The term “bottom billion” was first coined in 2007 by economist Paul Collier. It refers to the poorest billion people in the world. Collier describes many reasons why most folks in the bottom billion stay there. Today I’m going to address the reason most applicable to you.

That is, most companies don’t bother to market needed products and services to these folks. “They have no money,” they say, “How can we make money selling stuff to people with no money?”

Here’s how.

There’s a big company based in Mexico you’ve probably never heard of called Elektra. They have built an entire company, a profitable one, selling home appliances to the extreme lower class in Central America. How the hell did they do that?

The first thing they did was focus on needed items rather than luxuries. They started out by selling washers and dryers, beds, refrigerators, and other basic necessities. These days they sell things like TVs and phones too, but that’s a relatively new development, and they’re still not going crazy with any luxury items.

Next, they enacted a very interesting policy. They actually sold merchandise to poor people without any money. They simply said that if you have a job and an address, they’d give you a refrigerator or other needed appliance, on loan. That’s all you needed to qualify.

They asked for a cash payment once a week or month, and charged interest like any other loan (albeit at higher rates). They also stipulated that everyone in the household owed the money, in case the primary purchaser lost his or her job.

Before you start screaming about exploiting the poor, that’s not what happened. The poor actually gained upward mobility much faster. Poor families who never had a dishwasher now had one. Soon, they had a clothes washer too. Then a refrigerator. And on and on. The poor moved upwards into less-poor or middle class lifestyles, and Elektra made money. Win / win.

What about Elektra losing money on bad loans? Amazingly, Elektra actually has a very low bad debt ratio, lower than most banks. This is because the new refrigerator or clothes washer was the poor family’s only debt, rather than one of many debts the typical middle class Westerner has. Moreover, once these families had an appliance like this, they did not want to lose it, so they made sure they got their payments in on time. This is a universe away from the typical first world Westerner who decides to default on their credit card payments.

As you can see, there is tons of money to be made even when selling to a very poor market, just as long as you’re creative and focus on necessities.

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