Question regarding Fashion Retail

**palacetrad** · 06-05-2007 04:56 AM

Hi guys,

First of all I would like to say this is a great site and everybody here is so helpful

Lets say you heard from a source that a clothing company A from country A wanting to stock and sell clothings from country B.

Then U manage to find a Clothing Company from Country B who is interested in venturing into fashion and retail market in Country A.

How would you make a profit from this deal? introducing A to B

1. Commission?

2. Take the product from one company and sell it to another?

I hope i am not confusing everyone

Any suggestions is highly regarded.

cheers

**akula** · 06-05-2007 05:22 AM

Set up company C, buy stuff from B and sell to A

the non-cash purchase can be done with if you get a letter of intent signed by A and use it to get trade credit from B

**olani** · 06-05-2007 05:23 AM

Easy. You ask B for a commission if he deals with a company introduced by you. In this case, both parties (you and B) will sign a contract where it's written that if B makes a deal with A, which was introduced by you, you will take X amount as a commission.

**palacetrad** · 06-05-2007 05:32 AM

Originally Posted by akula

Set up company C, buy stuff from B and sell to A

the non-cash purchase can be done with if you get a letter of intent signed by A and use it to get trade credit from B

Hi akula,

I am a complete newbie here.
thanks for the reply.. what do you mean by letter of intent?

trade credit? as in if A sells then I will pay back B for his goods?

cheers

**palacetrad** · 06-05-2007 05:36 AM

Originally Posted by olani

Easy. You ask B for a commission if he deals with a company introduced by you. In this case, both parties (you and B) will sign a contract where it's written that if B makes a deal with A, which was introduced by you, you will take X amount as a commission.

Hi Olani thanks for the reply,

In order for me to get the commission,

Do i have to oversee the transaction?
Whats the best way to set this up?

Do I have to make sure the clothings gets to A as well ( shipping etc)

cheers

**olani** · 06-05-2007 05:46 AM

No, you are selling the contact. What I meant is that you are paid because you have developed a commercial relationship between A and B. This doesn't affect the amount of the transaction, the clothing or any other factors. You are not responsible of any part of the transaction (so don't worry if the clothings gets to A or not).
The only thing you have to do is being sure that they don't deal secretly, as it would infringe the contract between you and B. Once the first deal is done, you get your commission money and everything is finished.

**akula** · 06-05-2007 05:56 AM

Originally Posted by olani

No, you are selling the contact. What I meant is that you are paid because you have developed a commercial relationship between A and B. This doesn't affect the amount of the transaction, the clothing or any other factors. You are not responsible of any part of the transaction (so don't worry if the clothings gets to A or not).
The only thing you have to do is being sure that they don't deal secretly, as it would infringe the contract between you and B. Once the first deal is done, you get your commission money and everything is finished.

that's a finders fee

it's a possibility, but i wouldn't do it like that

**akula** · 06-05-2007 05:58 AM

Originally Posted by palacetrad

Hi akula,

I am a complete newbie here.
thanks for the reply.. what do you mean by letter of intent?

trade credit? as in if A sells then I will pay back B for his goods?

cheers

LOI: this is a letter from A saying "we'll buy the stuff if you can deliver"

Trade Credit: this is a term in your contract with B saying "You can have the goods now, buy you must pay us within 30 days"

**akula** · 06-05-2007 05:59 AM

Originally Posted by palacetrad

Do I have to make sure the clothings gets to A as well ( shipping etc)

this depends on what incoterm you're using in your contract with B
http://www.iccwbo.org/incoterms/id3043/index.html

**akula** · 06-05-2007 06:00 AM

Originally Posted by olani

The only thing you have to do is being sure that they don't deal secretly, as it would infringe the contract between you and B.

yes, this can be done by way of a non compete agreement with B

**palacetrad** · 06-05-2007 06:03 AM

Originally Posted by olani

No, you are selling the contact. What I meant is that you are paid because you have developed a commercial relationship between A and B. This doesn't affect the amount of the transaction, the clothing or any other factors. You are not responsible of any part of the transaction (so don't worry if the clothings gets to A or not).
The only thing you have to do is being sure that they don't deal secretly, as it would infringe the contract between you and B. Once the first deal is done, you get your commission money and everything is finished.

Hi olani,

So this is like a once off deal. The thing is I dont think that A and B can communicate well because of language barriers. A would still need me to keep the channels open.

But thanks for the idea.

How would you approach this akula?

cheers,

Thanks guys you have been very helpful

**akula** · 06-05-2007 06:21 AM

register company C, approach company A and and say "I'm looking to sell you what you want, but I need an assurance that you'll buy it. Please sign this LOI and give me a deposit".

then, approach company B and say "I'm looking to buy what you wanna sell. I want you to ship it to this adress but I can't pay you upfront. what I need is trade credit from you, for which I'll pay interest. as my collateral, please sign this Non Compete and accept my LOI with company A"

Company B sells you the stuff, it get's shipped to company A, you collect the balance from A, and pay the debt to B

that's how I'd do it because it's a sustainable arragement as opposed to a finders fee

**palacetrad** · 06-05-2007 06:39 AM

Originally Posted by akula

register company C, approach company A and and say "I'm looking to sell you what you want, but I need an assurance that you'll buy it. Please sign this LOI and give me a deposit".

then, approach company B and say "I'm looking to buy what you wanna sell. I want you to ship it to this adress but I can't pay you upfront. what I need is trade credit from you, for which I'll pay interest. as my collateral, please sign this Non Compete and accept my LOI with company A"

Company B sells you the stuff, it get's shipped to company A, you collect the balance from A, and pay the debt to B

that's how I'd do it because it's a sustainable arragement as opposed to a finders fee

thanks for the feedback akula,

How much would you sell to A for? 30% more of the price from B?

cheers

**jasaunders** · 06-05-2007 07:24 AM

I would not approach company B and offer to pay interest. There is no reason to. Depending on how your goods will be shipped (if intercontinental by boat it will be longer) you should try to negotiate Net 30 or Net 60 terms or even longer. Ideally, you should try to get a prepayment discount, depending on the time you may be able to pay and a reasonable discounted percentage. It is not uncommon to see 5% 10, Net 30 or 5% 20 Net 60.

The markup you charge is dependent on the market.

**akula** · 06-05-2007 07:52 AM

Originally Posted by jasaunders

I would not approach company B and offer to pay interest. There is no reason to. Depending on how your goods will be shipped (if intercontinental by boat it will be longer) you should try to negotiate Net 30 or Net 60 terms or even longer. Ideally, you should try to get a prepayment discount, depending on the time you may be able to pay and a reasonable discounted percentage. It is not uncommon to see 5% 10, Net 30 or 5% 20 Net 60.

The markup you charge is dependent on the market.

great points there, chief