Questions

Hello all,

I recently read John's book and found it extremely useful. I'm in the
process of forming a business but I'm quite new to international trade or
business in general (my day job is an engineer) so I thought I would join
the group to learn more. I have a few questions that hopefully someone can
shed some light on but first let me share some background on my business
idea.

I have come up with a concept that I believe has the ability to be very
popular (maybe even insanely popular) in places like Australia and New
Zealand among other places. This concept is probably one of the most unique
and original ideas I've ever had in my life (at least as best as I can
tell). My research shows the idea to be essentially unique and various
Australians that I've shared the concept with agree it could be very
popular.

Following John's advice in his book I haven't registered any trademarks or
patents but I do have unregistered trademarks on various phrases and images
in the designs. There are various ways I have thought of that I can make
money using this concept however I've decided to start off with the easiest.
I have created various design images based on this concept that I plan to
use to create custom products such as T-Shirts, mousepads, coffee cups, beer
glasses, baseball caps, etc. These products will be marketed to both locals
and tourists via gift and souvenir stores and catalogs in Australia and then
eventually New Zealand. I'm considering three options. 1) I buy from
manufacturer and sell to retailers 2) I buy from manufacturer and sell to
importers 3) I partner with manufacturer and share revenue. Any comments on
the advantages/disadvantages of these three business structures?

My research shows that a mousepad with one of my designs should retail for
at least $10USD. In the USA mousepads with designs sell for $10-$15 but a
bit cheaper in Australia because of the exchange rate. Assuming a retail
price of $10USD means that I should sell them for $5 and be able to buy them
with a landed cost of about $2.50. However, in fact I can buy them with my
design from Taiwan for only $0.75 landed in Australia in quantities of 5000.


Why is the manufacturer's cost so much cheaper than the retail price? It
seems to mean either I can mark them up almost 7x and make insane profits or
use the standard 100% markup and then let the retailer make all the big
profit. So how do you recommend dealing with a situation where the
manufacturer's cost is so cheap compared to the retail price? If this
concept is truly unique and popular should I be able to make more than the
standard 100%. I just don't want to be too greedy and mess things up. Am I
missing anything in my analysis?

Any advice or comments would be greatly appreciated.

Thanks,
John Teel

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