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Income generation

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Revision as of 17:50, September 1, 2009 by Tom Sponheim (Talk | contribs)

"How can people earn money by making and selling solar cookers, when some solar cookers are so easy to make that almost anyone can do it?”

If potential customers build their own cookers instead of buying them from a cooker production company, yes, that company would have some problems making sales. Again, though, it is good to distinguish between theory and practice. From SCI's point of view, it would be wonderful if solar cookers were being copied and produced by individuals who had seen cookers being sold and used by others--this would greatly speed up the spread of solar cooking. However, in practice, I have heard very few reports from developing countries about people spontaneously copying the solar cookers of their neighbors. In fact, I remember two such reports in the past 3 or 4 years, and in both cases the copying was fairly minor in comparison to the number of cookers produced by the main project. On the basis of that (admittedly thin) evidence, it seems plausible that most cookers in an area would be purchased, not home-made. Here's another thought--if there was a small production co-op to make solar cookers, or a small business, the producers would be dealing in higher volume and could therefore buy the necessary supplies--foil, cardboard, glue, black paint, plastic bags--in bulk, lowering the unit cost per cooker, compared to the prices a person who was planning to build one or two cookers might pay. The producer organization, because of its organization and experience, should be able to produce better cookers more cheaply.

So, it is possible that even where some people make their own, there would still be a market for cooker sales. How lucrative this market would be is hard to predict and would vary greatly from place to place. In areas where people commonly made a variety of tools for themselves, the business of selling solar cookers might not be very profitable or profitable for long. On the other hand, in some areas, activities such as acquiring aluminum foil and making something with it could seem very alien--something people would not take to, meaning that they'd be more likely to buy a cooker than make one for themselves.

However, home-made production of CooKits is not likely to ever be a huge money maker, because it would be hard to sell them for a lot more than the combined costs of supplies and labor needed to make them. However, small profits seem possible. With box cookers, the profit margin may be greater, because they require somewhat more specialized work and because they are larger capacity and more expensive, there is the possibility of a greater profit margin. However, box cookers would only work as a product for sale in communities that could afford box cookers.

A vitally important point to make here is that selling cookers is not a path to quick wealth. If one builds cookers at a low enough cost that they can be sold for a small profit margin, that is a step in the right direction. However, one then has to consider the costs of doing the selling. If people are lining up outside your workshop to buy your products, your costs of doing the selling, per unit, will be small, so your profits are more likely. However, if the producer has to spend hours going from house to house trying to convince the skeptical to buy cookers, the profits will seem too small for the amount of time spent. In our field project in Kenya, where we are trying to explore how cookers are best marketed in a rural African setting, we had no illusions that our first field project would be a net income producer in its first X number of years. We expect our project costs to far exceed the combined income for all our sales people in the project for many years. Part of our expenses will come from the fact that we are trying to monitor, measure, and extract learning from the process. However, there is something more fundamental to consider. Our theory is that the first cookers in a community are the hardest to sell. It is hard to sell something that is unknown, unproven, and unfamiliar to people who have to watch every penny they spend. So, in the early stages of our project, we expected to spend a lot of money creating awareness, so that the cookers become more familiar in the area. We have done lots of demonstrations of solar cooking, so that the cookers are less unproven. We expect that after 500 or 1000 cookers have been in use in the area for a while and neighbors start telling neighbors about the benefits and showing off their solar baked goods, etc., that sales will increase, and more importantly the ease of sales will increase, so that each seller can sell more cookers while spending less time making the sales, so that each individual seller's earnings per hour or per day will become better and better. When solar cooking is well known, we expect sales to become easy--mostly through repeat customers (who want a second or third cooker or a replacement for a damaged one) and from the formation of new families through marriage. However, we have only had one field project that really was shaped to test and refine ideas about solar cooker sales as an income producing project for individual sellers, and that project is far from complete.

I have heard of people making reasonable profits from the sales of solar cookers--mainly in India. India started on the road to solar cooking in the 1970s and by the 1980s had a national program to boost solar cooking by subsidizing the sale of cookers. With the government helping to create awareness (and from awareness, market demand) and subsidizing the cookers, some businesses did make money. I met one successful Indian producer of cookers, and he indicated that it had not been easy getting started. He and his wife did tons of work following up with their first customers, to make sure those first customers had a good experience with solar cooking, so that there would be favorable word of mouth about solar cooking in the town. They distributed newsletters with additional solar cooker recipes to keep their early customers interested. In fact, in the early days, they developed a series of questions to ask potential customers, so that they could gauge how likely that customer was to actually use the cooker and use it correctly enough to get satisfaction from the purchase--then they would refuse to sell to people who they thought would not have a good solar cooker experience. In short, they were building their business for the long run, not the short run. They succeeded to the point where solar cookers became a common wedding present in the town.

To recap what I've been saying here--it is possible that small scale selling of home-made cookers could yield tiny profits, but the time spent selling the cookers might make the amount earned seem less than worthwhile. Also, the most profitable period for solar cooker sales is not in the beginning, but years or a decade later, when solar cooking has become common place, so that there is a real, permanent market for cookers.

