Sustainable business & profitable business: hand-in-hand?

 My previous post here at the Wine on Deck blog was all about the challenge of doing business in a "sustainable" manner within our current global marketplace.  Today's U.S. MBA graduates and entrepreneurs (I count myself among them) are all on board, and they think it can be done.  But can it? 

I posit that it's not at all easy to make a profit with a "zero footprint" business model.  Especially when the rest of the players in the global marketplace don't think it's important to consider the environment and nearby populations when competing for market share.



Rather, I suggest that "sustainable business and profitable business go hand-in-hand with customers who demand the best".   It's my mission, through Wine on Deck, to prove that this is true.  Customers who demand the best - and that includes the best treatment of people and planet - are the fundamental driving force behind sustainable or green businesses' profitability.  Without going into a full discussion of how products are brought to market, and what makes a product a success or a failure - I'll just remind the reader that, at the end of the day, it's the customer who puts down the cash for a product.  And that cash is the life blood of any business.

Customers who demand low prices aren't demanding that their purchase be kind to the Earth.  And companies that compete in selling low-priced goods can't possibly bear the extra expense of environmental or social responsibility without sacrificing their margins or raising their prices.  Either way, such a company would eventually disappear.

Let's step one rung up the ladder now, and look at how companies buy from their vendors.  Every company has a choice when it comes to sourcing what they need to make their products.  Again, a company striving to create the lowest-priced goods can't afford to pay extra for "green" materials.

A simple example from Wine on Deck is a good illustration: the saw-tooth bits we use to bore the holes in our Wine Wings cost about $9.  They're made in China from steel and carbide.  Each bit can cut roughly 200 holes before it needs to be either replaced or sharpened.  Our local sharpening shop will sharpen the bits - for $14.  If Wine on Deck were seeking to sell our Wine Wings at the lowest possible price, we'd never sharpen the bits.  We'd just throw them away and buy new ones, saving $5.  But we price our Wine Wings at a premium, in part so we can afford to pay the $14 to have our bits sharpened.

As company CEO, I'm proud to support the local craftspeople at our local sharpening shop.  I like it that our money is staying in Massachusetts, and the money is going towards paying a person to work.  It's a lot better, in my view, to do this, rather than demand yet more iron ore be ripped from the earth, then formed in a factory in China.  In this small way, Wine on Deck is doing our business responsibly and sustainably.  But Wine on Deck will go out of business unless there are customers who are willing to pay the extra money for local sharpening instead of foreign mining.

This is why customers drive sustainability.  Are you this kind of customer?