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 Post subject: Establishing an agency
PostPosted: Tue Feb 12, 2019 1:15 pm 
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If you have a product that is gaining traction and you are approached to sell the agency for it how does this happen. Lets say for example that a meeting has been set for a weeks time and I have no idea how to go about this...
This product would be manufactured by myself.


Last edited by Sards on Mon Feb 18, 2019 1:22 pm, edited 1 time in total.

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 Post subject: Re: Selling an agency
PostPosted: Tue Feb 12, 2019 1:17 pm 
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As an avid watcher of Dragons Den, you take your earnings to date and multiply them by the biggest number you can think of.


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 Post subject: Re: Selling an agency
PostPosted: Tue Feb 12, 2019 1:19 pm 
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Just a question of drawing up an agency agreement and agreeing a commission rate, no? Unless I'm misunderstanding the proposal - 'selling' an agency is an odd way of putting it so maybe you're talking about something else. If it's making an agreement with a 3rd party that they sell your product, it's not difficult to arrange.


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 Post subject: Re: Selling an agency
PostPosted: Tue Feb 12, 2019 1:27 pm 
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Womack wrote:
Just a question of drawing up an agency agreement and agreeing a commission rate, no? Unless I'm misunderstanding the proposal - 'selling' an agency is an odd way of putting it so maybe you're talking about something else. If it's making an agreement with a 3rd party that they sell your product, it's not difficult to arrange.


That sounds dangerous to me...putting the future of your product in anothers hands.
I have absolutely no experience in this. I was approached over drinks regarding this matter by a third party on two occassions and now they have set a meeting to discuss a. The agency , 2. The rights.......

I suppose I would really have to wait to hear the proposal....just dont like going into a meeting blind.

Of course I am googling madly atm


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 Post subject: Re: Selling an agency
PostPosted: Tue Feb 12, 2019 1:31 pm 
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It doesn't have to be exclusive agency for one thing. You'd have to hear their proposal and then weigh up if it makes sense in terms of the commission you would pay versus your costs and the likelihood of sales growth if you remained the sole seller of the product. There are obviously lots of things to be decided in terms of responsibilities and logistics, ie do they handle transport, warehousing, export (if a factor) etc etc. Basically you need to find out what they are proposing and weigh it up. But this kind of arrangement is quite common so it does work for lots of companies.


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 Post subject: Re: Selling an agency
PostPosted: Tue Feb 12, 2019 1:33 pm 
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Womack wrote:
It doesn't have to be exclusive agency for one thing. You'd have to hear their proposal and then weigh up if it makes sense in terms of the commission you would pay versus your costs and the likelihood of sales growth if you remained the sole seller of the product. There are obviously lots of things to be decided in terms of responsibilities and logistics, ie do they handle transport, warehousing, export (if a factor) etc etc. Basically you need to find out what they are proposing and weigh it up. But this kind of arrangement is quite common so it does work for lots of companies.

:thumbup:

Before I panic I will wait and see the proposal


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 Post subject: Re: Selling an agency
PostPosted: Tue Feb 12, 2019 1:36 pm 
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Is this like a franchise where they will have the retail sales rights for the products?

IMO, you've got to sensibly delineate what those rights are - be it limited geographically or within a time period (and so on).

When a deal works well, repeat that process.


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 Post subject: Re: Selling an agency
PostPosted: Tue Feb 12, 2019 1:47 pm 
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Get a lawyer


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 Post subject: Re: Selling an agency
PostPosted: Tue Feb 12, 2019 3:45 pm 
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happyhooker wrote:
Get a lawyer


This.

Don't commit to anything in the meeting and just take lots of notes. Make it clear that nothing is binding.
Maybe even ask to record it on your phone so you have a record of what was said; sometimes these guys are slick and have done all kinds of calculations and will just start throwing numbers at you.
It can be a little overwhelming following their sums.

Crunch the numbers later in your own time.

If they make sense, take it to YOUR lawyer to draft an agreement. Don't skimp on this.


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 Post subject: Re: Selling an agency
PostPosted: Tue Feb 12, 2019 5:07 pm 
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it seems that someone sees a way to make himself some money out of your product

will you benefit at the same time?

how does his involvement effect your risk?

these are just basic questions - there are many others

happyhooker wrote:
Get a good lawyer


fixed


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 Post subject: Re: Selling an agency
PostPosted: Tue Feb 12, 2019 5:30 pm 
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Get the professionals in.

I am a Master Franchisee and know that working out the management of "rights" is an onerous and complex business.
Track what other guys like you have done and always, always reject the first suitor.
He'll be hungry for you when he gets you. :smug:


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 Post subject: Re: Selling an agency
PostPosted: Tue Feb 12, 2019 6:56 pm 
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Thanks guys...I have spent a lot of energy in the product to the point its become a passion. We have had competitors from Europe talking to us and a lot of referred business so its growing. I've tried to grow it slowly so it develops a pedigree so I wont rush into anything. It's my baby.


