Business
Lyceum
e-Letter
Practical Instruction in the Arts and Sciences of Making
Money
JANUARY 2000
Greetings & Salutations:
This month, I am going to give you answers to some of the burning questions
the Business Lyceum Attendees have asked over the past couple months.
Here they are ...
Yes ... maybe ... ask your daddy ... I don't know ... possibly ... ask
my wife ... who cares ... ask your mama ... No!
Hmmmm! That didn't take very long. -- Guess I'll have to try to
answer some of the harder questions, or you'll get an e-Letter with nothing in
it. -- So ...
Q: Business Lyceum Attendee Kyle
Fisher (KFisher301@aol.com) wrote:
"I'd like to call upon your expertise and years of experience ... I have
come across a manufacturer in China that manufactures a product that would
appeal to the market here in the U.S. -- Therefore, I contacted the mfr. and
expressed my interest to be an agent for them in the U.S. -- They responded
by saying that they welcomed my inquiry and that they are in fact, in need
of an agent for the U.S.
"What I want to do is get exclusive distribution rights for their product
in the U.S. -- Since I'm a novice at this, I would appreciate your
direction. What should my next step be?"
A: Since the manufacturer in China
has already expressed an interest in establishing an agent in the U.S., all
you have to do now is "negotiate" a deal with them.
If I were doing it (as I have before), my next step would be to write them
a letter; something like this ...
Dear Mr. (use the name of the person who responded to your inquiry):
Thank you for your kind response to my letter of (date).
In response to your letter of (date), my company would consider it an
honor to represent your product(s) in the U.S. (or, the U.S. & Canada;
or, North America) on an exclusive basis.
To that possible end, please provide us with your lowest possible
distributor prices, along with quantity breaks, quoted CIF (name your
nearest U.S. Port of Entry).
We have taken the liberty to enclose herewith a preliminary contract for
your consideration.
Thank you for your consideration. We are looking forward to hearing
from you at your earliest convenience.
Sincerely,
Along with the letter, enclose a contract for their consideration. -- You
may want to have your attorney assist you in creating the contract in the
proper legal form. -- The contact could be something like this ...
EXCLUSIVE SALES AGREEMENT
This AGREEMENT is made on the dates signed below, by and between (your
name) of (your address); hereinafter referred to as (your one-word name),
and (the Chinese company name) of (their address); hereinafter referred to
as (their one-word name):
WHEREAS (Chinese company) is the manufacturer of (name of product) and is
desirous of having said product distributed in the U.S. (or, the U.S. and
Canada; or North America); hereinafter referred to as "territory,î and,
WHEREAS (your company) is a distributor of such products in the above
stated "territory;"
IT IS AGREED by the parties above named, in consideration of the promises
and covenants hereinafter contained, as follows:
1. (Chinese company) grants to (your company) the exclusive sales
and distribution rights to (name the products) throughout the above
"territory.î
2. (Your company) agrees to diligently sell and distribute (name
the products) in accord with the terms and conditions of this agreement.
3. (Chinese company) agrees to turn over to (your company) any and
all orders and inquiries regarding stated product(s) it shall receive from
the "territory."
4. (Chinese company) will provide (your company) with all technical
data regarding the products; sales literature, brochures, catalogs, etc.
currently in use for the product(s); and any and all future improvements
(Chinese company) may develop relative to such product(s).
5. (Your company) agrees to buy the stated products exclusive from
(Chinese company) and refrain from marketing similar products in competition
with (Chinese company).
6. (Chinese company) agrees to maintain production capacity capable
of supplying the orders
produced by (your company).
7. (Your company) agrees to sell a minimum of XXX units (the
quantity of products you plan to sell) of (Chinese company) product(s)
during the first year of this agreement. Should (your company) not
sell XXX units within the first year, it shall be to the determination of
(Chinese company) whether or not this agreement shall be continued for
additional years. This agreement shall renew automatically for
additional years so long as a minimum of XXX units of the product are sold
each year. (Define what one unit of the product is to be.)
8. (Your company) shall have the sole discretion to determine the
methods of merchandising the products under this contract.
9. (Your company) has the unfettered right to, and may, assign its
rights and obligations under this agreement to a third party.
We, the undersigned, agree to the terms and conditions of this agreement
on the below written dates.
Signatures:
Note: Be sure the products you are going to be selling
can "legally" be imported into this country. -- At one time, in the mid-1960s,
I had the exclusive rights to sell a "Magnetic Therapy" machine from Japan in
the U.S. Only problem was, the F.D.A. forbid its import because of its
unfounded medical claims. -- Today ... over 30 years later ... Magnetic
Therapy has gained acceptance; without F.D.A. approval. So, check the
product out with the Department of Commerce before you agree to sell something
you can't legally import into the U.S.
