Business Lyceum
e-Letter
Practical
Instruction in the Arts and Sciences of Making Money
JANUARY 2000
Greetings & Salutations:
This month, I am going to give you answers to some of the
burning questions the Business Lyceum Attendees have asked over
the past couple months. Here they are ...
Yes ... maybe ... ask your daddy ... I don't know ... possibly
... ask my wife ... who cares ... ask your mama ... No!
Hmmmm! That didn't take very long. -- Guess I'll have
to try to answer some of the harder questions, or you'll get
an e-Letter with nothing in it. -- So ...
Q: Business Lyceum Attendee
Kyle Fisher wrote:
"I'd like to call upon your expertise and years of experience
... I have come across a manufacturer in China that manufactures
a product that would appeal to the market here in the U.S. --
Therefore, I contacted the mfr. and expressed my interest to
be an agent for them in the U.S. -- They responded by saying
that they welcomed my inquiry and that they are in fact, in need
of an agent for the U.S.
"What I want to do is get exclusive distribution rights
for their product in the U.S. -- Since I'm a novice at this,
I would appreciate your direction. What should my next step be?"
A: Since the manufacturer
in China has already expressed an interest in establishing an
agent in the U.S., all you have to do now is "negotiate"
a deal with them.
If I were doing it (as I have before), my next step would
be to write them a letter; something like this ...
Dear Mr. (use the name of the person who responded to your
inquiry):
Thank you for your kind response to my letter of (date).
In response to your letter of (date), my company would consider
it an honor to represent your product(s) in the U.S. (or, the
U.S. & Canada; or, North America) on an exclusive basis.
To that possible end, please provide us with your lowest possible
distributor prices, along with quantity breaks, quoted CIF (name
your nearest U.S. Port of Entry).
We have taken the liberty to enclose herewith a preliminary
contract for your consideration.
Thank you for your consideration. We are looking forward
to hearing from you at your earliest convenience.
Sincerely,
Along with the letter, enclose a contract for their consideration.
-- You may want to have your attorney assist you in creating
the contract in the proper legal form. -- The contact could be
something like this ...
EXCLUSIVE SALES AGREEMENT
This AGREEMENT is made on the dates signed below, by and between
(your name) of (your address); hereinafter referred to as (your
one-word name), and (the Chinese company name) of (their address);
hereinafter referred to as (their one-word name):
WHEREAS (Chinese company) is the manufacturer of (name of
product) and is desirous of having said product distributed in
the U.S. (or, the U.S. and Canada; or North America); hereinafter
referred to as "territory,î and,
WHEREAS (your company) is a distributor of such products in
the above stated "territory;"
IT IS AGREED by the parties above named, in consideration
of the promises and covenants hereinafter contained, as follows:
1. (Chinese company) grants to (your company) the exclusive
sales and distribution rights to (name the products) throughout
the above "territory.î
2. (Your company) agrees to diligently sell and distribute
(name the products) in accord with the terms and conditions of
this agreement.
3. (Chinese company) agrees to turn over to (your company)
any and all orders and inquiries regarding stated product(s)
it shall receive from the "territory."
4. (Chinese company) will provide (your company) with
all technical data regarding the products; sales literature,
brochures, catalogs, etc. currently in use for the product(s);
and any and all future improvements (Chinese company) may develop
relative to such product(s).
5. (Your company) agrees to buy the stated products
exclusive from (Chinese company) and refrain from marketing similar
products in competition with (Chinese company).
6. (Chinese company) agrees to maintain production capacity
capable of supplying the orders
produced by (your company).
7. (Your company) agrees to sell a minimum of XXX units
(the quantity of products you plan to sell) of (Chinese company)
product(s) during the first year of this agreement. Should
(your company) not sell XXX units within the first year, it shall
be to the determination of (Chinese company) whether or not this
agreement shall be continued for additional years. This
agreement shall renew automatically for additional years so long
as a minimum of XXX units of the product are sold each year.
(Define what one unit of the product is to be.)
8. (Your company) shall have the sole discretion to
determine the methods of merchandising the products under this
contract.
9. (Your company) has the unfettered right to, and may,
assign its rights and obligations under this agreement to a third
party.
We, the undersigned, agree to the terms and conditions of
this agreement on the below written dates.
Signatures:
Note: Be sure the products you are going
to be selling can "legally" be imported into this country.
-- At one time, in the mid-1960s, I had the exclusive rights
to sell a "Magnetic Therapy" machine from Japan in
the U.S. Only problem was, the F.D.A. forbid its import
because of its unfounded medical claims. -- Today ... over 30
years later ... Magnetic Therapy has gained acceptance; without
F.D.A. approval. So, check the product out with the Department
of Commerce before you agree to sell something you can't legally
import into the U.S.
