On Aug 13, 2014, at 8:22 AM, S wrote:
Hey John, love the course and appreciate your brain...
1.Do I call myself ‘My Name Company” or simply “My Name” in the heading for the supplier / buyer correspondence?
***Either way works, but I’d use the “company” even in this research phase... but dont bother making a company yet..***
2. The cost of the pastries US retail are 7.49 per six pastries from prospective supplier. When/If they agree for me to be ‘agent’ for them in exporting to Mexico+ then what would be the best approach to maximize profit?
***I’d back off from the Maximize profit orientation, and switch to serve the customer... that way the profits will follow... you are in search and learn phase of exporting food...
You have two customers: the supplier for your services, the buyer for the pastries... you want to make as much money for both as you can...
The producer needs an export sale as easy and profitable as a domestic sale. So forget “agent” as a formal term, and think informal “agency” that is to say, since the supplier will not entertain direct exports, you are defacto the only soource for mexico... don’t go for legal “agency” or contracts... that “costs” your supplier too much...
The buyer wants to test new product trying to find a hit for his outlets... s you put together MOQ FOB in which you announce your price and show your commission. so usa retail is $1.25 each, and your price is 20 % off or $1.00 each Ex Warehouse... so you start adding on all of the costs to get these FOB Laredo, and note your, say, 10% commission. Of course the buyer will try to go around you, but as noted earlier, you are defacto sole agent.
When they buy with 10% fee to net, they know this is negotiable in future, if demand in mexico discovered by this importer warrants any future negotiaitons. nine of ten importers will find no need to negotiate since they will find no demand, on average. Youa re search and learn for the one who will find demand. ***
The average price for pastries to Mexico was 4.23 for 2013 and the global avg was 3.82. How do I determine the price given the circumstances.
***YOUR price is 10%. Nothing else matters. The trade data bird-dogged the most likely customer, and gave averages on prices paid. You ar ein spacialty, so you are further out the bell curve as to price...***
I have not solidified a MOQ FOB offer as I still need to work out variables. How would I seek a lower price (I know they would give a 20% discount on 6 pakckages)?
***Their prices are probably based on volume, so they just hand you a pricing sheet. You are not competing on price, so why do you need an special price? later, if and when a market is discovered, then volumes will become known, and you an quote a specific customer prices based on the volume price sheet.
now, aside from the market knowledge you uniquely acquire upon which you’ll be trading, you are also independently assessing other opportunities... eg, do you discover you might be useful making these pastries in mexico and exportign aroound the world from mexico?
The side point is, don’t put too much emphasis on what you are now seeing foggily since as your info becomes more fundamental through search and learn you may discover far more valuable role for you to play than you imagine yet...***
3. I am also trying to research the best FOB for it. The supplier is located in NW Iowa, I am in So. Florida. Could you give me some direction on that?
***If mexico is your #1 market, might as well be FOB Laredo, but if worldwide, FOB houston is OK...
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