Although I, personally, have used letters and agreements similar to the
above over the years, I went to the works written by the known
authority on Exclusive Distribution Rights ... the man the media call
"The Millionaire Maker" ... my dear friend, E. Joseph Cossman,
for most of the wording above (rather than digging through my own archives ...
it was easier to find a draft copy in Joe's course and edit it for you).
If you are really and truly interested in acquiring Exclusive
Distribution Rights to products ... and, more importantly learning how
to effectively market those products, once you have the exclusive rights
... do yourself a favor -- go to your local bookstore and buy any book you can
find by E. Joseph Cossman. Then again, if you wanna get the best of
Joe's material, go directly to his website at: http://www.cossman.com/ and take a
close look at his "Home Study Course" -- you'll be glad you did!
Q: Business Lyceum Attendee Sydney
Freeman (luxury@homemoneymax.com) wrote:
"I recently ordered and received your Finder's Fee course. -- I have one
question, though: where do I find possible deals besides WorldWide
Business Exchange? I read somewhere that the New York Times had lots
of possibilities. However, the editions down here don't include any
want ads. There aren't any on the Internet, either, except real estate
and cars. The same is true for The Wall Street Journal, etc."
A: If by "want" ads, you mean
"classified ads" in all categories, some of the best leads can be found in
the, classified sections of the various trade publications. -- For instance,
Industrial MarketPlace has countless listings for all kinds of
equipment and machinery ... both "available" and "wanted." -- Closeout
News has ads for every kind of closeout, surplus, overrun, and liquidated
products and merchandise.
Beyond those publications, you will find there is a trade publication for
almost any industry you can name ... even some of the illegal industries (like
the one for "Pot" growers). All you have to do is go to your public
library and peruse the various directories of publications.
Whether you are interested in agriculture, banking, fashion, retail or
wholesale merchandising, manufacturing, or whatever, you will find trade
publications dedicated to that field of endeavor.
The best approach is to go through the classifications in a directory of
publications and select a trade or industry, by category, in which you have an
interest or some experience. -- Choose the field of endeavor that interests
you and start reading the publications in that category.
On the other hand, if by "want" ads, you mean ads specifically "wanting"
something, you are going in the wrong direction.
As I told you in my Finder's Fee course, "Anything that can be bought
or sold can earn you a fee" - and - remember, it is easier to get a
seller; rather than a buyer, to pay a fee because the seller is getting paid
when the deal is done and is more likely to be willing to share some of the
money with you for finding the buyer.
To that end, build yourself a "personal catalog of contacts"
(sellers) who are willing to pay you a fee when you bring them a buyer. --
Then, and only then, are the "wanted" ads of real value to you.
By the way, the same holds true with most people who are getting involved
in "Exporting." -- They spend their time searching the "wanted" ads in
Export Leads, hoping they can find a product to export to a supposed
known buyer. -- What they should be doing is finding a manufacturing company
that isn't exporting its goods and then selling those goods to customers in
other countries ... referring to the "wanted" ads only to find buyers who are
interested in the goods they already have available.
Think about it this way ... A Real Estate Agent doesn't go looking for a
house for a buyer to buy. The agent goes looking for a buyer for a house
that is already listed with a commission agreement already signed.
As I have often said, over 90% of the people who become Finders actually
earn Finder's Fees - BUT - they never get paid; remaining amateurs. --
Those who have read and follow the step-by-step instructions in my Finder's
Fee Course get to be professionals by getting paid for the valuable
service they provide.
My Finder's Fee Course is available at http://www.BusinessLyceum.com/mdl.html
-- or -- at least read the FREE Report about earning Finder's Fees at
http://www.BusinessLyceum.com/lectures.html
Q: Business Lyceum Attendee Bob Archer
(bobarcher100@usa.net) wrote:
"Here are my questions. You may recall, I am an investor buying
loans, mortgages, notes and just about every kind of income stream that
there is out there. I help facilitate the sale of businesses and
properties by having the seller create a note with the buyer to carry the
balance after the down payment and then buy the note from the seller after
closing. Here's the question. I run into people who want to buy
bars and other unsecured businesses who can't get a loan from
anywhere. Do you know anyplace who makes unsecured business
loans? I have come across companies advertising compensating balance
loans where they buy a CD at the buyers bank to encourage the bank to make a
loan to the buyer. Is this legitimate? If yes, do you know any
reliable sources for that kind of loan you can refer me to? - Second
Question- how can I let people know that I buy military pensions,
business notes, real estate notes, annuities, lottery winnings,
etc.?"
A: The first thing you must accept
is that there is usually a reason why people who can't get a loan from
anywhere. can't get a loan anywhere. -- Best advice would be to just
drop'em like the hot-potato(e) they are and look for a more suitable buyer. --
I don't personally know anyone who makes unsecured business loans, although I
have seen some such loans advertised I have never followed-up to see whether
or not they are real.
