Alibaba Export Question

5 replies
I've kinda reversed engineered alibaba. I have got 2 possible deals.
The first buyer wants 60,000mt rolling into 80,000-150,000mt a month for next 3 years. He sent me a signed LOI but he wants a performance bond and past proof of delivering. I know the global company can deliver but they are happy to prove it to him. He'll know they can once he knows the sellers name!
Buyer 2 wants 30,000mt rolling into 50,000mt a month for a year.
Just wondering the best way to protect my interests in any deal? Any expert thoughts?

Thanks
Rich
#alibaba #export #question
  • Profile picture of the author danysh
    I don't know if this is the right forum for this but from pas experience, it's not about the International company's ability to perform as it is for the potential buyer to be a real one, rather than a mediator trying to make some business online.
    Another thing for you to note - usually these Internet brokers are asking for ridiculously low prices for commodities that have a defined market value - especially with commodities that are usually handled by the "big boys" (Trafigura, Glencore etc') or on commodity exchanges - just check and double check the so called buyer.
    Good luck
    Danysh
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    • Profile picture of the author John Durham
      Originally Posted by danysh View Post

      I don't know if this is the right forum for this but from pas experience, it's not about the International company's ability to perform as it is for the potential buyer to be a real one, rather than a mediator trying to make some business online.

      @danysh, and Rich

      Actually overseas export selling is OFFLINE MARKETING much like cpa used to be when a pretty girl with paint on their face, or some guy wearing a Dr. Suess hat came up to you at a fairground and asked you fill out a form to enter for a free car...

      Advertising agencies get paid big commission to return these forms to companies like jenny craig, DELL and many othyers...

      There are lots of raffles for computers... "Raffles" are usually CPA marketing! Never thought of that didja?

      So these ad agencies pay kids like 40 bucks a day to go out and have people fill out forms in high traffic public areas and fulfill a "quota"...

      For newby models in small local modeling agencies its called "Promotional" work... you take it in betweeen gigs and casting calls.

      That used to be CPA, now its done online a LITTLE (compared to offline) and IMr's have claimed it as their own... Still "MOST" CPA is done through promotional modeling agencies, at fair grounds, concerts, in malls, on the street... in the offline world not online.

      In fact the Jenny Craig CPA opportunity has been around much longer than the link share affiliate program... So ALOT OF WHAT USED TO ONLY BE OFFLINE IS NOW ONLINE AND DESERVES ENERGY... The least of which is "Exporting".

      I think thats why Allen created an offline marketing forum. Because there is alot of hybrid mix in offline marketing.

      In the same way, selling overseas exports thanks to a few pioneers, is moving online into a hybrid marketing style which is exciting to me, because its the only opportunity I have ever seen onlone where a person could actually make a 100k commission over the internet.

      Exports is INTERNATIONAL BIG BIG BIG Business. And NOW you can do it online just like everything else!

      The biggest export forum ONLINE does 146 MILLION dollars per "DAY" exchanging hands on it. DAILY!! Pretty exciting. What other site does that besides ebay as far as customers interacting and transacting?

      Export has historically been the worlds NUMBER ONE millionaire making opportunity. Its one of the few things you could do to literally, REALLY become a multi millionaire OVERNIGHT

      Now its the BEST oppportunity online too! I for one sell TRUCKLOADS of stuff overseas ONLINE.

      So Yeah I think his question qualifies as offline marketing...

      NOW TO ANSWER RICH....

      I can say after listening to a teacher talk about the process the other day of making more major deals..., that really Richard a small one paragraph one page agreement can insure when you lock two big companies together, you get to sit back and collect commission for years to come with a feeling of relative security.

      To Quote DW "Make sure it states that you understand growth and that even though your commission starts at ten percent (I would make it 20 personally) on this 60K deal... that if they start doing more business, like doing 10 million dollars per year between each other, you are wlling for your commssion to incrementally go down to as low as 2% on a MILLION dollar deal,,, on a sliding scale based on BV, in order to do your part to make the deal work with their cash flow models for the long term.

      As he says, making 20-50k on a single export deal is cool even if your mark up is 50%, but when you lock two major companies together who have the potential of doing millions per year together in business... they look at PERCENTAGES" and hardly anything in their entire business takes up 10 or 20%...

      If they are paying you 2% on 10 mill per year, then you are an asset, they just pay you a couple hundred grand per year and you keep bringing new accts...

