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HELP, European co wanting exclusivity??

    • 6 posts
    December 5, 2009 11:19 AM EST

    My product is Shrinkins. I sell on line in the USA and want companies to beable to buy it wholesale and retail it themselves. Ultimatley I want to license it to a manufacturer.

    I am not sure what to do, a European company wants to distribute my product in Europe. He wants to be exclusive, so he is the big cheese, and can sell to other distributers..

    So would I make him pay me a sum for being exclusive and then wholesale a certain qty to him?

    Would I just require a very big order or require him to buy a certain amount every six months to be able to keep being able to have the exclusivity?

    Should I just license it to him?I'm not sure he'd want to... although I only have a patent pending in the USA, so I have no idea how that would work or even if I had anything to license him since it isn't in the USA.

     ... here is what he is asking me. Any help or ideas are GREATLY appreciated.

    One area he wrote: We are only 4 years old, are smaller but we have a network of dealers and two independant sales reps. When we take on a new product we look for two things, branding and exclusivity. We require at least one and desire both. What I would prefer is to buy from you, sell worldwide but have exclusivity for Europe. That is, hopefully you do not have your brand name on the product, so we can rebrand it with our brand name. Then, we will try to develop our brand of Shrinkins. And we would prefer to have exclusivity for Europe.

    We sell to distributors who sell to dealers. Everyone in the process is looking for some kind of profitablity. In order to be able to sell it and not have a huge price, we will need a healthy discount to your retail price. Keep in mind we will have to add shipping costs (to us and to customers), import duties and customs tax. So, in order to make it it profitable, we usually take the acquisition costs (purchase price, plus shipping, plus taxes) and multiply by 4 to get the retail price.
    Minimum  order size. I know we would need to make a minimum order to make it of interest to you. But I would like to keep our first order small to see what is selling. What is the minimum order size we can start with?
    By the way, my product is branded Shrinkins. It is on the product, so that part is out for him. I ultimatley would like to license this to a manufacturer, so I don't want to get into a contract with Europe that will hinder my chances of catching a manufacturer here in the USA... I just dont know how all this is done. Thanks, Tracie