That, however, is not the end of the income generation question. SCI's belief is that producing cookers is less than half the battle. The harder part of the equation is teaching people how to use them well enough that the users do reap a large portion of the possible benefits. So, in our field project, we are investigating the possibility of the teachers of solar cooking skills charging a small fee to their students as a way for them to earn some income while helping spread solar cooking. I don't think we have enough results yet to say anything authoritative on how this works or how it can best be done.

The type of income generation that seems easiest to attain without a lot of money and effort spent up front building awareness and markets would most likely be using the cookers in an income-generating way. I know of one case of a refugee woman who started a micro-baking enterprise in a refugee camp, using her solar cookits. Baking is very, very difficult on the traditional three-stone fire, so in many communities people do not bake for themselves, but baked goods are often considered a special treat, one that they will pay for. So, this woman purchased ingredients for baked goods (she probably did not get a good deal on her purchases, because her business and capital were far too small to allow her to buy in bulk, and in fact she had to buy in a marketplace that was more or less stacked against the buyer. However, because she was filling a real market niche, and because she didn't have any fuel costs, she did make a profit. By US standards, of course, the amount of profit was pathetic, but by her standards, it really boosted her quality of life. I've heard about a women's group that got into solar cooking in the 1990s in Kenya. They earned extra money by specializing in baking birthday cakes--a valuable item most people couldn't make for themselves because they couldn't bake.

If you still have our instruction booklet about how to make, use and enjoy solar cookers, turn to page 42. It gives a number of uses for solar cookers. Perhaps in your community, one or more of these functions are desired but expensive or unavailable. If so, those who have solar cookers could provide these functions for a small fee. Solar cookers provide a small area of concentrated heat, and heat tends to dry things out. So any task that requires modest heating and/or drying on a small scale may be something that can be done with solar cookers, thus opening up possibilities for income generation.

I have had my own income generation fantasy, which has not been tested as far as I know. My idea is based on the idea that some foods simply take a lot of cooking--beans being a good example. So, I imagine a tiny business in which one offers the service of cooking beans for other families. The fee for cooking a pot of beans could be set at 1/2 the cost of the firewood that would be used to cook the beans for oneself--thus giving people a strong motive to use the service. I might have 10 CooKits, so I could probably cook 20 jars of beans per 5 or 6 hour day. My earnings would be the equivalent of 10 bundles of wood, which wouldn't be too bad for a job that didn't require very much real work. Perhaps I could be knitting during my down-time. However, the big bonus to this plan would be that people would get the idea that they too could use solar cookers to cook their beans and other foods. Thus, I would be building a market for the cookers that I would sell to supplement my income from bean cooking.

Another story on this topic. I've heard from a carpenter in Kenya who actually earns income from making solar cookers. He has done this on his own, without support (I'm pretty sure about this) from any larger institution spreading awareness or encouraging people to buy solar cookers. He builds and sells about 12 wooden solar box cookers per year. Obviously, he could not support himself on solar cookers alone--they were just one aspect of his carpentry business. So, in thinking about solar cookers and income generation, it may not pay to think of the solar cooker income as being one's only or main income stream, but simply being an additional income.

That story reminds me of the Development Technology Centre's project in Zimbabwe. We worked with them for a number of years, and they experimented with setting up women as sellers of solar cookers for income generation. I suspect there were problems with this program in that some of the sellers may have been too eager for the quick sale and less inclined to provide the customer follow-through that would enable large numbers of people to succeed with their solar cookers and thus help build positive awareness and a better long term market in the community. Be that as it may, what was interesting was that the women who seemed most successful were women who already had small businesses. Therefore, they had an existing client base to whom to sell cookers, and if on a visit they failed to sell a cooker, their time might have been paid for by selling one of their other products. The point is that they did not depend exclusively on cooker sales, but included them as part of their line of products and services.

One last story. Years and years ago, a group at the University of Chile did extensive work with solar cookers in one small town in the deserts of northern Chile, the town of Villa Seca. When they finished their very intensive promotion project, most of the town’s people were confirmed users of solar box cookers. After they were thoroughly familiar with how to make solar cookers, how to use solar cookers, and the striking advantages of solar cookers that they could see for themselves, the people in the community took two further steps. They started producing box cookers to sell in neighboring towns, where people had heard or witnessed Villa Seca's success. And, they started a restaurant based on solar cookers. I have read articles within the past few years that describe the Villa Seca solar restaurant as being a significant tourist attraction in that part of Chile. Note that the Solar Project Gambia has also started a restaurant call Elena's Solar Food Restaurant

It is likely that none of these stories match the exact situation you face, but they may point your thinking in useful directions. I think the key points are that there is potential for income generation with solar cookers, that it is not automatic, and that profitability, if it is achieved, will be more likely and of a larger scale later rather than sooner--after solar cooking becomes widely accepted.

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