Southwestern Advantage

Southwestern Advantage, formerly known as Southwestern Company, is a direct selling program that recruits college and university students as independent contractors to sell educational books, software, and website subscriptions door-to-door using direct selling methods.[1] Southwestern Advantage is part of the Southwestern family of companies.

Southwestern Advantage
Private
IndustryConglomerate
Founded1855
FounderRev. J. R. Graves
Headquarters
Nashville, Tennessee
,
United States
Key people
Dustin Hillis, CEO
Spencer Hays, former Chairman of The Executive Committee
ParentSouthwestern family of companies
Websitewww.southwesternadvantage.com

Program

Direct selling methods have raised questions over the ultimate value of the transactions entered into, both by the consumer as the person purchasing the product, and the individual contractors who make the sales on behalf of third parties such as Southwestern Advantage.[2] Every year, the company recruits a few thousand American and a few hundred European university students to work as independent contractors who sell educational books, software, and subscription websites during the summer months.[3]

The company operates on a structured direct sales platform where student dealers participating in the program are independent contractors, not employees. 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,[3] and the program does not offer any guaranteed pay.[4] Because students hired are independent contractors, they are expected to fully finance their living expenses, food, gas, and rent, even when on company trips. In addition, expenses of the required Sunday meetings with managers are paid for by the students themselves. Foreign students must pay for their visas and airfare themselves.[5] Students regularly work 72 or more hours per week, almost twice the upper limit imposed by the Fair Labor Standards Act.[6]

Students provide the company a letter of credit signed by two endorsers, typically the student's parents, in which the endorsers agree to be responsible for up to $500 each if the student fails to pay any money owed to the company at the end of the summer.[3][7] Students entering the program attend a week-long training program in Nashville, Tennessee.[8] They are responsible for the cost of travel and their personal expenses.[9] At the conclusion of the training, students are assigned to a sales area outside their home or school states. Sales areas are predominantly suburban or rural.[10]

According to the charity Polaris, organizations often send their recruiters to target unemployed young people and college students with promises of high profits.[11] As independent contractors, Southwestern Advantage avoids the Fair Labor Standards Act's mandates for minimum wage or overtime pay.

Working conditions and income

Students typically have a host family near their sales area, generally alumni, family of other students, or families found by door-to-door appeals. Housing is not guaranteed by the company.[3][12]

Dealers report working 72 or more hours per week in the field, making 30 or more presentations each day, in addition to time spent on bookkeeping, talking to managers or at sales meetings held each Sunday.[3] 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,[6] which usually range from $1,500 to $3,000.[3]

Students are taught to inquire about other families in the neighborhood. This is done to save time so salesmen can skip visiting the homes of people who would not be interested in educational products directed towards younger school aged individuals.[13]

At the end of the summer, products are shipped to the dealers, who revisit the homes where they made a sale to deliver the product and collect any balance due. Dealers generally pay their living expenses out of the down payments they collect, remitting the rest to the company to cover wholesale costs. Dealers return to headquarters in Nashville, where they settle accounts and receive a check for the season's earnings.[3] Some dealers are invited to return in subsequent years as managers, who recruit their own teams during the school year and earn a percentage commission on the sales of their team, as in multi-level marketing.

Products

Southwestern Advantage publishes and markets educational books, software, and subscription websites. The main product, Southwestern Advantage, is a series of educational reference books targeted to school-age children. The product line also includes software, college prep material, and others.

Lobbying

In 2007, Southwestern Advantage lobbied against[14][15] the Malinda's Traveling Sales Crew Protection Act,[16] an anti-traveling sales crew bill[17] intended to stop companies from putting their workers in dangerous and unfair conditions.[18][19] The bill was passed, but in a form that applies only to sales workers who travel in groups of two or more.[18]

Bans from campuses

In 2019, student dealers represented over 240 college and university campuses around the world.[20]

Harvard University banned Southwestern from recruiting on its campus in 1977; four years later Southwestern resumed recruiting despite this ban.[1] In 2005, the University of Maryland banned Southwestern from recruiting on its campus; as of 2009, however, the University continued to receive complaints against the company.[21]

In the UK University of Durham's campus in 2005, the Durham Students' Union, stating that the "Southwestern Company 'experience' is not marketed as openly as it could be, and some students may be misled", banned Southwestern from Dunelm House and mandated the union president "to liaise with Southwestern Books to work towards marketing which is clearer and to ask the company to develop its recruitment process to ensure Durham students are aware of the risks and pressures that the job entails."[22]

The Guild of Students at the University of Birmingham passed a motion in May 2006 banning the company from its premises and encouraging the University to do the same.[23]

In 2010, the University of Idaho announced that Southwestern Advantage is prohibited from recruiting on campus due to misconduct and violation of University and Career Center policies.[24]

A non-binding motion was passed at the 2010 AGM of the Students Association at the University of Edinburgh banning the company from all union premises.[25]

See also

References
  1. The Harvard Crimson: Book Company Recruiting Despite Ban By Harvard Archived March 3, 2016, at the Wayback Machine
  2. Wotruba, Thomas R.; Tyagi, Pradeep K. (July 1991). "Met Expectations and Turnover in Direct Selling". Journal of Marketing. 55 (3): 24. doi:10.2307/1252145. JSTOR 1252145.
  3. BBB Review of Southwestern Company in Nashville, TN Archived October 11, 2012, at the Wayback Machine, Better Business Bureau
  4. "Southwestern Advantage Questions & Answers". Southwestern.
  5. Southwestern FAQs: What else do I need to know about the International Division? Archived December 16, 2008, at the Wayback Machine
  6. "Southwestern Fact Sheet" (PDF).
  7. Letter of Credit – The Southwestern Company Archived September 11, 2012, at the Wayback Machine
  8. 2011 Fact Sheet Archived March 27, 2016, at the Wayback Machine
  9. Is there any money up front? Archived March 4, 2016, at the Wayback Machine
  10. What about student safety? Archived January 15, 2016, at the Wayback Machine
  11. Project Polaris: Knocking at Your Door
  12. Living Arrangements/Where will they be going? Archived January 15, 2016, at the Wayback Machine
  13. Company defends salesman who had license revoked
  14. Student keeps door-to-door sales alive Archived August 8, 2011, at the Wayback Machine
  15. "Wisconsin: Father, group upset about sales bill". Archived from the original on 2012-09-19. Retrieved 2010-03-04.
  16. Malinda's Traveling Sales Crew Protection Act Pounded By Out-Of-State Company Archived March 21, 2012, at the Wayback Machine
  17. http://docs.legis.wisconsin.gov/2013/related/acts/361
  18. Wisconsin Tightens Rules on Sales Crews
  19. Bill To Regulate Traveling Sales Crews Considered At Capitol Archived March 21, 2012, at the Wayback Machine
  20. "International exchange visitors give back". www.auroraadvertiser.net. Aurora Advertiser. Retrieved 9 August 2019.
  21. The Diamondback Southwestern Co. still banned from recruiting on campus Archived November 8, 2012, at the Wayback Machine
  22. Durham Students' Union - Policy - Southwestern Books Archived August 28, 2011, at the Wayback Machine
  23. University of Birmingham - Guild Council Motion - Southwestern on our Campus
  24. Schlake; Samuels (March 23, 2010). "UI bans Southwestern". The Argonaut (University of Idaho). p. 1.
  25. AGM attracts few, refuses to condemn Millbank violence Archived December 28, 2010, at the Wayback Machine
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