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 Post subject: Re: Selling an agency
PostPosted: Tue Feb 12, 2019 7:15 pm 
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Walk down your life path three years.
Turn round when you get there and look back to now.
Visualise the steps that you took in those three years.
Pick the steps to where you are that have no regret.


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 Post subject: Re: Selling an agency
PostPosted: Tue Feb 12, 2019 7:24 pm 
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Trostan wrote:
Walk down your life path three years.
Turn round when you get there and look back to now.
Visualise the steps that you took in those three years.
Pick the steps to where you are that have no regret.

Fûcking hippy


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 Post subject: Re: Selling an agency
PostPosted: Tue Feb 12, 2019 7:25 pm 
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Sards wrote:
Thanks guys...I have spent a lot of energy in the product to the point its become a passion. We have had competitors from Europe talking to us and a lot of referred business so its growing. I've tried to grow it slowly so it develops a pedigree so I wont rush into anything. It's my baby.


Hope your business isn’t those shitty tattoos you have

Also, I don’t really understand what selling and agency means in the OP - but if it’s something you already make and sell, make sure you have all your figures to hand like turnover , margin, fixed and variable costs, finance costs etc

When Carnegie sold his wee scrap metal and digging company, it was for the then outstanding 22 times net profit iirc, so if you made a million rand last year net profit, sell for 22m rand


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 Post subject: Re: Selling an agency
PostPosted: Wed Feb 13, 2019 9:03 am 
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Sards, are you selling this product on your current website?

Or is it something completely separate?


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PostPosted: Mon Feb 18, 2019 1:33 pm 
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On friday afternoon I diverted to a friend who has a very decent business and went to have a chat with him re this agency business.

He laid down the Guidlines for me.

Firstly the appointed needs to buy a stock shipment to show commitmemt.
There needs to be a decent draw showing that he is working to market the product.
Make it short term ( a year ) in case it fails.
Make sure that the margins are controlled ( 35 % GP ) so that its financially viable for the agent and the market.

so we met and discussed all these points and I was shown how it was planned on being marketed.

They are keen but I am now the stumbling block.
I would prefer to seperate it from my existing business but there are tax implications which need to be sorted out and my wife is preparing a proposal which will let us know how much it would cost to run a seperate entity. This is important to me. Its easy to become distracted if you keep everything inhouse and there are a lot of different things I would like to do to reduce the cost burden. At the same time we can establish what kind of quantities we will need to make it a viable venture which would finalise that part of the agreement..


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 Post subject: Re: Selling an agency
PostPosted: Mon Feb 18, 2019 1:39 pm 
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Sards wrote:
Thanks guys...I have spent a lot of energy in the product to the point its become a passion. We have had competitors from Europe talking to us and a lot of referred business so its growing. I've tried to grow it slowly so it develops a pedigree so I wont rush into anything. It's my baby.


Then get yourself a good lawyer with experience in agency/franchise contracts.....it will be money well spent.

Sorry just seeing your final post on this.... advice is the same get a good lawyer. Don't try to navigate this alone as it will cost you in the end.


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PostPosted: Mon Feb 18, 2019 2:23 pm 
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A very good lawyer is essential, and he’ll raise issues that you wouldn’t consider if you sat there forever. For instance, especially as this product is a personal passion, you will need to ensure that they are contractually obliged to protect the reputation of the brand through proper servicing, and dealing with any issues that arise promptly and efficiently. Nothing kills a product stone dead more effectively than indifferent service so be careful about checking out the reputation of your potential partners.


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PostPosted: Mon Feb 18, 2019 2:43 pm 
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Lenny wrote:
A very good lawyer is essential, and he’ll raise issues that you wouldn’t consider if you sat there forever. For instance, especially as this product is a personal passion, you will need to ensure that they are contractually obliged to protect the reputation of the brand through proper servicing, and dealing with any issues that arise promptly and efficiently. Nothing kills a product stone dead more effectively than indifferent service so be careful about checking out the reputation of your potential partners.

:thumbup:

this is a huge concern...


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PostPosted: Fri Mar 08, 2019 9:00 am 
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Ja well we have agreed on principle to give an exclusive agency to one of our agents...and he has identified another of our exclusive products that he wants the agency for too. He is setting up a whole marketing campaign using proffessionals where I will be attending just to give my input and be part of it. They will be taking over as administartors of the facebook page for the products and set up a seperate website. I have discussed this with our accountant and he seems dead against setting up a seperate entity because of the costs involved as well as the administrative problems of registering for VAT, applying for export licences etc. and I sort of agree with what he is saying. My concern was that if I decided to sell or close down our main operation I did not want it to be part of any agreement and I felt that it can become a seperate entity. He has assured me that any deal can be structured to exclude these products. Obviously our lawyers will handle the agreement. So its full steam ahead...exciting times


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PostPosted: Fri Mar 08, 2019 9:04 am 
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Thought you'd fvcked off for good. Bulls Sharks thread please.


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PostPosted: Fri Mar 08, 2019 9:30 am 
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:lol:


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