I am mostly an installer and I buy whatever turns my crank. But there is a new Japanese product out there now and the parent company is just setting up shop in the US. I bought a few units from the new company (and instantly became their biggest North American customer) and am considering becoming a distributor. Canada was not on their radar at all, so they have offered me the country which is a bit overwhelming. But it is a really good product with an excellent track record in Japan and Australia. They sell literally millions in Japan as opposed to most American manufacturers who sell hundreds of thousands. Someone is flying out next week with a pitch. I have no idea what I might be getting in to but I am sure one of you does. Doesn't really matter what the product is but I am in the E36 M3 industry. Comments and warnings welcome.
You got the funding to manage something like that? If it's a good product and that's your thing, I think the opportunity to be the SOLE distributor for an entire country (almost) like Canada is a good opportunity.
As you are watching the pitch remember that subway gets dependable people to work 80 hour weeks for less than 40k per year in many cases simply by calling them 'franchisee's' and not 'employees'.
Just be aware that if distributing whatever product has potential to become the largest part of your business, the potential for you to become their 'francisee' is large.
E36 M3 industry and big in japan? Selling Bidets?
Might be the opportunity of a lifetime, might be a dud. By all means, attend the presentation! Get hold of every scrap of information you can.
The bedit comment above is a spot on observation. They are beloved by many in other nations, but not Americans. You won't move many of those here. At least right now. Now if you could change the mindset somehow of Americans (behold the power of advertising), you could have a gold mine. Its been done before. Diamond engagement rings, lavish weddings, bottled water, etc.
If it doesn't cost any money to take the rights, do it!
I have the rights to all of Alberta for Fuse Race Fuels. A monopoly is a good thing to have if you can swing it!
I have two bidets in my house. I rarely use them though they are refreshing on occasion (when the need presents itself.)
I feel the bidets competition is the hand wand in the shower. I do like the hand wand!
I have lived the distributor life. My role I was from Corp and signed/supported the Dist. To us, Dist was a financing model. We (the Corp) sold to a limited amount of Dist'ers who paid us on time and then carried the inventory.
So, as a Corp, we sold to 10 people. Then the Dist sold to 1,000 customers each. This meant that the Dist had to manage collections and payments from 1k customers and we only had to manage from 10. Dist'er carried their own bad debt and we as the corp really had no bad debt.
This is not to say that these 10 Dist'er did not make money. They did quite well for themselves.
I am not sure if your opprtunity is the same but if it is, how good are you at cash/invoice/payments/inventory management and what kind of line of credit can you secure?
HiTempguy wrote:
If it doesn't cost any money to take the rights, do it!
I have the rights to all of Alberta for Fuse Race Fuels. A monopoly is a good thing to have if you can swing it!
So do you have performance targets? Minimum volumes? That is mostly my concern. I can buy enough units for myself to make them a sales leader in my area, but outside of my area is a big unknown. I have this warm fuzzy idea that I will stock them and then load them on trucks and ship them out and pocket a nice premium on each one. But I suspect there will be targets to be met, advertising budgets, etc.
For the record it is not a new idea. It is a Japanese version of a common item. But it's sort of like (to my mind) Honda opening up a dealership in a city with nothing but yugos.
bearmtnmartin wrote:
So do you have performance targets? Minimum volumes? That is mostly my concern. I can buy enough units for myself to make them a sales leader in my area, but outside of my area is a big unknown. I have this warm fuzzy idea that I will stock them and then load them on trucks and ship them out and pocket a nice premium on each one. But I suspect there will be targets to be met, advertising budgets, etc.
Yes, and honestly, I don't think I will meet them this fiscal year. That's part of the game though; if you can show you've acted in good faith and tried to push their product, it kind of points to two paths:
1) There isn't enough demand for the product, hence why they aren't in the market to begin with
2) The demand needs to be developed. Sometimes, there simply isn't demand for an item that everyone knew they could never get. If there is no supply, how can there be "demand" and vice versa, if there is no demand, why would there be any supply?
The worst that happens is at the end of your contract, however long that is, they drop you as a sole distributor. OR, if they like working with you, they may realize their terms were too optimistic for what they saw in market potential.
For myself, there was no money outlay beyond an initial order as the supplier wanted to break into the region and has ZERO market penetration at the moment. I've offered to do that work for them, hock the goods, and deal with the substantial hassles of cross-border commerce (I believe a thread elsewhere on GRM recently highlighted how awful importing goods to Canada can be). If they don't like the work I've been doing, or I don't meet initial performance expectations, they can either renegotiate our contract or say "see ya later". Its all part of doing business, right?
Now this may not work so well if they require you to purchase a substantial amount of goods right off the bat. Your risk goes up substantially, while there is zero risk to them.