As to the hocus-pocus compensating balance loans, they are legitimate - but
- when I was involved in the offshore banking industry I received a number of
requests from borrowers wanting to use the Certificate of Deposits from those
companies for collateral. -- Problem was the "bank" (or any other lender)
always ends up bearing the full exposure for such loans. -- So you can better
understand why, lemme 'splain ...
What a Compensating Balance Really Is!
If you've read anything about Compensating Balance Loans written by a wide
variety of business-fairy-tale-writers, you might honestly believe the myth
that ...
"If you deposit a sum of money in a bank as a Compensating Balance for a
business loan, you can borrow as much as five times that amount."
That isn't a Compensating Balance ... no matter how many times you may have
read or heard it.
A Compensating Balance is nothing more than money deposited in a bank ...
usually by another bank ... to give the receiving bank enough "cash" liquidity
(reserves) to make a loan that would be too large for the bank to make against
its current reserves. -- The Compensating Balance cannot, and does not, serve
as "collateral" for the loan.
If a bank will not approve your loan, the availability of a Compensating
Balance is useless. Because, the only reason the bank would either seek,
or accept, a Compensating Balance to make your loan would be if the bank
needed the reserve liquidity to do so.
Hey ... don't feel like a Lone Stranger, if you don't understand it.
I would venture to guess that not one person in 100,000 does ... even most
bankers; that's why the companies providing Compensating Balances are able to
snag a few deals each year and stay well-heeled. But, those same bankers
never do a second Compensating Balance Loan ... even though they still don't
know exactly why it didn't work.
In answer to your Second Question ...
Divide & Conquer
Like most business people, you are trying to get all the firepower you can
in one advertisement - but - to make your advertising most effective, divide
and conquer.
If I were you, I would run ads offering to "buy military pensions" in the
various Armed Forces magazines ... ads to "buy annuities" in the Senior
Citizens publications ... Ads to "buy Real Estate Notes" in Home Owner &
Real Estate magazines ... ads to "buy lottery winnings" in the Lottery &
Gambling magazines ... etc., etc., etc. -- Of course, the absolute best media
to pursue are "Newsletters" directed toward specific niche audiences.
Whether you know it or not, there are "newsletters" in just about every
niche market you can imagine. -- Select the ones directed to Retired Military,
Home Owners, Lottery Players & Gamblers, Real Estate Agents, Senior
Citizens, etc., etc., etc. -- Instead of sending them an "ad," send'em a "News
Release" about the specific financing service you can provide to their
readers. (You WILL be surprised at the results.)
You can usually find Newsletter Directories at your Public Library, or you
can buy the best newsletter directory on the market from -- Newsletter On
Newsletters, P.O. Box 311, Rhinebeck, NY 12572 -- (914) 876-2081 --
FAX: (914) 876-2561 -- It ain't cheap but its worth more than its
weight in gold.
Well ... that's it for this month. -- In order to make every issue
responsive to YOUR needs, please send me your questions; or tell me what
sources or resources you need to build your business; or give me any thoughts
you want to share with your fellow members.
Believe it or don't ... I ain't a mind-reader. -- If'n you doesn't tell me
what you need, I may never touch upon the information, sources or resources
you need.
This is your publication for you to use to your benefit ... I am just your
moderator.
Until next month, keep well ...
J.F. (Jim) STRAW
Question Answerer
Can you stump the old master? -- Betcha can't!
Over the past 40 years (man and boy), I have made bundles of money in
direct selling, service contracting, wholesale merchandising, entertainment (I
was a professional Trumpet player, vocalist & Radio Announcer), freight
forwarding, import/export, retail merchandising, warehousing, real estate,
electronics manufacturing, finder's fees, closeout merchandising, financial
brokerage, business consulting, steel fabrication, gold and coal mining,
offshore banking, mailorder, writing, and publishing. -- That being the case
...
No matter what business you're in ... whether you're just starting, well on
your way, or at the top of the heap ... I've probably been where you are, done
what you are doing. -- So ...
Anytime you have a question about 'how' to do something in your
business - or - if you have any comments about anything I've said in
issues of this e-Letter; or if you want to add your 2 cents worth ... just
"ask" me or "tell" me.
Send your Questions, Comments or 2 Cents Worth to ...
eletter@businesslyceum.com
with "Question" - "Comment" - or, "2 Cents Worth" in the
SUBJECT.
If I, personally, don't have an answer to any question you may ask, I will
contact some of the professionals in your field of endeavor (I will probably
know one or more personally) to get the real 'skinny' for you.
Thought For The Month!
"No question is so difficult to answer as that to which the
answer is obvious."
-- George Bernard Shaw
Making Money is FUN & EASY when you know how! Learning "how" is Fun & Easy too -- when you use the
... FREE Reports ... FREE Resources ... FREE Newsletter ... available from the "Business Lyceum."
Jim Straw's Business Lyceum