Southwestern Advantage

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Southwestern Advantage
Private
Industry Conglomerate
Founded 1855
Founder Rev. J. R. Graves
Headquarters Nashville, Tennessee, United States
Key people

Henry Bedford, Chairman and CEO of Southwestern

Spencer Hays, Chairman of The Executive Committee
Website www.southwestern.com

Southwestern Advantage, formerly known as Southwestern Company, is a multi-level marketing company that recruits and trains college and university students to sell educational books, software, and website subscriptions door-to-door using direct selling methods. Students participating in the program are independent contractors, not employees of the company, selling the products directly to private families at retail for delivery at the end of the season.


Program[edit]

Every year, the company recruits a few thousand American and a few hundred European university students to work as independent contractors who sell educational books, software, and subscription websites during the summer months.[1]

The company operates on a structured multi-level marketing platform where student dealers participating in the program are independent contractors, not employees. The money they earn is solely determined by their sales revenue minus their expenses and the cost of goods sold. They do not receive wages or employee benefits,[1] and the program does not offer any guaranteed pay.[2]

Students provide the company a letter of credit signed by two endorsers, typically the student's parents, in which the endorsers agree to be responsible for up to $500 each if the student fails to pay any money owed to the company at the end of the summer. This endorsement allows the company to ship startup books and sales materials to the student without requiring payment in advance.[1][3]

Students entering the program attend a week-long Southwestern Advantage Sales School in Nashville, where they learn the product line, how to make customer presentations, and the company's requirements for running a book business.[4] Students are responsible for the cost of travel to and from training, and for their personal expenses (food, gas, and $100 for company-subsidized lodging). The company does not otherwise charge for training or the product sample kit.[5]

At the conclusion of the training program, students are assigned to a sales area outside their home or school states. Sales areas are predominantly suburban or rural. Dealers are advised what they should be selling, and to obtain solicitor's permits where one is required. Permit fees are a business expense paid by the student, with the company reimbursing 50% of permit fees.[6]

Working conditions and income[edit]

Students typically have a host family in their sales area set up, while on some occasion have to go door to door, sharing expense one to three other students of the same gender. Host families are found in the same way the products are sold, by knocking on doors and asking people for referrals to families interested in hosting for the summer. Students pay rent weekly and provide their own meals. Housing is not guaranteed by the company.[1][7]

Dealers report working 72 or more hours per week, Monday through Saturday, typically from 8 a.m. to 9 p.m., making 30 or more presentations each day. The hours worked apply to time actually spent in the field and do not include time spent on bookkeeping, talking to managers or at sales meetings held each Sunday.[1] According to the company, in 2010 the average first-year dealer who stayed with the program for over 20 days grossed $2,415 per month before expenses,[8] which usually range from $1,500 to $3,000.[1] As independent contractors, dealers pay their own travel and living expenses, which are tax-deductible. Dealers must pay an additional 7.65 percent in Social Security and Medicare taxes to match the percentage normally paid to these agencies by an employer.

At the end of the summer, products are shipped to the dealers, who revisit each home where they made a sale to deliver the product and collect any balance due. Dealers generally pay their living expenses out of the down payments they collect, remitting the rest to the company to cover wholesale costs. Dealers return to headquarters in Nashville, where they settle accounts and receive a check for the season's earnings.[1] Some dealers are invited to return in subsequent years as managers, who recruit their own teams during the school year and earn a percentage commission on the sales of their team, as in multi-level marketing.

Some experienced dealers say the program provided them needed funds, boosted their confidence, and taught them to stick with a project despite adversity, though the president of Southwestern Advantage admits that selling books door-to-door is "incredibly hard, frustrating work" and not for everyone.[9]

Products[edit]

Southwestern Advantage publishes and markets educational books, software, and subscription websites. The main product, Southwestern Advantage, is a series of educational reference books targeted to school-age children. The product line also includes software, college prep material, and others.

Criticism[edit]

Criticism about the operations of Southwestern Advantage revolves around its recruiting practices and the financial risk to students whose profits from sales do not substantially cover their expenses.

According to the anti-human trafficking charity Polaris, organizations often send their recruiters to target unemployed young people and college students with promises of high profits. These companies only hire employees as independent contractors to avoid following the Fair Labor Standards Act's mandates for minimum wage or overtime pay.[10] Because students hired by Southwestern Advantage are independent contractors, they are expected to fully finance their living expenses, food, gas, and rent, even when on company trips. In addition, expenses of the required Sunday meetings with managers are not covered by the company, but by the students themselves. Foreign students in particular carry a major financial burden, as they must pay for their visas and airfare themselves.[11] Students regularly work 72 or more hours per week, almost twice the upper limit imposed by the Fair Labor Standards Act.[8]

In 2007, Southwestern Advantage lobbied against[12][13] the Malinda’s Traveling Sales Crew Protection Act,[14] an anti-human trafficking bill intended to stop companies from putting their workers in dangerous and unfair conditions.[15] During the hearings, former Southwestern student dealers testified on both sides of the issue;[16] the bill was passed, but in a form that applies only to sales workers who travel in groups of two or more.[15]

