Is One for One the Right Business Model for your Company?

A group of children running wearing TOMS shoes TOMS

Increasingly being adopted as a business model by companies across the globe, the notion of 'one for one' is a direct form of social entrepreneurship.

Built upon the idea that, when one of your products is purchased, another is given away to someone in need, the model is most famously attributed to Blake Mycoskie of the American-based company TOMS. It stems from Mycoskie's experiences of seeing children in poverty while travelling in Argentina, with the company donating one pair of shoes for every purchase.

While this is an undoubtedly noble concept, one for one is still a for-profit model, though. Like any business model that current or budding entrepreneurs may be willing to adopt, it is therefore critical to consider both the pros and cons of this structure, to ensure that it will work for you, whether you're running an online business or one with a brick and mortar location.

As a guide, we've laid out some of the pros and cons that entrepreneurs looking to adopt a one for one business model should consider.

Pro: It's an excellent marketing tactic.

As you already know, there are numerous methods you can utilise to boost a brand, but the one for one business model is an entire marketing strategy in itself. The truth of the matter is that consumers love a company who gives back. When combined with a solid brand awareness strategy to get the word out regarding your initiative, you will be able to gain a tighter hold of your target market, assisting in the fulfilment of your marketing goals and taking steps toward overcoming your competition.

This is backed up by research, too. A recent study by business intelligence firm Clutch stated that trends in consumer behaviours frequently put a high value on social issues, encouraging companies to help combat these kinds of problems. Indeed, businesses that offer a solution - especially one in which consumers of their products can participate in - create a sense of unity and control amongst buyers. Not only are they acquiring the items that they wanted to purchase in the first place, but they are also making a positive impact on their planet in doing so.

Using the example of TOMS, their mission statement is a powerful one; it encourages consumers to stop and think about how they can help the brand change the world. After all, who wouldn't prefer to purchase a pair of shoes that will help someone in need, especially from a conscientious business with high moral values?

Pro: You're helping to make the world a better place.

Of course, businesses that use the one for one model have not adopted it solely for marketing purposes. While cynics may argue otherwise, they are presumably considering this method because they genuinely want to make a positive impact on the world, while still making a profit.

Such critics argue that this mission is at odds with the bottom-line goals of a profit-driven organisation, but actually, the more revenue you generate, the more you can help. For instance, loyalty marketing is often a progressive consequence of one to one, thanks to the positive emotions and feelings of social responsibility attached to the product. As a result, customers will continue to purchase from you, which, in turn, means that you can continue to help make the world a better place. With the support of regular patrons, your business model can offer the best of both worlds, and evolve into a 'gift' that truly keeps on giving.

Con: You must ensure that the product you are selling covers the costs of the donated item.

Of course, as a for-profit business, you must also ensure that the product that you are selling to consumers brings in enough money for your company to flourish financially. The entirety of your earnings cannot go to producing the second donated item.

When considering examples such as TOMS and Warby Parker (a popular North American eyewear retailer that donates a pair of glasses for every item purchased), it's important to consider that their products are made at much lower costs. They are manufactured with cheaper materials and utilise economy of scale through production volume, allowing for reduced prices when selling their products. This essentially means that they are maintaining a similar profit margin to a company that has not adopted the one for one business model; they're making a positive contribution to society and doing well financially.

With a consequential lower cost for consumers, it will become more enticing for them to buy your product rather than your competitors' - especially when you factor in the aforementioned feel-good factor of helping others. However, if the products that you offer fall into a more premium-priced category (in terms of material costs and lower demand), then perhaps the one for one model is not a suitable fit. Instead, consider donating a percentage of sales to a particular cause, or even offering a combination of percentage and product donations.

Con: It's a difficult model to implement.

As many business owners will tell you, coming up with an idea is often the easy part. Thinking of ways that we can change the world for the better and envisioning our impact is entirely natural – commendable, even.

However, implementing a world-changing idea is never straightforward; in fact, it's notoriously tricky. You will encounter numerous obstacles, such as bureaucratic red tape, identifying legitimate NGO partners, and customising donations; indeed, these issues are just the tip of the iceberg.

Therefore, you have to counterbalance idealism against practicality. Whether you are in the early stages of formulating an idea for your business, or you have a large company that is already well established, you should consult your vision statement when deciding whether it is beneficial to adopt a new commerce structure. How do you see the adoption of the one for one business model bettering not just the company's internal structure, but also the world as a whole? Are your employees on board with such a shift?

Consult your staff, allowing them to voice their opinions regarding the potential structural shift, as well as asking them what social issues should be focused on if this change were to occur. Consulting the internal stakeholders within your organisation is another crucial step, as incorporating the one for one model could potentially cause a detriment in the company's finances. This, of course, would affect the monetary gains of said investors and is something that they must be made aware of prior to the modification.

---

Though the benefits of the one for one business model can outweigh the drawbacks in many niches, the structure is not necessarily for everyone. It's vital to consider all of the pros and cons and identify it is a viable and practical option to implement. If you find that your company would benefit from the model, then you have the chance to change the world for the better and capitalise on a golden marketing opportunity. 

Therefore, it's worth considering, especially if you are a retailer of clothing, hygiene products, non-perishable foods, medical supplies (such as antiseptics, bandages, and similar items), or any other product that populations in developing nations have limited access to. In providing such items, you are not only succeeding with your own business, but you are helping to change the world for the better - one product at a time.

Should more companies adopt the one to one business model? Let us know your thoughts in the comments below.