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User:Rryandavis/Southwestern Advantage

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Southwestern Advantage is a sales and leadership training program headquartered in Nashville, Tennessee that recruits and trains college students on how to run their own businesses as independent contractors selling educational products to families in their homes (commonly called door-to-door). Products offered include educational reference books, software, children's books, and online resources. Students participating in the Southwestern Advantage program are independent dealers, not employees of the company, purchasing books at wholesale from the company and selling them direct to families at retail, for delivery at the end of that student's particular selling season.

History

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In 1855, Southwestern Company was founded in Nashville, TN. 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. In 1862, Nashville fell to Union forces and Graves moved the company to Memphis, TN. After the Civil War ended, Southwestern returned to Nashville. In 1868 the company initiated programs of young people selling bibles and other books door-to-door [1]
In 1959, Spencer Hays, a young student at Texas Christian University, entered Southwestern's Summer Sales and Leadership Training 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 and Ralph Mosley was named Chairman and CEO. In 2005 Henry Bedford was named Chairman and CEO in place of the retiring Mosley. Dan Moore is the current president. The company still remains one of Nashville's top 25 fastest growing privately held companies[2].

Sales and Leadership Training Program

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The Southwestern Advantage Program works with between 2,500 and 3,000 students each year to sell educational books, software, and online resources during the summer months. Student dealers come from over 300 colleges and universities in North America, South America, Africa, and Europe. Company recruiters and representative explain that selling books door-to-door is one of the most difficult and challenging things a student can choose to do and therefore is not for everyone. Experienced dealers say the program provides them needed funds for educational expenses, boosts their confidence, and teaches them to stick with a project or responsibility despite adversity. Almost a third of the company's new dealers quit within the first 20 days, a time period the company refers to as "on the job training."

Program Operation

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Students participating in the Southwestern Advantage program are independent contractors, not employees, and as such run their own businesses. 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 submit 1099 tax forms.

Parental Support

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Before sales training begins, students are commonly asked to provide the company a letter of support signed by two endorsers, typically the student's parents. In this form letter, the endorsers recognize themselves as guardians of the student and that they understand and support the intentions and responsibilities of that student in being a Southwestern Advantage dealer.

Training

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All students entering the program attend Southwestern's business management training, a week-long sales school in Nashville or the UK, where dealers learn their line of products, prospecting, sales presentations, closing, ordering, accounting, and Southwestern's requirements for running a book business. Students role-play with managers in making sales presentations with families, how to generate leads and referrals of friends and neighbors, and how to keep their own morale up with positive self-talk when faced with challenges or rejection. Each new student is also given the opportunity of a "follow day" where they spend a day following an experienced dealer on the field. This training method is used throughout the entire selling season.

Safety issues are also covered in sales school, and female students have a separate meeting to cover safety precautions. Students are taught to check in with local authorities upon arriving in their sales locality to exchange information before selling begins. Female students are discouraged from working after dark and taught not to enter a home unless invited in by the woman of the house.

The company does not charge for training or the product sample kit. Students are responsible for the cost of travel to and from sales school, and for their personal expenses (food, gas, and $100 for company-subsidized lodging). At the conclusion of sales school, students leave for their assigned sales area outside their home or school states. Sales areas are predominantly suburban or rural.

Selling Permits and Licenses

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Students are asked to check in with local authorities to advise them that they will be selling in the area for the summer, and to obtain solicitor's permits where one is required. Some states, counties, and towns require permits to sell goods door-to-door. Permit fees for individual towns may range from $0 to $100, a business expense paid by the student dealer. The company reimburses 50% of permit fees.

Housing

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Students typically live with a host family in their sales area, sharing the expense of lodging, food, and travel with one to three other students of the same gender who often live in the same room. The company cannot guarantee housing due to the many uncontrollables involved, including possible status or plan changes by any involved party. They will, however, have experienced managers help to find possible housing for them. Methods include revisiting past host families, asking for leads when visiting potential customers, and approaching leaders of local schools and churches. For the 2011 selling season, sales managers were provided resources to arrange accommodations for first-year dealers. If these arrangements are not finalized or if they fall through before the student leaves sales school, the company will pay for the first week's lodging in a local extended-stay hotel while helping the student find a host family.

Working Hours

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Under the mentorship of a student manager, an organizational leader, and a sales manager, students work independently, approaching families in their homes by cold calling or through referrals. The most successful students work 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 student managers or at sales training meetings held each Sunday.

Earnings and Expenses

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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. Total expenses for the summer vary by the individual, but range from $1,500 to $3,000. As independent contractors, students pay their own travel and living expenses, but have the tax advantage that these expenses are deductible from income. [3]

Settling Accounts

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At the end of the summer, products sold are shipped to the students, who revisit each home where they made a sale, deliver the product, show customers how to use it, and collect any balance due. Any product unsold and undamaged is repurchased by Southwestern at wholesale cost minus shipping and handling, though many students choose to avoid shipping charges by returning the products directly when they go to Nashville to settle their accounts. Students generally pay their living expenses throughout the summer from the down payments they collect, remitting the rest to their company account to cover wholesale costs. At the end of the summer, they return to headquarters in Nashville or the UK, where they settle accounts and receive a check for the season's savings. Students who successfully complete a summer while demonstrating an ability to be self managed, and have the potential for leadership are invited to return in subsequent years as student managers. Student managers recruit their own teams during the school year and earn company bonuses based on the sales of the team they personally manage and train.

