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Micro-Franchise Business Model

Living Goods harnesses the power of micro-entrepreneurs to reinvent rural trade and dramatically scale access to a wide range of life-saving and life-changing products. We operate Avon-like networks of independent entrepreneurs who make modest incomes going to door-to-door selling affordable and effective solutions designed to improve the health, wealth, and productivity of the world’s poor. We utilize all the key characteristics of successful franchises: methodically screened agents, expert train¬ing, strict quality monitoring, uniform branding and product mix, effective promotions, and low cost of goods achieved through scale. Living Goods franchises its brand and business model to women entrepreneurs who work as independent agents. To launch their Living Goods franchise, agents receive a below-market inventory loan and a free “Business-in-a-Bag” that includes uniforms, signs, a locker, and basic health and business tools. Our field staff provide agents with ongoing support through refresher trainings, field mentoring, and performance monitoring.

 

Living Goods’ big win lies in creating a sustainable distribution platform for a wide spectrum of pro-poor products. Innovators in health, energy, and agriculture often fail to scale because they try to build new distribution systems solely for their one new product. In contrast, we bring these high-impact products together, creating an ‘economy of assortment’ in which the marginal cost of adding new innovations is near zero. Our broad product mix provides two other vital benefits: 1) it drives up total sales and supports financial sustainability and, 2) it enables us to cross-subsidize prices – dropping prices on key impact items while making the margin up elsewhere. Our strategy combines high-impact but low-velocity items like bed nets and clean cook stoves, with high-velocity items like soap and fortified foods that motivate agents to be out selling every day.

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