Wholesaling to the base of the pyramid: Tenda Atacado

500x375 traditional bahia street kitchen salvador da bahia brasil

Here’s a marketing challenge for you: Build a billion-dollar business serving clients who

  • Earn less than $1,500 a month
  • Completed less than eight years of education
  • Lack access to banking, credit, or financing

Brazil’s Tenda Atacado is doing it in Sao Paulo by wholesaling to entrepreneurs at the base of the economic pyramid (BoP). Many of these are individual or family food vendors.

(In marketing terms, wholesaling is selling to clients who then resell. Retail, on the other hand, is selling to clients who consume what is purchased.)

As Marco Gorini, Tenda Atacado’s CEO, writes, “the success of a BoP business model depends on really getting to know the client’s purchasing behaviors and needs, maintain a personal relationship with them, and understand scale. Tenda came to realize that in order to launch a sustainable business and contribute to poverty reduction, the company needed to change its paradigm: Tenda now considers clients as human beings with needs, dreams, and the desire to improve his or her family’s quality of life.”

As Tenda’s success shows, thorough market research and customer needs analysis goes a long way towards business success. Key for Tenda was understanding pricing for their target market: Sao Paulo’s BoP entrepreneurs didn’t have the credit, or financial knowledge, to pay in many of the more conventional ways that wholesalers expect.

In response, Tenda built access to financial education and microcredit for their customers. Through small loans, customers can purchase new equipment to improve or expand their business.

(Admittedly, I did shake my head at the ‘paradigm shift’ of now regarding clients as human beings. As opposed to what?)

Tenda is garnering attention for their approach, including as one of the winners of the G20 Challenge 2012 for Inclusive and Innovative Business.

Would this work in the U.S.? What if a computer company sold inexpensive computers to solo entrepreneurs on credit along with online education about how to conduct online businesses like front-end web development or small business bookkeeping?

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