Home – New Forums Logistics Setting up a Distributer

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  • #988427
    Elle07
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    Hi all, we are a small online business selling surf accessories and hardware, launched 4 months ago and are beginning to receive inquiries from overseas distributors. Before we proceed with any discussions, is there a general rule of thumb for discounting? And what should I expect to see from the distributor? I.e. Marketing plans etc?
    Any other insights in regards to terms and contracts would be wonderful, somewhat unsure what to expect and would love to hear from those already experienced in this process.

    #1167095
    MissSassy
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    I suggest you speak with another member here http://www.legalvision.com.au and make sure you have the right contracts in place before you agree to having anyone as a distributor of your product.

    #1167096
    Jenny Spring
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    Elle07, post: 193534 wrote:
    Hi all, we are a small online business selling surf accessories and hardware, launched 4 months ago and are beginning to receive inquiries from overseas distributors. Before we proceed with any discussions, is there a general rule of thumb for discounting? And what should I expect to see from the distributor? I.e. Marketing plans etc?
    Any other insights in regards to terms and contracts would be wonderful, somewhat unsure what to expect and would love to hear from those already experienced in this process.
    Congrats.
    I’d urge you to get your Australian operation in order before you jump into overseas.

    That said, I’d suggest you send through 5-7 questions that give you detailed information on who they are, what their market is, who else they represent etc. then set up a Skype to meet them.

    This will knock most of them out, and save you a lot of time.

    Getting o/seas distributors on board is costly, and as you are in the early days of your business be careful.

    Usually you will provided them with wholesale prices, payment upfront, they cover FOB and import duties. Don’t give them exclusivity until they’ve earned it through order volume and frequency.

    Jenny

    #1167098
    Elle07
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    Jenny Spring, post: 193811 wrote:
    Congrats.
    I’d urge you to get your Australian operation in order before you jump into overseas.

    That said, I’d suggest you send through 5-7 questions that give you detailed information on who they are, what their market is, who else they represent etc. then set up a Skype to meet them.

    This will knock most of them out, and save you a lot of time.

    Getting o/seas distributors on board is costly, and as you are in the early days of your business be careful.

    Usually you will provided them with wholesale prices, payment upfront, they cover FOB and import duties. Don’t give them exclusivity until they’ve earned it through order volume and frequency.

    Jenny

    Hi Jenny,

    Thanks for the reply, yes we’re in no rush but I thought it would be good to look into the process sooner rather than later. The suggestion in terms of 5-7 questions sounds quite helpful in terms of screening, thanks.
    I know you mentioned it can be quite costly, what aspect of the process is typically costly? By this do you mean putting the legal contracts in place?
    Wholesale pricing, payment upfront, the distributer to cover FOB and import costs, and non-exclusivity was what I had in mind as well… But I’m failing to see why this would be costly. You’re not the only one to mention this though so any clarity would be great.

    Sarah

    #1167099
    Jenny Spring
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    Elle07, post: 193864 wrote:
    Hi Jenny,

    Thanks for the reply, yes we’re in no rush but I thought it would be good to look into the process sooner rather than later. The suggestion in terms of 5-7 questions sounds quite helpful in terms of screening, thanks.
    I know you mentioned it can be quite costly, what aspect of the process is typically costly? By this do you mean putting the legal contracts in place?
    Wholesale pricing, payment upfront, the distributer to cover FOB and import costs, and non-exclusivity was what I had in mind as well… But I’m failing to see why this would be costly. You’re not the only one to mention this though so any clarity would be great.

    Sarah
    It is costly in this way.

    You get a good order from overseas. You fill it. There is a problem with the goods, or a problem with the delivery, or an unforseen typhoon or something you’ll never predict.

    The distributor wants their money back. And they want you to pay for the return of the goods.

    So now you are stuck with the cost of delivery back to the factory, the refund of hte money to the distributor.

    The factory won’t do a refund, or maybe they might do a credit, but they won’t cover the cost of shipping in two directions.

    That is why you want to get consistent reliable deliveries into your own home country first, before you try to replicate overseas.

    When I imported for 10 years (and I ran 3 distributors – UK, USA, + Sydney – -I’m in Perth), all of these unthinkable things happened. One big order can actually send you bankrupt before you know it.

    Crawl first.

    And take my wholesaling course.

    Be good here first. Then branch overseas like many of my customers have with foresight and wisdome.

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