Forums: Discussions for entrepreneurs and small business.

Will a new biz model like this work?  I want to get out of the direct sales business and create a true partnership.

I operate www.toobeez.com & www.project-connect.net commercial websites. CCT is privately owned and operated.  The core product is Toobeez, a giant interactive building system that features many different uses.  US Patent 6,966,813 – Issued November 22, 2005

 

CCT currently sells direct and indirect through catalogs, retail stores, and many other websites. CCT  targets:

 Consumers w/ Expendable Income

 Camps / Recreation Centers

 Specialty Toy Stores

 Education Market at all Levels

 Corporate Training / Coaching

 Health & Therapy Markets

 

CCT’s new business model will allow us to only sell through our Business Partner network. This network will sell direct to the various markets in their respective states only.  

New Partners may sell CCT’s products direct & indirect through catalogs, retail stores, in-person, on their own website, and other websites.  We will hand over all of our current business relationships to the new Partner for their particular state.

 

Acquiring a State - Fees are based on 16 factors (population, # schools, # businesses, etc.)

1. A Sealed Bid Auction / let the market bear out...or a possible flat fee ($1,500 - $10,000)

2. Pay our monthly license fee ($45 to $3,000) based on the state.

 

Partner Benefits - We believe this is a true win / win.  

1. For the state owner there is not a large capital outlay compared to a franchise.  We have proved out our markets.

2. Partners purchase our products at actual cost + 10% from our manufacturer.

 

Example...

Cost $45. per 57 piece set

Wholesale $90. per 57 piece set to their Dropship account or retail store.

Standard Retail Price is $150 set (no discounting)

              

3. We will maintain inventory or the Partners may take possession / hold their inventory

4. We will dropship direct to Partner customers

5. We will maintain marketing efforts to direct traffic to the Partners

6. We will continue to develop innovative products for the Partners

7. We will allow Partners to copy our websites. Need: new domain name, shop cart and host.

 

CCT Benefits

1. Good cash infusion

2. Monthly revenue forecast w/ monthly fee

3. Earn 10% for each unit ordered

4. Earn 5.00 for each order shipped

 

I am not looking to sell anything here.  I need opinions and support.

 

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Regards,
Joe Donahue - Brand Manager
Toobeez Project-Connect
1204 Thomas Road
Wayne, PA 19087
610-975-0102
www.toobeez.com
www.project-connect.net

Joe,

Great products. Nice website, too. Cool idea.

I have a question about selling in each state territory where you say the new partners will be limited to their specific state. What if the partner in Arkansas sold to Wal-Mart? Wal-Mart distributes everywhere. How do you plan to handle large retailers like this? How would other partners feel about being cut out of big boy sales like Wal-Mart? Just wondering.  

R@

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Richard Arnold · Key Concept Writers · Business Communication: The "Key" To Success· Law of Attraction Blog · Life Ain`t Brain Surgery Blog

Thanks for the compliment. I do not think I have all the possible scenarios down, but I am thinking.

Possible Territory Conflicts

1. Partner in Arkansas sells to Wal-Mart for Global distribution:  As long as the product in the store is not discounted. This is not a likely scenario because our core consumer does not shop at this type of store.

 

2. Partner in California sells to an individual Wal-Mart store in California: Some chains do allow local purchasing.  As long as the product in the store is not discounted.

 

3. Partner in Delaware sells to a consumer who lives in Florida: This is sometimes going to be difficult to enforce. We will place on our territory map: REQUIRED - Order Your Products From The State Where The Products Are Being Shipped To”.

 

4. Licensee in California sells to a retail chain in Arizona:  Immediate forfeit of Partnership. Crossing state lines is not allowed.

 

5. Partner in Texas sets up a dropship arrangement with a website owner in Arizona: Immediate forfeit of License. Crossing state lines is not allowed.

 

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Regards,
Joe Donahue - Brand Manager
Toobeez Project-Connect
1204 Thomas Road
Wayne, PA 19087
610-975-0102
www.toobeez.com
www.project-connect.net