We can do this for a variety of specific reasons, but broadly it is because Equal Exchange is a self-sustaining but not a wealth-accumulating enterprise.
For example, the coffee industry tends to enjoy large profit margins. So much so that Equal Exchange can pay farmers substantially higher prices, maintain competitive prices and still earn a small profit.
- By cutting out intermediaries we remove their normal profit margins from our cost;
- We have no high executive salaries to support;
- Our outside investors and creditors share our philosophy, value our work, and provide us with “patient”, low cost equity and financing. We call this “fair trade capital” ;
- Strong word-of-mouth endorsements compensate for our limited funds for sales or advertising.