Although I, personally, have used letters and agreements similar
to the above over the years, I went to the works written by the
known authority on Exclusive Distribution Rights ... the
man the media call "The Millionaire Maker" ...
my dear friend, E. Joseph Cossman, for most of the wording
above (rather than digging through my own archives ... it was
easier to find a draft copy in Joe's course and edit it for you).
If you are really and truly interested in acquiring Exclusive
Distribution Rights to products ... and, more importantly
learning how to effectively market those products, once
you have the exclusive rights ... do yourself a favor -- go to
your local bookstore and buy any book you can find by E. Joseph
Cossman. Then again, if you wanna get the best of Joe's
material, go directly to his website at: http://www.cossman.com
and take a close look at his "Home Study Course" --
you'll be glad you did!
Q: Business Lyceum Attendee
Sydney Freemanwrote:
"I recently ordered and received your Finder's Fee course.
-- I have one question, though: where do I find possible
deals besides WorldWide Business Exchange? I read somewhere
that the New York Times had lots of possibilities. However,
the editions down here don't include any want ads. There
aren't any on the Internet, either, except real estate and cars.
The same is true for The Wall Street Journal, etc."
A: If by "want"
ads, you mean "classified ads" in all categories, some
of the best leads can be found in the, classified sections of
the various trade publications. -- For instance, Industrial
MarketPlace has countless listings for all kinds of equipment
and machinery ... both "available" and "wanted."
-- Closeout News has ads for every kind of closeout, surplus,
overrun, and liquidated products and merchandise.
Beyond those publications, you will find there is a trade
publication for almost any industry you can name ... even some
of the illegal industries (like the one for "Pot" growers).
All you have to do is go to your public library and peruse the
various directories of publications.
Whether you are interested in agriculture, banking, fashion,
retail or wholesale merchandising, manufacturing, or whatever,
you will find trade publications dedicated to that field of endeavor.
The best approach is to go through the classifications in
a directory of publications and select a trade or industry, by
category, in which you have an interest or some experience. --
Choose the field of endeavor that interests you and start reading
the publications in that category.
On the other hand, if by "want" ads, you mean ads
specifically "wanting" something, you are going in
the wrong direction.
As I told you in my Finder's Fee course, "Anything
that can be bought or sold can earn you a fee" -
and - remember, it is easier to get a seller; rather than a buyer,
to pay a fee because the seller is getting paid when the deal
is done and is more likely to be willing to share some of the
money with you for finding the buyer.
To that end, build yourself a "personal catalog of
contacts" (sellers) who are willing to pay you a fee
when you bring them a buyer. -- Then, and only then, are the
"wanted" ads of real value to you.
By the way, the same holds true with most people who are getting
involved in "Exporting." -- They spend their time searching
the "wanted" ads in Export Leads, hoping they
can find a product to export to a supposed known buyer. -- What
they should be doing is finding a manufacturing company that
isn't exporting its goods and then selling those goods to customers
in other countries ... referring to the "wanted" ads
only to find buyers who are interested in the goods they already
have available.
Think about it this way ... A Real Estate Agent doesn't go
looking for a house for a buyer to buy. The agent goes
looking for a buyer for a house that is already listed with a
commission agreement already signed.
As I have often said, over 90% of the people who become Finders
actually earn Finder's Fees - BUT - they never get paid;
remaining amateurs. -- Those who have read and follow the step-by-step
instructions in my Finder's Fee Course get to be professionals
by getting paid for the valuable service they provide.
Read the FREE Report about earning Finder's
Fees at lectures.html
Q: Business Lyceum Attendee
Bob Archer wrote:
"Here are my questions. You may recall, I am an
investor buying loans, mortgages, notes and just about every
kind of income stream that there is out there. I help facilitate
the sale of businesses and properties by having the seller create
a note with the buyer to carry the balance after the down payment
and then buy the note from the seller after closing. Here's
the question. I run into people who want to buy bars and
other unsecured businesses who can't get a loan from anywhere.
Do you know anyplace who makes unsecured business loans?
I have come across companies advertising compensating balance
loans where they buy a CD at the buyers bank to encourage the
bank to make a loan to the buyer. Is this legitimate?
If yes, do you know any reliable sources for that kind of loan
you can refer me to? - Second Question- how can I let
people know that I buy military pensions, business notes, real
estate notes, annuities, lottery winnings, etc.?"
A: The first thing
you must accept is that there is usually a reason why people
who can't get a loan from anywhere. can't get a loan anywhere.
-- Best advice would be to just drop'em like the hot-potato(e)
they are and look for a more suitable buyer. -- I don't personally
know anyone who makes unsecured business loans, although I have
seen some such loans advertised I have never followed-up to see
whether or not they are real.
