to execute on.
Not only does the buy-one-give-one model make it easy to help those in need getting something good, it also gives you a badge of honor you can wear that let's people know it. Now there are certainly those out there that buy these kinds of goods more as fashion statements (think about the Prius, Livestrong Bracelets, etc.). But even the most self-serving person wearing a pair of TOMS products is helping kids around the world, even if that's not even remotely important to them. And for the rest, their BOGO products are providing a subtle symbol of our support for a cause.
It's obvious that TOMS is planning on expanding its offering into other tangible goods, and based on its current sales, it looks like they've got a very healthy path for the future of the company, and for helping the children of the world. How fast and far can a business model of effortless benevolence take them, and will their bigger and more well-known competitors try to copy them soon? And in the end, if TOMS model does force the hands of other brands, will this hurt the overall benefit of this business practice for the people it's looking to help, or offer them even more hope?
By Len Kendall
Illustration by Rachel Marshall
The TOMS model doesn’t work if you just throw money at it, or rely on distribution channels or a big advertising campaign. In fact, my guess is that Blake Mycoskie, the guy behind TOMS, had none of those things. Has he succeeded in spite of those ‘handicaps’ or has he succeeded ...