      However at the 10 mill level, if their profit and loss statements show 10% going out the door to a single man... it makes them want to cut you out... So ion a small liquidation deal 50k or less I'd say, mark it up as high as you want, but make sure that you help them understand that if the two companies start doing major business, then you are willing to take your role to help make it happen and incrementally decrease your commission.

      We should be able to say all of this in one paragrah on a one page agreement.

      I just learned this the other day myself... the way to get medium sized deals to go big is to nurture them and give your seller confidence that you dont intend to rake him over the coals for 50% on every deal if the situation grows. It encourages them to grow with you and feel better about the 50% they are paying you now on the small deal... Actually they arent paying you really, you are marking it up, but your one pager shows that you can be flexible if all parties want to grow together into an ongoing relationship.

      Just for those who says this isnt offline marketing...

      Then you go back to ALIBABA.com and start emailing more buyers and sellers!

      Originally Posted by danysh View Post

      Another thing for you to note - usually these Internet brokers are asking for ridiculously low prices for commodities that have a defined market value - especially with commodities that are usually handled by the "big boys" (Trafigura, Glencore etc') or on commodity exchanges - just check and double check the so called buyer.
      Good luck
      Danysh
      Liquidation, or distressed inventory is "UPSIDE DOWN'...

      Internet export brokers are not asking for low prices on product that has a defined value... they are asking for low prices on product that has been written off and cant be reintroduced to the sellers primary market, it has to be thrown away or sold off to secondary markets overseas...

      There are MANY kinds of brokers, not all deal in liquidation , some deal in straight up wholesale distributorship sales... I think this answer here show a clears misunderstanding of the market and that is a real broad generalization.

      Perhaps you have never spoken with a manufacturer who is about to BURN or Donate...1 million units of product to get it out of his warehouse...

      On any given day there are 100 companies in the US alone who are in that position and would gladly take 5 cents per unit instead of throw it away.

      I think you are confusing the term "Exports" with "Liquidations".

      Ps. That just gave me an idea to advise my friend to have his customers start filling out various CPA forms in his retail store at the counter, to increase retail sales at the counter. If each customer filled out a Jenny craig for or a form to register for a free computer, and the commission was 10 bucks per form... that could add hundreds per day in profit to the retail store.

      In fact it might be wise to have boxes all over the store in various locations whereby people can fill out different relevant forms and entries. THANKS RICH!!!!
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  • Profile picture of the author plester
    Originally Posted by Richard Tunnah View Post

    I've kinda reversed engineered alibaba. I have got 2 possible deals.
    The first buyer wants 60,000mt rolling into 80,000-150,000mt a month for next 3 years. He sent me a signed LOI but he wants a performance bond and past proof of delivering. I know the global company can deliver but they are happy to prove it to him. He'll know they can once he knows the sellers name!
    Buyer 2 wants 30,000mt rolling into 50,000mt a month for a year.
    Just wondering the best way to protect my interests in any deal? Any expert thoughts?

    Thanks
    Rich

    Rich,

    If you put together a simple 1 page contract as John suggests you can protect yourself and your commissions.

    Here's what David W had to say about that subject in a recent interview,


    One more point, make sure you include in your one page commission agreement your sensitivity to the need to modify the agreement if market conditions change. What this means is that you will be flexible. What you really want is for 2 big companies to start doing a lot of business because you brought them together. When they know you are flexible they won't spend a lot of time trying to work you out of their cost formula. For example, you may start at a 10 percent commission for a few containers and then submit to a 2 percent commission for 5 years. If you see 2 large companies ready to lock arms, then you had better be ready to cut your commission fast. You are much better off getting 2 percent of $10,000,000 then 10 percent of nothing


    I hope that helps you out somewhat.

    Paul
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  • Profile picture of the author Richard Tunnah
    Thanks Paul/John. That's great. I did consult my lawyer but he wasn't sure what the 'standard' agreement was for this business.

    Rich
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    • Profile picture of the author plester
      Richard,

      You can ask David if you're a member of John's Export Forum,he's kind of helping out with some of the teaching and questions there.

      Another option if you're not a member is to google banks that handle exports as most big banks have someone who knows exports in and out as they will back up a letter of credit.

      One more option is to check out prepaid legal,i've used them before and most likely will do so again.

      I hope this was of some help to you.


      Paul
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