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Dear John,


Thanks for the speedy reply. Here are the answers, in order:


The hats are made in China, and I import them FOB Hong Kong. I ship the

fabric to my agent in Hong Kong.

***Has your supplier ever suggested he might get it the fabric cheaper/better
than you can?***

Re discounts: I don't have to pay shipping

from HK to the US, as I normally do for my domestic sales.

***Do you mean in the instance of these foreign orders, or do you mean ever?
To my mind one always pays for shipping from HK to US (importers always pay
inbound freight) and NEVER pay domestic delivery to customers...they pay. So
this sounds exactly backwards, depending on what you are saying.***

Also, my supplier

gives me a discount because they don't have to buy quota for shipping to the

US.

***Because it is usa-made fabric?***

The sale would be FOB Hong Kong to France or Germany, and the buyer

would be responsible for paying for shipping from HK to Europe.

***This you did not mention in your original email, and it is the simple
solution.***

Also, the

buyer asked for a discount, and I normally give a discount to anyone who

orders a large quantity. My definition of a large quantity is 500 pieces and

up. I do that because it is more efficient to ship a lot to one place than

to ship several small quantities to several different places. Plus my

production is cheaper if I order larger quantites.

***OK, sounds right, if true.***


"Importers Prepay" This is great news. So these guys will expect to prepay?

How soon before shipment?

***With an LC, as they receive the goods. Any other method, it depends. See
below...***


The rough dollar amount is $25,000 for the French, $12,500 for the German.


***sounds too high for Visa/mc...sounds like LC.***


What IS the "simple profitable solution?"

***Part A, you figured out. Ship directly from the supplier to the european
customer. Very good. Part B is to simply have the supplier bill the
european customer directly, not you. Then you completely avoid any problems
with payments, etc, and make money while you sleep. The price you charge the
europeans is the cost of goods (what you pay the supplier) plus your NET
profit.

Say you buy these hats first cost at $8 each, add $2 cost for importation,
and then wholesale in usa at $20 each. Your gross profit is $10, cost of
goods is $10. Then you take out all of your expenses, and say you net $3 per
hat net profit to you. Then direct the supplier in hong kong to simply sell
all of the hats he can at the price of ($8 cost + $3 net profit to you) = $11
to europeans. In fact, have him push these hats to every customer of his
worldwide at this price.

In this way, as mentioned, you make money while you sleep, and do not have
the hassle of letter of credits, etc.

Now, I am sure 2 concerns arise, why would he do this and how do I track him?
Apparently shipping directly he has already agreed to; so we are just
wondering why he will bill for us? Well, obviously he has the ability to
bill now, he does so with you. So you are just directing him to bill the
customer, not you. And he will do this becuase it is done all the time, it
is standard operating procedure.

And how do you track him for honesty? Well, is he a crook? Are you working
with someone who you suspect is dishonest? If so, why? If not, then trust
him. People in Germany and Hong Kong and Korea get rich delivering products
to specification on time at a fair price. Honesty is a given, and a minimum
requirement.

There is a added benefit... if your product ever becomes super successful,
this factory will have a vestd iinterest iin seeing no one knocks you off,
since if this happens it is money out of YOUR suppliers pocket. He will use
local methods to see to it no one rips off your design.

So the simple solution is to confirm this with your supplier, connect the
europeans and the supplier together, and then take a nap and make some money,
the same net profit you would have with none of the work and none of the risk.

The only other caveat is this $3 times X sales = income reportable to the
IRS, even though it is left overseas.***

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