This is part two, part one yesterday...
On Nov 27, 2016, at 11:18 AM, J L wrote:
Hi John,
Appreciate you taking out the time to provide such a detailed feedback. The "Answer matrix" is amazing and very helpful.
• I actually liked the idea of having the LCL MOQ FOB listed on his website. It puts the supplier at ease in terms of transparency ( which you have been advocating all along ), they are still in charge of their product and will probably make them comfortable doing business with me. It's a win win situation for both parties
• I've cleaned up the concluding statements in the draft and also made the other changes you suggested. Please let me know how it looks?.
• I like "Brothers L". My brother's name is K’yo and I was also thinking of names like Kyoto or Tokyp by combining both. Though they sound more Japanese than Ghanian :). What do you think?
• By all means strip and edit this as an example if it helps.
Thanks,
J
On Nov 27, 2016, at 12:00 PM, J L wrote:
I've included "export" in the letter for specificity. Thanks!
• You're right. I checked the HTS for units and it is Kg. So then is the analysis correct?. The Specialty Snack chips, 1 packet is 5 OZ and cost ~ $5 (retail). For Mexico the average price is $4.55 per Kg!
***Right, mostly chips... at costco chips are about that... he might say, that's too cheap, you reply..
a. that includes the cheapest mass produced chips too, it's the average, so skews very low give the mass amount of bad chops going in...
b. the bigger the mass market, the bigger the specialty market too...
It's the trends that tell... ***
From point "b", should I initially be targeting Canada then in lieu of Mexico even though the average prices are lower?
JL
On Nov 27, 2016, at 12:09 PM, John Spiers wrote:
Hmmm... do either on either justification... just pick one narrative to start...
John
On Dec 2, 2016, at 1:03 AM, J L wrote:
Hi John,
Thanks for another fantastic session this Tuesday. I have mailed out the initial letter and wanted to be prepared just in case he calls me before our scheduled time this Tuesday. I have started a different email thread since we are on the next phase and also makes it easier.
So the "Answer matrix" from previous email ( At the end of this email & Thanks for that! ) is an initial Introduction of myself & a proposal on how we can mutually benefit by doing business together. Assuming he's interested, he'll either start getting into specificity then and there OR will want to think about it and get back to me OR will ask me on how I want to proceed [ I'm assuming you'll say "Right Now over the phone" ?? ]. Was hoping me you can give me some guidelines on the following details which I think will be fundamental to our discussions and If there's something else you think might come up in the discussion and is important, please let me know
MOQ
Will the owner provide this?. If I have to come up with MOQ, I have absolutely no idea on what would be the ideal "smallest rational possible" quantity or how to go about finding that out.
Manufacturer Price ( ExW) / My Commission
On his website, he has prices quoted for 1 & 2 packets. Price for 8 packets have a reduction of approximately 12.2%. Going by that assumption, I came up with price for 1024 packets [ Hypothetical MOQ ]. The store I bought them from sold it for $5.50/packet
• Now I know the reduction will stop at some point but am not sure what I can expect a reasonable price to be. As I'm writing this, I'm guessing you'll say that I should just take his price quote and get back with reliable and validated test data.
• Should I go with 10% commission as suggested in the class?.
packets
Pricereductionmatrix.xls
JL
On Dec 2, 2016, at 6:31 AM, John Spiers wrote:
On Dec 2, 2016, at 1:03 AM, J L wrote:
Hi John,
So the "Answer matrix" from previous email ( At the end of this email & Thanks for that! ) is an initial Introduction of myself & a proposal on how we can mutually benefit by doing business together. Assuming he's interested, he'll either start getting into specificity then and there
***Yes, and you're best answer is "I don't know... and it will be fun to find out..." (Will I have to change the packaging? Who in Mexico do you have in mind?)
A N D
No, I don't want or need an exclusive
Yes, you can say forget it... (except for the one, first LCL MOQ FOB)
Yes, you can fire me... because I am not your employee and don't have anything at riak but some time spent doing something interesting, trying out my learning...
OR will want to think about it and get back to me
*** All I need is weights and measures of say a pallet load, what price YOU want, where I can pick it up from you, and what would be the lead time, a month? Then you can think about my export offer, after you see it, is it something you want out there? Start your thinking then, when you have something solid to look at. If you say no, I'll be trying Bison Jerky next, but I like your product more. "***
MOQ
Will the owner provide this?. If I have to come up with MOQ, I have absolutely no idea on what would be the ideal "smallest rational possible" quantity or how to go about finding that out.
***Yes, must... they have one already for domestic sales, but yours may be bigger, but usually no more than a pallet load. You see on the template we need the weights and measures (H,L. W each and total) of the cartons, add the pallet height, and the price he wants to earn on the sale (ExW), and his delivery lead time, plus where he wants the goods picked up. You might just have a rough draft template of the LCL MOQ FOB form with those blanks highlighted to email him, so if he asks how you want to proceed, you can just email him that .pdf.
Smallest rational really gets to logistics cost; if you get 100% more product for 5% more logistics cost (FF will point this out), then yes, jack up the qty to make the offer more attractive, but no, never a full container load... two pallets is max for a test, and we are testing at this point in the export game. There is back and forth on the LCL MOQ FOB development. Measure twice, cut once.... remember, you are stuck with your lcl moq fob through 100 inquiries...***
Manufacturer Price ( ExW) / My Commission
On his website, he has prices quoted for 1 & 2 packets. Price for 8 packets have a reduction of approximately 12.2%. Going by that assumption, I came up with price for 1024 packets [ Hypothetical MOQ ]. The store I bought them from sold it for $5.50/packet
• Now I know the reduction will stop at some point but am not sure what I can expect a reasonable price to be. As I'm writing this, I'm guessing you'll say that I should just take his price quote and get back with reliable and validated test data.
****Precisement! You are testing prices too. The higher the better. You get data back from your effort, for future reference, iterations.***
• Should I go with 10% commission as suggested in the class?.
Yes.
His discount is probably an example of the folly of price cutting, he has no economies of scale to offer... it probably costs him close to your 64 box discount....
Just take his price and work with it...
And make sure you keep records of all of this activity with the potential supplier. You add this to your rolodex of your contacts in the international trade of specialty chips.
As usualy feel free to email...
This is fun...
John
Feel free to forward this by email to three of your friends.
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