The Economics Of A Single Moroccan Reed Basket

One of Tigmi Bag's many bags.

One of Tigmi Bag’s many bags.

By Dan

The reed of each bag is meticulously collected by hand from a near by river. The artisans weave the reed strands together with palm rope on a horizontal loom to create panels of reed. The bag takes its final shape when the families sew the reed panels together and attach handles made of genuine leather. The process takes hours of skilled work. It is no easy task.

With the amount of work it takes to create one of the bags, it might be a surprise to learn that the families of Tigmi Bags make a whopping $0.24 in profit for each bag they create.

Yeah, that’s right. The material costs for one bag is around 10 Dh, or $1.16 US. The artisans then sell their work to Moroccan resellers in a near by city for 12 Dh, or $1.40 US. The artisans, for obvious reasons, prefer to sell their product in huge quantities — it’s the only way they can make a living from the products they create.

The resellers in near by cities willingly buy in such huge quantities because the products are immensely popular and profitable. Take a short walk through any souq in Morocco and you’ll find these baskets for sale starting around 200dh ($23 US). The families of Tigmi Bags keep about 6% of the selling price. It is not hard to see why artisans remain so poor even when their products proliferate across the country.

Limitations Of Current Fair-Trade Models

It is this environment that has given rise to fair-trade, a movement focused on ensuring artisans are paid a fair-wage for their work. But even this movement has its limitations.

In the case of Tigmi Bags, fair-trade organizations pay around $4 US for a bag at

wholesale costs. While that is a substantially larger sum than traditional middlemen, it is not uncommon to find the same bag for sale for $50 on socially focused e-commerce sites. Again, the end result isn’t much different than working with traditional middlemen as Tigmi Bag families keep around 8% of the final selling price.

The fact that artisans make a fraction of the final sale price isn’t always because resellers and organizations are exploitive; it is just that the sellers have their costs to cover, too.

But that’s where the actual problem starts to emerge. The value chain that connects the families of Tigmi Bags to their customer both domestically and internationally is long and at best convoluted. The average international value chain for artisans like Tigmi Bags runs five links deep. And according to flagship fair-trade organizations, it is acceptable for each chain to add a percentage of varying costs to each product as shown on the right.

After reviewing hundreds of e-mails that are sent to artisans in Morocco from their fair-trade partners, it was common to find e-mails filled with complaints anytime an artisan tried to raise their prices. The e-mails frequently accuse artisans of being ‘unloyal’ or ‘unprofessional’ when artisans were simply trying to price what they thought was fair compensation for themselves.

The e-mails were hardly surprising. With so many links in the value chain and a hard price ceiling customers are unable to exceed, there is continuous tension as to where the ultimate value of the product stays. And because artisans like the families of Tigmi Bags have little leverage, they get stuck with the smallest percentage at 8% of the selling price.

Eliminating The Value Chain

Anou changes the very structure of the value chain that separates you and Moroccan artisans. With Anou, artisans finally have the ability to directly connect with their customers, select their own prices and gain valuable skills in the process. Anou’s mobile platform fosters transparency and ensures that the artisan who made the product is paid the price they selected. And better yet, each product is labeled with the picture and story of the artisan who made it. Quite a bit better than a opaque network of wholesalers selling to other wholesalers and then to retailers. Buying through Anou keeps things simple, where the ‘value-chain’ consists of you and the artisan.

There is no better way to explain the impact that Anou has than how Tigmi Bags sells their products.  With Anou, the families of Tigmi Bags sell their work at their ideal price of 100 Dh ( $12 US), nearly three times as much as the fair-trade price they were once paid, and even with direct shipping from their rural village in Morocco included in the price and the addition of Anou’s selling fee of 15%, their prices are equal to or cheaper than typical fair-trade prices.

After a quick search for Tigmi Bag’s items online, I was able to find one of their products for sale by another merchant. The following two screen shots sum up the difference between Anou and other options quite nicely; which would you rather purchase?

____

Handwoven Moroccan Straw Wine Holder for sale by Traders and Company
$36.50 US Including Shipping

Wine Basket From Essaouira for sale by Tigmi Bags

$35.00 US Including Shipping

It is a pretty easy decision, if you ask me.

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