Artisan economy: inside the business of handmade

The global handicraft industry was valued at $466 billion in 2020, but makers often aren't fairly compensated or recognized for their work. Here are some brands nurturing the art of craft through new and improved business models.
artisan economy 16x9 hero

Souhad El Bahiz and Rkiya Ibchine had both fought their way to success in Morocco's artisan industry when they decided to team up to launch a leather goods cooperative in 2017. Both had years of experience and met at artisan exhibitions in Europe; Rkiya was a solo founder who'd navigated Marrakesh's male-dominated markets to sell her leather pouffes, while Souhad had taken over the business of husband, a master craftsman, after he became paralyzed. 

Launching a cooperative, which enjoys special tax-free benefits in Morocco, was a good start, but there were other challenges: wholesalers would demand low prices, only to resell for much higher, and it was difficult to navigate the more lucrative online-retail world without a good grasp on languages outside their native Darija (a form of Arabic spoken in Morocco). 

Founders such as Souhad and Rkiya aren't alone in these challenges. Though the handicraft industry is expected to be worth $847 billion by 2027 and the artisan economy is the second largest employer in the developing world, makers often aren't fairly compensated or recognized for their work. Wages are low and middlemen squeeze the price further. Online-retail sites, where artisan business owners have more direct access to global customers, have been increasing their fees – sellers on online marketplace Etsy recently went on strike over additional costs. Major brands, meanwhile, continually rip off designs handed down for generations with no credit back to the original makers. Travel restrictions due to Covid-19 also hurt the industry, with tourism dropping significantly in the past two years.

With that in mind, there's a growing need for business models that put ownership – financial and creative – back into the hands of artisans. Here's how brands are rethinking the model.

Harnessing online retail: the Anou Cooperative

When Rkiya and Souhad launched their cooperative in 2017, they also launched on the Anou Cooperative, an artisan-owned collective comprising more than 600 makers across Morocco. It works with artisans to display their wares on a site similar to Etsy, with 100% of the sales going back to the creator (the Anou adds an additional fee on top of the final price to develop the cooperative). It also provides communication with buyers, quality control, shipping, design consultation and training on Instagram and Facebook ads. ‘They helped us to combine good quality and good price,’ says Rkiya.

Crucially, the Anou allows artisans to set their own prices – for example, Rkiya estimates that through making individual deals with wholesalers, the collective gets around 400 MAD ($40) per pouffe, whereas via the Anou, which has been a route to connect with wholesale customers, it can get around 600 MAD ($60). Wholesale work, which is more lucrative but more difficult than individual sales, has grown three times in the past year for the Anou's artisans. Next up for the cooperative is a focus on better-quality materials; it intends to launch the Atlas Wool Supply Co, a carbon-negative wool mill in the Aït Bouguemez valley, which will also fund environmental research.

Cultural intellectual property rights: Mahila Print

While the internet has allowed for the vast marketing of traditional prints, it also allows for far easier plagiarism, which is difficult and expensive for artisans to protect against. Block-printing designs in Bagru, Rajasthan, have traditionally been defended through its difficult-to-replicate collaboration between local communities – from the farmer harvesting plants for natural dyes to the wood-block carver to the final printer. But this hasn't deterred big brands – in 2019, People Tree, a design studio in Delhi that works with craftspeople in Rajasthan, accused fashion brand Dior of copying a design featuring a yoga print (the case was settled out of court). 

‘In India, the legal system is just starting to catch up with intellectual property [IP] rights,’ says Jeremy Fritzhand, managing director of Bagru-based Mahila Print. ‘People aren't fully aware of IP and there's a need for further education.’

While legal reforms are ongoing, Mahila Print has created a business model that makes it easy for designers to use block-print designs in their work while properly compensating the women artisans who hand-carve the prints. People can license a print from its design library for a set fee, and soon it'll be possible to purchase fabric from the library, which pays a 5% royalty fee paid to the maker. You can also visit the studio in Bagru, to collaborate and co-create with the artisans. Whatever method is chosen, the Mahila Print advisory board drafts a mutually beneficial agreement within the Cultural Intellectual Property Rights Initiative framework

Artisan-first business model: Waré Crafts

Building an artisan-first business doesn't just mean selling artisan-made goods – it means creating a business model built from local practices and values. That's what Paula Peña-Amaya discovered when building Waré Crafts, a brand that produces and sells mochila bags, which are designed and woven by the Wayuu people, who are indigenous to northern Colombia and Venezuela. While Western businesses typically rely on documents to ensure a commitment will be honored, Waré Crafts instead uses Wayuu customs and traditions. If a conflict arises, it's worked out by one of their field coordinators (bilingual in Spanish and Wayuunaiki, the Wayuu language) or elevated to a traditional authority (an older, knowledgeable person who's head of the clan) or the palabrero – someone specifically educated on conflict resolution.

‘This enabled us to create a sense of loyalty, transparency and commitment according to their norms,’ she says. ‘We built a mutual trust.’

Further, the design is in the hands of artisans – the crochet craft is often passed down from mothers or grandmothers and is a deeply personal creation – as opposed to demands of customers. Often bags are made on request and limited in number; finishing touches, such as pompoms and straps, could vary, as they're designed at the point of production. The business also operates a profit-sharing model, where artisans are paid for their work (the company covers raw material and transport costs) and receive a bonus when bags are sold. 

Access to scale: SOKO

One of the challenges facing individual artisans is access to larger markets – often their reach is limited by what they can sell locally or through access to a nearby factory. SOKO, a brand that sells jewelry made by Kenyan artisans, has developed a mobile app that acts as a virtual factory, ensuring standardized design and orders for artisans. 

SOKO's system uses machine learning to match product orders to the right artisan in their network of more than 2,500 across Kenya. Artisans use the app to manage inventory and deliveries and are paid directly via mobile, with SOKO's local field workers using it to check quality and production. The savings are passed on to artisans, who earn 25% to 35% of the final price, compared with an industry average of 2% to 3%.

A version of this article was published in the Courier Weekly newsletter. For more insights, analysis and inspiration, sign up here.

You might like these, too