Southwestern Company

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Southwestern Company

Type	Private
Founded	1855
Founder	Rev. J.R. Graves
Headquarters	Nashville, TN, USA
Key people	Dan Moore, President Henry Bedford, SW-GA CEO Spencer Hayes, Chairman of The Board
Industry	Direct Sales
Website	www.southwestern.com

Southwestern Company recruits college students to sell educational reference books and children's books door-to-door. Students participating in the Southwestern program are independent contractors, not employees of the company, purchasing books at wholesale from the company and selling them direct to private families at retail.

Student dealers typically live with a private host family in their sales area, sharing the cost of accommodations with two or three other dealers. The "most successful" students, as defined by the company, work 72+ hours per week throughout the summer. According to the company, in 2006 the average first-time sales program participant made a gross (before expenses) profit of $7944 over a three-month summer.

1 History
2 Summer Work Program
3 Products
4 Controversy
5 Newspaper & Magazine Articles
6 Affiliations
7 Noteworthy Alumni
8 References
9 External links

[edit] History

Southwestern Company, founded in 1855, is located in Nashville, Tennessee. The company's name was chosen because at that time Nashville was in the Southwestern part of the United States. The company was founded by Reverend James R. Graves, a Baptist minister.^[1] In 1867, Nashville fell to Union forces and Graves moved the company to Memphis, Tennessee. After the Civil War ended, Southwestern returned to Nashville and initiated programs of young people selling bibles and other books door-to-door.^[2]

In 1959, Spencer Hays, a young student at Texas Christian University, entered Southwestern's Summer Sales Program and would come to play a pivotal role in its future, becoming its president in 1973. In 1969, Southwestern was sold to the Times-Mirror Company. Jerry Heffel became the company's president in 1980. In 1982, Hays, Heffel and other Southwestern executives organized to purchase the company by leveraged buyout from Times-Mirror, forming Southwestern-Great American, Inc. Hays was named executive chairman of the board, a position he still holds, and Ralph Mosley was named chairman and CEO. The company remains privately held.^[1]

In the 70s, Southwestern started to expand its operations, starting with Great American Opportunities (fundraising for schools) in 1975 and then acquiring FRP, an award-winning cookbook publishing company, in 1978. In 1982, after gaining its independence, SBR (International Headhunting) was formed, followed by Family Heritage (supplemental insurance) in 1989.

Since 1999, Southwestern-Great American has partnered with, acquired or establish 10 other companies around the world, for a total of 16 companies within the corporate family. These companies' services range from non-profit fundraising to public speaking to consulting to financial services to insurance and real estate. Since regaining independence in 1982, Southwestern-Great American revenues have grown from $24 million to more than $280 million in wholesale sales.

In 2006, Ralph Mosley retired as CEO after nearly 25 years. He was succeeded by Henry Bedford.

In 2007, Jerry Heffel retired as President of the company. He was succeeded by Dan Moore.

[edit] Summer Work Program

Southwestern's summer work program, started in 1868, is the backbone of the Southwestern / Great American Corporation. In 1986, Southwestern ventured into the international market by opening up the Canadian division. Southwestern UK Ltd. was established in 1994 in Bristol, England. Southwestern now works with approximately 3000 students from 400 campuses in 57 countries each year. Students who participate in the program represent colleges and universities from the United States, Canada, Europe, South Africa, and South America.

Students participating in the Southwestern program are independent contractors, not employees, and as such run their own businesses during the summer months. The money that they earn is solely determined by their sales revenue and their expenses including the cost of goods sold. Southwestern Training School is provided, in Nashville or the UK, nominally free to student dealers. However, the students are responsible for the cost of their transportation and accommodation (i.e. housing, food, etc.) to and from training school.

Being independent contractors, the participants are not guaranteed any wages and are not provided any health insurance. The independent contractor model affords Southwestern two advantages. First Southwestern's financial risk is limited. Secondly, if one of the students breaks the law or is put in danger while on the job, they are responsible for their own actions because he/she is an independent contractor. As independent contractors, students pay their own travel and living expenses, but have the tax advantage that these are deductible from income. There is also a tax disadvantage, in that students must pay an additional 7.65 percent in Social Security and Medicare taxes to match the percentage normally paid to these agencies by an employer.

According to the company, the most successful student dealers work 72+ hours per week throughout the summer, and make 30 or more presentations each day of the six-day workweek. Hours apply to time actually spent in the field and do not include time spent on bookkeeping, talking to student managers or at sales meetings on Sunday. At the end of the summer, products sold are shipped by freight line to the student dealers, who re-visit each home where they made a sale, delivering the product and showing customers how to use it.

Although Southwestern recruiters make some attempt to portray the difficulties that student dealers face, they usually present them as obstacles which are surmountable. All students attend a week long sales school which includes training in how to address these issues if and when they should arise. However, some students entering the program may not be fully aware of the difficulties they will face and may not be adequately prepared to deal with them.

Safety awareness prevention and reaction is also taught in sales school, and female dealers have a separate meeting to cover common-sense safety precautions such as not entering homes unless the mother is present. Students are asked to check in with local authorities to advise them that they will be selling in the area for the summer, and to obtain solicitor's permits where one is required.^[3]

Some student salespeople are invited to return in subsequent years as student managers. Student managers recruit their own teams during the school year and earn a percentage commission on the sales of their team.

[edit] Products

Southwestern markets family-orientated reference books and software. The lead products (The Volume Library and Student Handbook) are educational reference books to help families with school work. Also in the product line are children's books (My Fun With Words dictionary, Explore & Learn children's encyclopedia, My Books, including shapes, colors, numbers, and words, and the Ask Me Why series) and software (titles include Clifford Reading, Sponge Bob Typing, math and science programs to help with different grade levels, College Prep including SAT and ACT practice). Customers have an option of receiving annuals to go with their Volume Library or Student Handbooks, and also the option for a book every other month.

[edit] Controversy

Controversy around the operations of the Southwestern Company center around its recruiting practices and the financial risk to students whose profits from sales do not substantially cover their expenses. Because students are independent contractors Southwestern expects students to fully finance their living expenses similar to any other career job. Southwestern does not pay for expenses like food, gas, or rent. Rent is typically 25-30 dollars per week for a student dealer during the summer living with a host family.^{[citation needed]} Foreign students in particular carry a major financial burden, as they must pay for their visas and airfare themselves.^[4]

It is common for students to have run-ins with local law enforcement. Local permits are reviewed prior to the summer by the company in order to legally sell products. Southwestern offers assistance in the event of permit issues. Students are encouraged to leave their cellphones at home to focus on the task at hand, but it is not required.^[4]

In the UK on the University of Durham's campus, the students' union had voted to ban Southwestern as a result of improper business actions.^[5] According to a report from a Southwestern representative, this ban had been lifted, but according to the referenced DSU Union Policy^[6] it is still in force.

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.^[7]

[edit] Newspaper & Magazine Articles

Full Articles

Partial Articles (membership required for complete article)

[edit] Affiliations

International Sites:

Southwestern is a member of

[edit] Noteworthy Alumni

Southwestern has over 125,000 living alumni worldwide. Some of the more publicly known figures are as follows:
Ken Starr - Former U.S. Special Prosecutor
Marsha Blackburn - U.S. Congress - TN
Max Lucado - International Best-Selling Christian Author
Jeff Sessions - U.S.Senator - AL
Rick Perry - Governor of Texas
Mac Anderson - founder and CEO of Successories
Jay Gelbart - Senior VP of Merill Lynch
Charlie Watkins - Founder of O'Charley's
Ronnie Musgrove - Former Governor of Mississippi