Agent fees

Re: [spiers] Agent fees


In a message dated 11/23/04 9:02:27 PM, tiananmentrading@aol.com writes:

<< I manufacture my own baby clothing line (in China), and
am selling to specialty stores here (thanks to your book and great guidance
I'm trying to compete on design!). One interesting thing that has evolved is
some US companies of decent size like my product quality/prices and have
asked me
to source baby blankets/clothing for them under their private label... I
guess I'm their sourcing "agent" with some consulting and design thrown in
too.
I'm currently working on 3 projects and getting good feedback about the
samples
but....

I have no idea how to be an "agent", what percentage fee to charge, or what
paperwork to draw up? Any input from the group would be great! >>

***A few preliminary remarks and then I will answer your question...

Success piles on success, and this is why I urge people to get their biz
going, even if it is $1000 a year... to start... (bill gates first year was
$16,000 - steve jobs was $776,000... what you do your first year is no
indication of
anything...) Once you get started, then people come to you with more and
more offers. What you are experiencing is fairly common...

What they see is you are capable. And they want to hire you to do what they
CAN do themselves. But the cost of detailing one of their very expensive
people to this taks is far more than hire you to do it. The companies that
approach you have employees that cost them, all-in, say $100 an hour when you
consider the office space, travel, heat , lights, insurance pay, on and on
devote
to that employee... further, there is opportunity cost... if that $100 an hour
employee generates $500 an hour in sales, to redirect that employee to
fiinding blankets is to lose that $500 and hour for however many hours. I
exaggerate to make my point, but I think you get it...

Coming to you is a great deal from these peoples ppoint of view..they get
your proven expertise, and what will most likely be a very good price... but
understand that they want something very small... (private label blankets) and
your job is to value your highly. lock in your mind this small effort is a
tremendous benefit to them... what is a super premium to you is just a good deal
to them.

therefore, think in terms of say $250 an hour for any work you do... or add
your net profit as a percent to the cost... say you make 10% net, and you will
not touch the goods (straight from factory to customer)... then offer them
base price plus 10%.

Or, the best way to earn the super premium, is to introduce the supplier and
buyer with an agreement that the supplier will deposit 5% of FOB value into an
account of yours in the suppliers country. if the price to you is $1.00,
then the price to the private label buyer, who is buying direct is $1.05. the 5
cents is yours... This may seem the smallest amount, but it is the most super
premium, cuz you make money for doing extremely little and you make it while
you sleep...plus you have mad money overseas when you visit there... and you
are not taken away from what you are successfully doing...

now one more thing... your private thinking on all these deals should be
"no, I won't do it..." The compliment of asking you to do more is because you
are doing well... don't stop doing well to help someone else... this only costs
you... so think negatively about these offers, a skeptical frame of mind will
help make sure you charge that super premium, and will keep people from taking
advantage of you. Also, if the deal does not work out, well, you we never
too sure about it anyway. I am not sayiing be rude to the buyers or not to do
the deal, just make sure it makes you lots of money... and as a pratical matter
skepticism helps keep one balanced when these exciting deals are offered.
there are some wicked retailers out there who take advantage of small biz people
by turning fresh successful importers into unpaid employees...if they won't
pay you, then dont do the work.

Hope this makes sense...

John

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Agent fees

Hi John,
How are you doing? Hi to Seattle!

I have a question... I manufacture my own baby clothing line (in China), and
am selling to specialty stores here (thanks to your book and great guidance
I'm trying to compete on design!). One interesting thing that has evolved is
some US companies of decent size like my product quality/prices and have asked
me
to source baby blankets/clothing for them under their private label... I
guess I'm their sourcing "agent" with some consulting and design thrown in too.
I'm currently working on 3 projects and getting good feedback about the samples
but....

I have no idea how to be an "agent", what percentage fee to charge, or what
paperwork to draw up? Any input from the group would be great!

Thanks!!
Mary Morrison

Coral Gables, Florida

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