Products Sold

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Southwestern Advantage markets family-oriented reference books, software and online websites. Up until 2011, the company's lead products (The Volume Library and Student Handbooks) were educational reference books to help families with school work. In 2011, Southwestern Advantage merged these two product lines and created the Southwestern Advantage books, the reference book component of their integrated learning system, which also includes software and Southwestern Advantage's online resources. These new books feature a modern design, easy-to-use navigation and a focus on step-by-step explanation of common school subjects. Also in the product line are children's books (My Fun With Words dictionary, Explore & Learn children's encyclopedia, My Books (including shapes, colors, numbers, and words), and the Ask Me series) and software packages (titles include Clifford Reading, SpongeBob Typing, math and science programs to help with different grade levels, and College Prep including SAT and ACT practice materials by Kaplan, Inc).

Southwestern Advantage Online

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Customers have an option of buying the online component, Southwestern Advantage Online. It is a membership-based, comprehensive educational website containing step-by-step videos, interactive learning tools, practice problems, study quizzes, language learning, online mentoring, downloadable worksheets and reference content that are closely integrated with the Southwestern Advantage books.

SkWids.com

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SkWids is a membership-based educationally interactive website for younger children and their parents, from babies and toddlers to early elementary school (around age 10). It is predominantly video-based and contains characters young children can associate with to make the learning process more fun.

Risk and Challenges

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Controversy around the company has typically stemmed from recruiting practices of various dealers and the financial risk to students whose profits from sales do not substantially cover their expenses. Because students are independent contractors, they are expected to fully finance their living expenses similar to any other career job. The company does not pay for personal expenses like food, gas, or rent. In addition, the recommended Sunday training meetings that Student Managers hold each weekend are not covered by the company, but the independent contractors themselves. Foreign students in particular face the financial challenge of paying for their visas and airfare themselves. Students are taught how to prospect for leads and referrals by asking for recommendations of other neighborhood families to call on who have children. Such questions have sometimes been regarded as suspicious, resulting in complaints. By traveling door to door, students may sometimes draw the attention of local law enforcement. Local selling requirements are reviewed by the company prior to the summer in order to sell products legally, and students are offered assistance in the event of any permit issues. Student dealers must also face the challenges of being away from the comforts of home for the summer and must also endure the frequent rejection from prospects who are not interested in purchasing products. Students are taught that in order to be successful at this program that they must overcome the physical and mental challenges of working 72-82 hours each week without being paid an hourly rate.

Share The Advantage

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Southwestern Advantage began a donation program in 2011 to help the needs of America’s youth. The 'Share the Advantage' mission is: "Skills for Learning. Skills for Life. Every Child. Every Family." For every membership of Southwestern Advantage Online or SkWids (the educational children's website) sold, Southwestern Advantage will make their program available to charities and organizations who work with underprivileged, educationally challenged youth. The online membership site is donated on a one-to-one ratio, as sold by the dealers to the customers they generate while running their own business during their summer.

Notable Alumni of Company Program

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Affiliations and Community Involvement

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Southwestern Advantage has membership and involvement with:

As a Direct Selling Association (DSA) member, Southwestern Advantage has pledged to adhere to the Code of Ethics set forth by the DSA. As a condition of admission and continuing membership in the DSA, the Southwestern Advantage is bound to abide by the code's standards and procedures. The DSA Code of Ethics speaks to both the consumer and the seller. It ensures that member companies will make no statements or promises that might mislead either consumers or prospective sales people.

Many Southwestern Advantage dealers often choose to participate in community service day-projects while attending company incentive trips in places such as Mexico, Jamaica, and Dominican Republic [5].
On Dec. 14, 2010, Southwestern president Dan Moore appeared with Ann Curry on NBC's Today Show when the company donated 6,031 CD ROM bundles (retail valued at $602,798) as part of the Direct Selling Association's donation to the Today Show's 17th annual Holiday Toy and Gift Drive.[6]

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References

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  1. ^ TN Ecyclopedia of History: http://tennesseeencyclopedia.net/entry.php?rec=1237.
  2. ^ Nashville's Top 25 fastest growing privately held companies: http://www.bizjournals.com/nashville/news/2011/08/01/nashvilles-25-fastest-growing-private.html
  3. ^ Southwestern Advantage Fact Sheet: http://www.southwestern.com/Docs/corporate/FactSheet.pdf
  4. ^ Better Business Bureau ranking: http://www.bbb.org/nashville/business-reviews/publishers-book/southwestern-company-in-nashville-tn-10392
  5. ^ Southwestern Advantage Community Outreach in Jamaica: http://wcfcourier.com/news/opinion/blogs/extra_credit/article_4acc6424-09f7-11e0-83c8-001cc4c002e0.html
  6. ^ Dan Moore of Southwestern on NBC's Today Show: http://www.wesoldbooks.com/s/236/index.aspx?sid=236&gid=1&pgid=627&cid=1478&ecid=1478&crid=0&calpgid=61&calcid=1081


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