Selling products or services that help poor people make ends meet is a trillion-dollar market. But is this good business or exploitation?
Common sense dictates that if you want to have a successful business, you should sell to customers who can afford to pay you. Typically, the more money customers have, the greater their ability to pay for goods and services. But a number of companies have taken that conventional wisdom and turned it on its head. Selling to the poor may be the greatest untapped business opportunity to date.
Who Exactly is “Poor”?
Poor is a relative term that varies greatly from country to country, even from city to city. The U.S. government defines it through the poverty threshold, which is the level of income needed to pay for basic goods and services like food and shelter. That threshold is currently $23,550 in annual income for a family of four and $11,490 in annual income for a single person. Living on that income might be challenging, but more than 40 million people are doing so.
Meanwhile, half of U.S. households earn less than the median income, which is $51,404 per year. For anyone who lives in a large or medium-sized city and has to pay a mortgage, taxes, tuition and health insurance, it’s often hard to make ends meet.
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