NOVEMBER 2011
Greetings & Salutations:
Q: A Business Lyceum Attendee
once asked me ...
"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 (may he rest in peace),
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!
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
Grande Panjandrum
Can you stump the old master? --
Betcha can't!
Over the past 50 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.
Note: If you want to ask a question anonymously
just tell me so when you send in the question. -- Nobody but
you and I will know who asked the question.
Copyright - 2011, J.F. (Jim) Straw. All rights reserved.