Established in 2015, dna merch is an unconventional eco-fair clothing brand specialized in custom printed t-shirts and other promotional garments for b2b customers. We also offer a collection of classic blank and various slogan shirts via our b2c online shop and selected retailers.

At the heart of our supply partner chain is a sewers cooperative from Croatia. With a fixed percentage of our net sales we support garment workers in South Asia in their fights for better working and living conditions. This way, we want to create a positive impact for both workers in the alternative and in the mainstream economy.[1]

After two successful crowdfunding campaigns[2] and almost three years of business experience, we are now planning to take the next step by developing an innovative web platform which ultimately shall be collectively owned and governed by every party involved in the value chain; from the producers of the raw material all the way to the people who buy the clothes.

From platform capitalism to platform cooperativism

Never was it more obvious than today that capitalism fails to deliver on its promise of benefiting the many and not just the few. By grabbing after the internet, capitalism has given birth to business platforms that increase inequality, undermine democracy and lead to monopolies. The likes of Airbnb, Uber, Amazon and facebook are transforming our workplaces, relationships and societies and we have virtually no control over them. While nearly all aspects of our lives are being shifted online, a new and fairer model for the digital economy is needed. A promising model in that regard is co-ownership, transparency and democratic governance as promoted by an emerging number of so-called platform cooperatives. Contrary to venture capital funded platforms and their systemic flaw having to excessively extract and maximize value only for their shareholders, platform coops seek ways of including everybody who is affected by the platform’s activities in the equation.[3]

Applying the platform coop model to the buyer driven and undemocratic garment industry

How the industry works

Global fashion online sales are expected to grow massively from €415 billion in 2018 to €615 billion in 2022.[4] Approximately 75 million people are employed in the textile, clothing and footwear sector worldwide. Most of them are women. The industry is buyer driven which means that corporate giants such as H&M, Inditex, Primark or Kik usually do not own any of the factories they produce with, yet they basically control them. Their buying power lets them dictate where to produce, what to produce and at what prices. This, together with the rise of fast fashion, a business practice where the brands change their collections in very short time frames, puts enormous pressure on farmers, factory owners and workers. Supply chain transparency is another big issue.

Ways to gain power for workers

One way for workers to turn their often poor labour conditions into good or at least better conditions, has always been by organizing in independent labour unions and subsequently force the employers to negotiate collective agreements. However, this is easier said than done because anti-union practices are widespread in the global garment industry. Even though fundamental rights to join a union and bargain collectively are guaranteed in the big brands’ code of conducts and through various certification schemes, reality on the ground often looks very different.[5] Hence, the percentage of unionised garment workers in today’s main producing countries is very low.

Another way for workers to gain collective power and a higher level of self-determination is by organizing into worker cooperatives. Here, the workers collectively share the ownership of their workplace. Consequently, their work benefits themselves and their local communities rather than just filling the pockets of external shareholders, bosses or factory owners. However, there are currently just very few garment factories operating as a worker cooperative. In the first step of the value chain though, there is already a considerable amount of smallholder cotton farmers who are organized in cooperatives, primarily because together it is easier for them to sell their product and it also allows them to reach a higher price.[6]

Revolutionizing our garment value chain by becoming a platform coop

As of today, our immediate supply chain consists of three main partners. We buy 100 percent organic cotton for our fabric via Fair&Organic from India. The Social Cooperative Humana Nova receives these fabrics and sews them into t-shirts. Printex finishes these shirts with screen prints using water based eco-colours. Counting in the employees of the small manufacturers Fair&Organic works with, the combined number of people working for these three partners is likely to be around 50 to 60. It is safe to say that at least half of them in one way or another work for us during the realisation of a certain project. We should of course not forget all the additional people involved in logistics and transportation as well as in the raw material production. The products offered on our platform/website are only possible through the combined efforts of farmers, mill workers, fabric cutters, patternmakers, sewers, truck drivers, just to scratch the surface.

Now, imagine if all these hard working people were to become co-owners of the dna merch platform.

The co-ownership model would not only allow them to raise their voices concerning issues that affect them (e.g. delivery times, labour costs/wages and working hours), it would also make them eligible to a share of the surplus revenues generated by the platform.

And now try to imagine if all the other people in the value chain will become co-owners as well, those who will be using the platform to buy t-shirts and other garments either for their own use or to source and retail. If implemented properly in a truly inclusive way, this will lead to a fully democratised value chain in which both consumers and producers are empowered likewise. The technology for them to finally meet on eye-level and practice solidarity through direct interaction and trade is available. With the dna merch platform we want to put it in practice.

But why would it be so empowering to facilitate that sort of direct interaction between consumers and workers/producers? Two popular beliefs in today’s mainstream sustainability debate are that a) consumers have the power to make globalization fair and sustainable by shopping ethically and consciously, and b) that companies, to build trust in consumers, should certify their supply chains and guarantee universal standards through the means of independent audits.

