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|Founder||Rev. J. R. Graves|
|Headquarters||Nashville, Tennessee, United States|
Henry Bedford, Chairman and CEO of SouthwesternSpencer Hays, Chairman of The Executive Committee
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.
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.
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, and the program does not offer any guaranteed pay.
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.
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. 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.
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.
Working conditions and income
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.
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. 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, which usually range from $1,500 to $3,000. 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. 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.
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 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. 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. Students regularly work 72 or more hours per week, almost twice the upper limit imposed by the Fair Labor Standards Act.
In 2007, Southwestern Advantage lobbied against the Malinda’s Traveling Sales Crew Protection Act, an anti-human trafficking bill intended to stop companies from putting their workers in dangerous and unfair conditions. During the hearings, former Southwestern student dealers testified on both sides of the issue; the bill was passed, but in a form that applies only to sales workers who travel in groups of two or more.
Students are taught to indirectly ask if there are other families in the neighborhood who may have small children. Such questions have sometimes been regarded as suspicious, resulting in complaints to local police, close police scrutiny and even an arrest for disorderly conduct. By traveling door to door, students sometimes draw the attention of local law enforcement. 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.
Bans from campuses
Harvard University banned Southwestern from recruiting on its campus in 1977; four years later Southwestern resumed recruiting despite this ban. 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.
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."
- Marsha Blackburn – Tennessee congresswoman
- Martin Fridson – philanthropist and financial author
- Chip Gaines – star on the hit TV Series Fixer-Upper
- Bruce Henderson – founder of Boston Consulting Group
- Max Lucado – philanthropist and author of Christian books
- Charles Moose – police chief who led investigation of the DC Sniper
- Ronnie Musgrove – governor of Mississippi
- Rick Perry – governor of Texas; 2012 U.S. presidential candidate
- David Rosen – political fundraiser for Hillary Clinton, Al Gore, and Pat Quinn
- Ken Starr – federal judge; investigator of Whitewater controversy; former president of Baylor University
- Green River Ordinance – common American city ordinance prohibiting door-to-door solicitation
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