Students are taught to indirectly ask if there are other families in the neighborhood who may have small children.[17] Such questions have sometimes been regarded as suspicious, resulting in complaints to local police, close police scrutiny and even an arrest for disorderly conduct.[18] By traveling door to door, students sometimes draw the attention of local law enforcement.[19] Local requirements are reviewed by the company prior to the summer in order to sell products legally, and Southwestern Advantage 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.[11]

Bans from campuses[edit]

Harvard University banned Southwestern from recruiting on its campus in 1977; four years later Southwestern resumed recruiting despite this ban.[20] In 2005, the University of Maryland banned Southwestern from recruiting on its campus; as of 2009, however, the University continued to receive complaints against the company.[21]

In the UK University of Durham's campus in 2005, the Durham Students' Union, stating that the "Southwestern Company 'experience' is not marketed as openly as it could be, and some students may be misled", banned Southwestern from Dunelm House and mandated the union president "to liaise with Southwestern Books to work towards marketing which is clearer and to ask the company to develop its recruitment process to ensure Durham students are aware of the risks and pressures that the job entails."[22]

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.[23]

In 2010, the University of Idaho announced that Southwestern Advantage is prohibited from recruiting on campus due to misconduct and violation of University and Career Center policies.[24]

A non-binding motion was passed at the 2010 AGM of the Students Association at the University of Edinburgh banning the company from all union premises.[25]

Notable alumni[edit]

See also[edit]

References[edit]

  1. ^ a b c d e f g BBB Review of Southwestern Company in Nashville, TN Archived October 11, 2012, at the Wayback Machine., Better Business Bureau
  2. ^ "Southwestern Advantage Questions & Answers". Southwestern. Retrieved 7/2/2013.  Check date values in: |access-date= (help)
  3. ^ Letter of Credit – The Southwestern Company Archived September 11, 2012, at the Wayback Machine.
  4. ^ 2011 Fact Sheet Archived March 27, 2016, at the Wayback Machine.
  5. ^ Is there any money up front? Archived March 4, 2016, at the Wayback Machine.
  6. ^ What about student safety? Archived January 15, 2016, at the Wayback Machine.
  7. ^ Living Arrangements/Where will they be going? Archived January 15, 2016, at the Wayback Machine.
  8. ^ a b "Southwestern Fact Sheet" (PDF). 
  9. ^ Southwestern Advantage Reviews
  10. ^ Project Polaris: Knocking at Your Door
  11. ^ a b Southwestern FAQs: What else do I need to know about the International Division? Archived December 16, 2008, at the Wayback Machine.
  12. ^ Student keeps door-to-door sales alive Archived August 8, 2011, at the Wayback Machine.
  13. ^ Wisconsin: Father, group upset about sales bill[dead link]
  14. ^ Malinda's Traveling Sales Crew Protection Act Pounded By Out-Of-State Company Archived March 21, 2012, at the Wayback Machine.
  15. ^ a b Wisconsin Tightens Rules on Sales Crews
  16. ^ Bill To Regulate Traveling Sales Crews Considered At Capitol Archived March 21, 2012, at the Wayback Machine.
  17. ^ Company defends salesman who had license revoked
  18. ^ Man arrested selling books door-to-door
  19. ^ Bandera (TX) Bulletin, "An out-of-towner has come a'knockin"
  20. ^ The Harvard Crimson: Book Company Recruiting Despite Ban By Harvard Archived March 3, 2016, at the Wayback Machine.
  21. ^ The Diamondback Southwestern Co. still banned from recruiting on campus Archived November 8, 2012, at the Wayback Machine.
  22. ^ Durham Students' Union - Policy - Southwestern Books Archived August 28, 2011, at the Wayback Machine.
  23. ^ University of Birmingham - Guild Council Motion - Southwestern on our Campus[dead link]
  24. ^ Southwestern Company banned from recruiting at UI[dead link], University of Idaho Argonaut
  25. ^ AGM attracts few, refuses to condemn Millbank violence Archived December 28, 2010, at the Wayback Machine.
  26. ^ "Representative Marsha Blackburn Biography - Project Vote Smart". Votesmart.org. Retrieved 2013-04-22. 
  27. ^ "Go Southwestern, Young Man | Opinion | The Harvard Crimson". Thecrimson.com. 1976-06-01. Retrieved 2013-04-22. 
  28. ^ Template:Quoted in the Magnolia Story
  29. ^ "Several Famous People Held This Trying Summer Job". NPR. 2011-07-15. Retrieved 2013-04-22. 
  30. ^ Three Weeks in October: The Manhunt for the Serial Sniper - Charles Moose, Charles Fleming - Google Books. Books.google.com. Retrieved 2013-04-22. 
  31. ^ "Welcome Glacier Commercial". Glaciercommercial.com. 2003-11-10. Retrieved 2013-04-22. 
  32. ^ E. Thomas Wood (2009-02-27). "Dortch Oldham dies at 89". nashvillepost.com. Retrieved 2013-04-22. 
  33. ^ "Rick Perry Bible reference book salesman long before 'The Response' - Maggie Haberman". Politico.Com. Retrieved 2013-04-22. 
  34. ^ "40 under 40 2002 - Pages - Crain's Chicago Business". Chicagobusiness.com. 2002-10-30. Retrieved 2013-04-22. 
  35. ^ Chu, Kathy (2006-07-21). "College students learn from job of hard knocks". Usatoday.Com. Retrieved 2013-04-22. 

External links[edit]