ABSTRACT
TOMS Shoes is a for-profi t business with a philanthropic component. Its mission statement is simple: “To make life more comfortable.” It seeks to do this by selling a fun product while helping those in need. 2 TOMS Shoes was started in 2006 after entrepreneur Blake Mycoskie witnessed the poverty among villagers in Argentina, poverty so extreme that the villagers could not even afford a pair of shoes. The 29-year-old Mycoskie returned to the US with 200 Argentinean shoes and a mission. He went from one retail store to another with a unique business proposal. He would start an organization that would provide a pair of shoes for a child in need for every pair of shoes purchased. Finally, a few Los Angeles boutiques agreed to sell the shoes. Mycoskie’s idea was picked up by the Los Angeles Times , which ran an article on his business idea. To his surprise, that weekend garnered him $88,000 in orders. Two years after offi cially establishing TOMS Shoes, the business had $9.6 million in revenue. 3
The TOMS business model is unusual. While many businesses engage in cause-related marketing, at TOMS the philanthropic component is just as important as the for-profi t business. The cost of providing the shoes to children in need is built into the shoes’ sales price. The customer is thereby turned into the benefactor, enabling TOMS to become a sustainable organization based on giving back to the world on a continuous basis. As long as people continue to purchase TOMS shoes, children in need will receive a pair in return. In the process, TOMS is also able to turn a profi t, support itself, make the world a better place, and educate consumers on how they are helping children in need by providing them with a pair of shoes.
