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Mercado Global – Behind the Brand

January 16, 2023

By:

Erin Schrader

Mercado Global X Liverpool Rosa Tote [pictured] / Mercado Global X Liverpool Cristina Cosmetic Zip Pouch

If you follow along over on Instagram or Facebook, you know that I recently had the privilege of visiting the beautiful country of Guatemala on a Mercado Global Insights Trip. In addition to all the comments about the beautiful country, and connections so many of Y-O-U have to it, there were quite a few questions about how Mercado Global works. Who better than to tell you, than those behind the organization? Below you’ll find some FAQs straight from Mercado Global.

How does Mercado Global work?

Mercado Global is a nonprofit that helps Indigenous women build their own businesses and break the cycle of local poverty. The organization does this through a three-pillared model that you can learn more about in the Annual Report.

Pillar 1 – International Market Access

Mercado Global connects women-run cooperatives with international retailers to allow them to earn two to three times more per day than what they could otherwise earn locally. This income allows them to send their children to school, often for the first time, and provide nutritious foods and healthcare for their families.

Pillar 2 – Community Based Education

Mercado Global also provides community based education classes in local languages to artisans involved in their programming. These classes focus on a wide range of things including, nutrition, leadership, business development, finances, entrepreneurship, amongst others. These classes provide the women with the knowledge they need to create their own local businesses and run them successfully. There is no charge to artisans for this service.

Pillar 3 – Asset development

Mercado Global’s asset development work helps to provide artisans with the tools they need to not only produce goods when they work on orders for Mercado Global, but also when they are producing goods for their own local businesses. The artisans are gifted these tools and have ownership over them. Mercado Global also has a savings incentive program to help support artisans in building their individual and group savings.

How does Mercado Global support its partner artisans?

Mercado Global considers the assistance it provides as a hand-up as opposed to a hand-out. The organization not only works to provide rural Indigenous women with work opportunities through its International Market Access program, but also prepares women with both the knowledge and tools to successfully start their own local businesses that function completely outside of their work with Mercado Global.

Through their work with Mercado Global, women become economically empowered and can make informed decisions that change outcomes for themselves and future generations.

Are Mercado Global’s partner artisan’s employees of the organization?

No – Each Mercado Global partner artisan works in a cooperative that is owned by the women who make up the cooperative. These women do not work for Mercado Global, but instead make the decision to collaborate with Mercado Global when the organization receives an order.

Does Mercado Global employ anyone from the areas in which they work?

Yes – Mercado Global employs around 20 Indigenous women at any given time in a variety of roles. Some of these women are trainers who teach in the organization’s community based-skills program or in our market access training initiatives (such as intensive sewing and weaving classes). Others hold positions on our accounting team, the team that helps artisans participate in sales opportunities, and positions as high as the director of our operations in Guatemala. The entire leadership team for our Guatemala operations is composed of indigenous women, with most coming from the same communities where we work. And the director of our operations in Guatemala actually began as an artisan before working her way up through Mercado Global’s operations, earning her high school, university and masters degree all while working full time for Mercado Global! You can see our core team here.

How do Mercado Global partner artisans earn an income?

Each product that is produced by Mercado Global partner artisans undergoes a lengthy process (please see our Journey of a Bag diagram and video). This means that no one woman or one cooperative is responsible for the creation of a singular product, instead it is a multitude of people and cooperatives spread throughout the region where Mercado Global is located.

Women earn $17 per day of work with Mercado Global. This wage was set based on what it costs to send your kids to school, provide nutritious meals, and afford health care for your family. As a point of comparison, 75% of Indigenous people in Guatemala are living on less than $2 a day. If artisans were not working with Mercado Global, their primary alternate income opportunity would be to work periodically as day laborers in the fields or on coffee plantations, where they would generally earn $6.75 per day.

In addition to these wages, partner artisans receive the education and tools necessary to start their own local businesses to increase their overall income.

Mercado Global Product Sale Revenue Breakdown

20% – 30% – Artisan Income: Artisans earn an hourly wage for their work weaving, sewing, detailing and packaging with Mercado Global. This income is received by the artisans before the sale process is completed and is not contingent on the sale of the item they worked on. Artisans earn $17 per day for 8 hours of work (see how this rate was established above).

5% – Shipping & Handling: A percentage of the sale is used to cover shipping, taxes and handling of each piece.

10% – 15% – Mercado Global Expenses*: Mercado Global uses a percentage of the sale to offset costs of bringing the product to market. This includes contributions towards the cost of Mercado Global’s production, design and sales team, and marketing costs such as tradeshows and photoshoots for each
collection.

*Mercado Global is a 501(c)3 nonprofit which undergoes annual audits to review its income. The organization’s operations are also audited by Levi’s on an annual basis.

45% – 55% – Retailer Expenses: Retailers collect a percentage of the revenue to cover the cost of selling the piece to the end consumer, including sales staff, retail space and marketing costs. This markup is industry standard and needed to ensure retailers will carry the artisans’ collections on an ongoing basis.

In the case of this collaboration, Liverpool is donating back half of its share of revenue from product sales to Mercado Global’s Community Based Education Program, which funds the business development and technical training we provide to partner artisans.

A response from Styleoflost

How is Styleoflost compensated for this collaboration?

By having the joy of working with brands we truly love and stand behind! While the experience we had in Guatemala was invaluable and one we will never forget – we were invited as guests of Liverpool, a brand we have a long standing partnership with. We were not paid for our attendance or coverage of the trip, and will be donating all commissions from our sales of the Mercado Global X Liverpool bags.

Why? Because we believe in the mission of what these organizations are doing. Plus – the bags are beautiful, well made, and we love using them!

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