As to the hocus-pocus compensating balance loans, they are
legitimate - but - when I was involved in the offshore banking
industry I received a number of requests from borrowers wanting
to use the Certificate of Deposits from those companies for collateral.
-- Problem was the "bank" (or any other lender) always
ends up bearing the full exposure for such loans. -- So you can
better understand why, lemme 'splain ...
What a Compensating Balance Really Is!
If you've read anything about Compensating Balance Loans written
by a wide variety of business-fairy-tale-writers, you might honestly
believe the myth that ...
"If you deposit a sum of money in a bank as a Compensating
Balance for a business loan, you can borrow as much as five times
that amount."
That isn't a Compensating Balance ... no matter how many times
you may have read or heard it.
A Compensating Balance is nothing more than money deposited
in a bank ... usually by another bank ... to give the receiving
bank enough "cash" liquidity (reserves) to make a loan
that would be too large for the bank to make against its current
reserves. -- The Compensating Balance cannot, and does not, serve
as "collateral" for the loan.
If a bank will not approve your loan, the availability of
a Compensating Balance is useless. Because, the only reason
the bank would either seek, or accept, a Compensating Balance
to make your loan would be if the bank needed the reserve liquidity
to do so.
Hey ... don't feel like a Lone Stranger, if you don't understand
it. I would venture to guess that not one person in 100,000
does ... even most bankers; that's why the companies providing
Compensating Balances are able to snag a few deals each year
and stay well-heeled. But, those same bankers never do
a second Compensating Balance Loan ... even though they still
don't know exactly why it didn't work.
In answer to your Second Question ...
Divide & Conquer
Like most business people, you are trying to get all the firepower
you can in one advertisement - but - to make your advertising
most effective, divide and conquer.
If I were you, I would run ads offering to "buy military
pensions" in the various Armed Forces magazines ... ads
to "buy annuities" in the Senior Citizens publications
... Ads to "buy Real Estate Notes" in Home Owner &
Real Estate magazines ... ads to "buy lottery winnings"
in the Lottery & Gambling magazines ... etc., etc., etc.
-- Of course, the absolute best media to pursue are "Newsletters"
directed toward specific niche audiences.
Whether you know it or not, there are "newsletters"
in just about every niche market you can imagine. -- Select the
ones directed to Retired Military, Home Owners, Lottery Players
& Gamblers, Real Estate Agents, Senior Citizens, etc., etc.,
etc. -- Instead of sending them an "ad," send'em a
"News Release" about the specific financing service
you can provide to their readers. (You WILL be surprised
at the results.)
You can usually find Newsletter Directories at your Public
Library, or you can buy the best newsletter directory on the
market from -- Newsletter On Newsletters, P.O. Box 311, Rhinebeck,
NY 12572 -- (914) 876-2081 -- FAX: (914) 876-2561
-- It ain't cheap but its worth more than its weight in gold.
Well ... that's it for this month. -- In order to make every
issue responsive to YOUR needs, please send me your questions;
or tell me what sources or resources you need to build your business;
or give me any thoughts you want to share with your fellow members.
Believe it or don't ... I ain't a mind-reader. -- If'n you
doesn't tell me what you need, I may never touch upon the information,
sources or resources you need.
This is your publication for you to use to your benefit ...
I am just your moderator.
Until next month, keep well ...
J.F. (Jim) STRAW
Question Answerer
Can you stump the old master? -- Betcha can't!
Over the past 40 years (man and boy), I have made bundles
of money in direct selling, service contracting, wholesale merchandising,
entertainment (I was a professional Trumpet player, vocalist
& Radio Announcer), freight forwarding, import/export, retail
merchandising, warehousing, real estate, electronics manufacturing,
finder's fees, closeout merchandising, financial brokerage, business
consulting, steel fabrication, gold and coal mining, offshore
banking, mailorder, writing, and publishing. -- That being the
case ...
No matter what business you're in ... whether you're just
starting, well on your way, or at the top of the heap ... I've
probably been where you are, done what you are doing. -- So ...
Anytime you have a question about 'how' to do something
in your business - or - if you have any comments about
anything I've said in issues of this e-Letter; or if you want
to add your 2 cents worth ... just "ask" me or "tell"
me.
Send your Questions, Comments or 2 Cents Worth to ...
with "Question" - "Comment" -
or, "2 Cents Worth" in the SUBJECT.
If I, personally, don't have an answer to any question you
may ask, I will contact some of the professionals in your field
of endeavor (I will probably know one or more personally) to
get the real 'skinny' for you.
Thought For The Month!
"No question is so difficult to answer
as that to which the answer is obvious."
-- George Bernard Shaw
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Copyright - 2000, J.F. (Jim) Straw. All rights reserved.