While there is absolutely no doubt that our day-to-day shopping decisions matter and can drive companies to adjust and change their policies in a progressive way, it is way too easy to put all the responsibility in the end consumer’s pocket. We think it is hardly possible to always filter all products according to their social and ecological footprint and always make a conscious and ethical decision without going crazy, especially when the majority of products are known to be produced under poor conditions. What’s most important though, is that an approach which solely relies on the consumer power tends to treat workers in the global south as passive subjects who depend on our goodwill and help. Hence, it hinders us from seeing them as people just like us and makes it harder to create relations on eye level.

Audits are problematic, too. The vast majority of them has proven to be merely a paperwork exercise and does not lead to sustainable improvements of working conditions. A study from 2016 titled “Ethical Audits and the Supply Chains of Global Corporations” concludes that audits “are ineffective tools for detecting, reporting, or correcting environmental and labour problems in supply chains [and] they reinforce existing business models and preserve the global production status quo.” As with the consumer power argument, the biggest problem with audits is the passive position that the workers are put in.

We believe that it is the people themselves who know best what needs to be improved at their workplace or their favourite product. So, equipping people with the right tools to connect directly with each other, and putting them in a position where they no longer depend on powerful and manipulating intermediaries like most of today’s corporations are, they will figure out ways that benefit all those involved. With the dna merch platform coop we are determined to set out and prove it.

Lean proof of concept: Focussing on our status-quo

With our platform we want to address three dominant problems of the garment industry, i.e. lack of fairness and democracy, non-transparent prices and supply chains that hinder buyers from making informed decisions, and the fact that there is currently no easy way for workers and consumers to directly connect with each other.

To get things going we will make use of what we already have, a transparent supply chain for t-shirts with a self-organised sewers cooperative at the core, our existing website with a lot of transparent information and a network of customers comprising of trade unions, music bands, retail shops and crowdfunding supporters. We have various functionalities planned for the platform and will add and test them step by step along the way. First, we will add options to start one’s own crowdfunding campaigns and group orders. The idea is to make it possible for bands, organizations and individuals to initiate t-shirt pre-order campaigns to collectively pre-finance the production costs. If wished, users can add a margin on top of the costs to raise money via a public campaign.

Over time, we want to extend the product portfolio and offer not just customized printing on standardized garments but also enable e.g. young fashion designers to realize their first collection through the platform.

In terms of our organizational restructuring process from a German civil law partnership towards a platform coop with a legal structure yet to define, we aim to have an established organisation by mid of 2019 with at least 5 co-owners each from our producer part and the consumer/retailer part of our value chain (e.g. 3 workers from the sewers cooperative, 2 from the print shop, 1 band, 2 crowdfunding supporters, 1 fashion designer, 1 graphic designer)

Our biggest challenges and questions

  1.  How exactly could a membership and governance structure look like in practice?
  2.  How can we convince our stakeholders to embrace the undertaking of becoming a platform coop?
  3.  What are the arguments and incentives that are valid for everybody?
  4.  Which ones differ between the various actors?
  5.  How will we ensure real participation of the coop members?
  6.  Which tools and forms of communication will we need?
  7.  How exactly will the business model look like?
  8.  Transaction fees, membership fees …
  9.  Coop shares
  10.  Sales of own collections
  11.  Consulting services for onboarding further producer partners
  12.  Commission fees for fashion designers who win contracts through the platform from other users?
  13.  How exactly can we make use of the Blockchain technology and other recent inventions that foster decentralisation?
  14.  Which tools are readily available that we can make use of?
  15.  Which impact on membership will the power imbalance in our supply chain most likely have, e.g. the fact that other than the     sewers cooperative all other partners are conventionally structured businesses?
  16.  Should co-ownership of the platform become a prerequisite for being able to access all services and functionalities of the platform?

Call to action

We need and want more people to get involved in this!

Please get in touch by briefly mentioning what aspect interests you the most and where your expertise lies. We definitely need people with a technical background, people with experience working in coops, people with knowledge of the garment industry, social media and marketing experts, organizational theorists and probably a lot more that we cannot think of right now : )

Also, please feel free to reach out if you just want to comment on the idea as such or on one of the questions and challenges mentioned above or if you would like to add another one.

We are grateful for every input and consideration that you share with us!

You can best reach us via email or you can directly comment on the document here.

Doreen & Anton

 


[1]

[2] See https://www.startnext.com/dnamerch and https://www.startnext.com/dna-merch-vol-2

[3] For more info visit https://platform.coop

[4] See https://www.shopify.com/enterprise/ecommerce-fashion-industry

[5] See e.g. http://speri.dept.shef.ac.uk/wp-content/uploads/2016/01/Global-Brief-1-Ethical-Audits-and-the-Supply-Chains-of-Global-Corporations.pdf

[6] See e.g. https://www.ica.coop/en/media/news/small-scale-farmers-achieve-a-26-higher-share-of-consumer-price-when-organized-in

 

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