Southwestern Company
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| Southwestern Company | |
|---|---|
| Image:Southwestern-Logo-Seal.jpg | |
| Type | Private |
| Founded | 1855 |
| Founder | Rev. J.R. Graves |
| Headquarters | Nashville, TN, USA |
| Key people | Dan Moore, President Henry Bedford, SW-GA CEO Spencer Hayes, Chairman of The Board |
| Industry | Direct Sales |
| Slogan | Building Character in Young People Since 1868 |
| Website | www.southwestern.com |
Southwestern Company recruits college students to sell educational reference books and children's books door-to-door. Students participating in the Southwestern program are independent contractors, not employees of the company, purchasing books at wholesale from the company and selling them direct to private families at retail.
Student dealers typically live with a private host family in their sales area, sharing the cost of accommodations with two or three other dealers. The "most successful" students, as defined by the company, work 72+ hours per week throughout the summer. According to the company, in 2006 the average first-time sales program participant made a gross (before expenses) profit of $7944 over a three-month summer.
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[edit] History
Southwestern Company, founded in 1855, is located in Nashville, Tennessee. The company's name was chosen because at that time Nashville was in the Southwestern part of the United States. The company was founded by Reverend James R. Graves, a Baptist minister.[1] In 1867, Nashville fell to Union forces and Graves moved the company to Memphis, Tennessee. After the Civil War ended, Southwestern returned to Nashville and initiated programs of young people selling bibles and other books door-to-door.[2]
In 1959, Spencer Hays, a young student at Texas Christian University, entered Southwestern's Summer Sales Program and would come to play a pivotal role in its future, becoming its president in 1973. In 1969, Southwestern was sold to the Times-Mirror Company. Jerry Heffel became the company's president in 1980. In 1982, Hays, Heffel and other Southwestern executives organized to purchase the company by leveraged buyout from Times-Mirror, forming Southwestern-Great American, Inc. Hays was named executive chairman of the board, a position he still holds, and Ralph Mosley was named chairman and CEO. The company remains privately held.[1]
In the 70s, Southwestern started to expand its operations, starting with Great American Opportunities (fundraising for schools) in 1975 and then acquiring FRP, an award-winning cookbook publishing company, in 1978. In 1982, after gaining its independence, SBR (International Headhunting) was formed, followed by Family Heritage (supplemental insurance) in 1989.
Since 1999, Southwestern-Great American has partnered with, acquired or establish 10 other companies around the world, for a total of 16 companies within the corporate family. These companies' services range from non-profit fundraising to public speaking to consulting to financial services to insurance and real estate. Since regaining independence in 1982, Southwestern-Great American revenues have grown from $24 million to more than $280 million in wholesale sales.
In 2006, Ralph Mosley retired as CEO after nearly 25 years. He was succeeded by Henry Bedford.
In 2007, Jerry Heffel retired as President of the company. He was succeeded by Dan Moore.
[edit] Summer Work Program
Southwestern's summer work program, started in 1868, is the backbone of the Southwestern / Great American Corporation. In 1986, Southwestern ventured into the international market by opening up the Canadian division. Southwestern UK Ltd. was established in 1994 in Bristol, England. Southwestern now works with approximately 3000 students from 400 campuses in 57 countries each year. Students who participate in the program represent colleges and universities from the United States, Canada, Europe, South Africa, and South America.
Students participating in the Southwestern program are independent contractors, not employees, and as such run their own businesses during the summer months. The money that they earn is solely determined by their sales revenue and their expenses including the cost of goods sold. Southwestern Training School is provided, in Nashville or the UK, nominally free to student dealers. However, the students are responsible for the cost of their transportation and accommodation (i.e. housing, food, etc.) to and from training school.
Being independent contractors, the participants are not guaranteed any wages and are not given any health insurance. The independent contractor model affords Southwestern two advantages. First Southwestern's financial risk is limited. Secondly, if one of the students breaks the law or is put in danger while on the job, they are responsible for their own actions because he/she is an independent contractor.
The most successful student dealers work 72+ hours per week throughout the summer, and make 30 or more presentations each day of the six-day workweek. Hours apply to time actually spent in the field and do not include time spent on bookkeeping, talking to student managers or at sales meetings on Sunday. At the end of the summer, products sold are shipped by freight line to the student dealers, who re-visit each home where they made a sale, delivering the product and showing customers how to use it.
Students entering the program may not be fully aware of the difficulties they would face, but attend a week long sales school in an attempt to prepare them.
Some student salespeople are invited to return in subsequent years as student managers. Student managers recruit their own teams during the school year and earn a percentage commission on the sales of their team.
[edit] Products
Southwestern markets family-orientated reference books and software. The lead products (The Volume Library and Student Handbook) are educational reference books to help families with school work. Also in the product line are children's books (My Fun With Words dictionary, Explore & Learn children's encyclopedia) and software (titles include Clifford Reading, Sponge Bob Typing, math and science programs to help with different grade levels, College Prep including SAT and ACT practice). Customers have an option of receiving annuals to go with their Volume Library or Student Handbooks, and also the option for a book every other month.
[edit] Controversy
Controversy around the operations of the Southwestern company center around its recruiting practices and the financial risk to students whose profits from sales do not substantially cover their expenses. During both the recruiting process and the actual sales school, students are told that the position is an internship and there is potential for college credit. Because students are independent contractors Southwestern expects students to fully finance their entire experience, even attendance to sales school and weekly meetings. Foreign students in particular carry a major financial burden, as they must pay for their visas and airfare themselves.
There has also been concern about the safety of participants – students find accommodation by knocking on doors and asking around for rooms to stay in.[3] There are no company procedures in place for vetting their prospective landlords or the safety of the neighborhoods where they live much less any company recommendations from willing boarders. In the event the student is unable to find accommodations, student managers in the organization that have worked previous summers come to help find a place for them to stay.
It is uncommon for students to have run-ins with local law enforcement. Local permits are reviewed prior to the summer by the company in order to legally sell products. Permit information is given to the student prior to working by research analysts. Southwestern offers assistance in the event of permit issues. Students are encouraged to leave their cellphones at home to focus on the task at hand, but it is not required.
In the UK on the University of Durham's campus, the students' union had voted to ban Southwestern as a result of improper business actions.[4] According to a report from a Southwestern representative, this ban had been lifted, but according to the referenced DSU Union Policy[5] it is still in force.
The Guild of Students at the University of Birmingham passed a motion in May 2006 banning the company from its premises and encouraging the University to do the same.[6]
Students at the University of Warwick have also been warned that the actions of the Company's recruitment drive on process is not sanctioned by the University itself and that students should exercise caution due to the company's actions both in recruitment and concerns regarding the nature of the work.
[edit] Newspaper & Magazine Articles
Full Articles
- USA Today - July 19, 2006
- Univ. of Rhode Island Paper - February 6, 2004
- Job Postings Magazine - October 2003
- The Guardian (UK) - August 1, 2000
- Sales & Marketing Management - September 1, 1994
- WMTV News – April 2007
Partial Articles (membership required for complete article)
- The Weekly Standard - September 2, 2006
- The Tennessean - 6 Articles from 2002-2006
- The Arizona Daily Star - July 18, 2000
[edit] Affiliations
International Sites:
Southwestern is a member of
[edit] References
- ^ a b Southwestern Company Timeline
- ^ Tennessee Encyclopedia of History and Culture - The Southwestern Company
- ^ The Practice of Marketing Management - chapter on Southwestern Company
- ^ Durham21 - A warning to us all
- ^ Durham Students' Union - Policy - Southwestern Books
- ^ University of Birmingham - Guild Council Motion - Southwestern on our Campus
