Selling High-End Socks by Giving Them Away


By building altruism into its business model, Bombas joins a growing list of so-called buy-one-give-one companies. Toms, a shoemaker based in Los Angeles, pioneered the idea. It gives away a pair of shoes to children in the developing world for each pair it sells. In recent years, the approach has expanded to companies making eyeglasses, snack bars, soap, toothbrushes and even pet food.

But as the buy-one-give-one companies have proliferated, so have questions about the model’s efficacy, and even its ethics. Impoverished children don’t need shoes as much as education and clean drinking water, goes one line of criticism. Others pointed out that by flooding a community with free shoes, a company like Toms was effectively putting local shoe stores out of business.

“As larger companies adopt these models to take advantage of the business opportunity, consumers may become suspicious about the authenticity of the overall concept,” Christopher Marquis and Andrew Park wrote in the Stanford Social Innovation Review. And as more entrepreneurs seek to capitalize on this form of cause marketing, companies are devising all manner of promises to entice new customers. United By Blue, an apparel maker in Philadelphia that sells $600 jackets, pledges to clean up one pound of trash from waterways for every item it sells.

That may be a worthwhile venture, but at some point, the connection between profit and benevolence becomes strained. “Opportunities exist for smoke and mirrors, sleights of hand and confusion on the part of the consumer,” said Katherine Klein, head of the Social Impact Initiative at the Wharton School at the University of Pennsylvania.

Writing in The Journal of Consumer Psychology last year, a group of professors referred to the practice as “guilt laundering.” And yet despite these critiques, buy-one-give-one companies are not only doing good, but also thriving.

Mr. Heath and Mr. Goldberg were colleagues at a lifestyle website when they learned — via a Facebook post — that socks were the most requested items in homeless shelters. Keen to start their own company and solve that problem, they spent the next couple of years researching the sock business and developing prototypes.

It didn’t take long for the men to arrive at a conclusion: “Most socks aren’t very comfortable,” Mr. Heath said. The sock business was ripe for disruption, they decided.

After dozens of iterations, the Bombas founders developed a sock with several new features: a seamless toe, a cushioned foot bed, an arch support system, elastic that keeps long socks up and blister tabs on the backs of ankle socks.

Photo

The socks that Bombas donates to homeless people have reinforced seams and an antimicrobial treatment.

Credit
Kevin Hagen for The New York Times

“If we build a better pair of socks, we can sell more socks,” Mr. Heath said. “And if we sell more socks, we can donate more socks.”

In October 2013, Bombas raised $145,000 through Indiegogo, a crowdfunding site. A year later, the company raised a $1 million seed round from friends and family. To date, Bombas has sold more than 900,000 pairs of socks.

As Mr. Heath and Mr. Goldberg have developed their business, they have learned from the stumbles of their buy-one-give-one peers. Instead of trying to solve problems in distant lands, the founders have focused on giving their socks to homeless shelters in the United States.

“If other companies can do this for developing world countries, why can’t we do this to solve a problem that people don’t even know is right here in our backyard?” Mr. Heath said.

And rather than lead their pitch with the social mission, they try to keep the focus on what they say are the most comfortable socks on the market.

“It’s a fine line between exploiting the people you’re trying to help and helping those people,” Mr. Heath said.

Homeless advocates say their help is welcome, however it arrives. “Socks are one of the most needed but often the least donated items at shelters,” said Megan Hustings, interim director of the National Coalition for the Homeless. “Anything that works to get those socks to people is good.”

The socks that Bombas gives away differ slightly from those that it sells. The donated socks feature reinforced seams for added durability, dark colors that show less wear and an antimicrobial treatment that prevents odors and germs.

While Bombas employees distribute some socks personally, they send most of the donations to charity partners like Hannah’s Socks, a group in Ohio that has distributed 100,000 pairs to local shelters.

Giving away so many socks comes at a cost. In 2014, when Mr. Heath and Mr. Goldberg appeared on “Shark Tank,” the reality television show where entrepreneurs pitch investors, their buy-one-give-one model came under fire.

“You have to double your sales to give me the equivalent returns I get from a company that’s not doing the same thing,” said Kevin O’Leary, one of the hosts, declining to invest.

Another host, Mark Cuban, the billionaire owner of the Dallas Mavericks basketball team, said the price point for socks was too low to justify the $4 million valuation the Bombas founders were seeking.

Finally, Daymond John, founder of the Fubu clothing line, agreed to invest $200,000 for 17.5 percent of the company, or a valuation slightly over $1 million. (After the show, the terms of his investment were renegotiated.) It was a humbling outing for the founders, who are now seeking more funding.

Yet even without a heady valuation, Bombas is enjoying a growth spurt. Sales reached $4.6 million last year, and are expected to hit $7.4 million this year. The average pair sells for about $11.

During their recent visit to the Bowery Mission, while Mr. Heath and Mr. Goldberg handed out socks, Bombas employees served stewed chicken, quinoa and tomatoes to more than 200 people who had turned up at the shelter in the rain.

As Mr. Heath engaged in charity, he addressed a thorny issue. Was Bombas exploiting people’s sympathy in order to make a buck? And if it was, did that even matter?

“As far as people washing away their guilt, that’s fine,” Mr. Heath said. “We’re doing something good with the purchases they’re making. If they feel good about themselves, great.”

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