Douglas Montgomery <Doug@pocketchalker.co.uk>
to
rncote@netscape.com
date Sun, Nov 16, 2008 at 19:10
subject Proposal
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hide details 16/11/2008
(Below also attached in pdf and .doc format)
11/16/08
Dear Nancy,
I'm really glad we're working on this again. I look forward to a long prosperous relationship and I'm open to any and all disussion so that we can work cooperatively to take this product above and beyond.
Below I've outlined some things that are at the forefront of my thoughts although I've probably forgotten many important things, my suggestion is that if anything beyond these come up in the future that we simply leave them open to discussion.
Markets:
What I'm proposing is that we, "EuroPocketChalker" make and distribute fingerslides for the European market. And that you obviously retain the US market. Any markets outside of those we could simply leave open to either of us. I think that is the best way to simplify markets. I will however suggest that we both stay out of the Asian markets.
Internet Marketing:
The domain name is obviously something I don't want to place a 'claim' on. Shortly after we started talking I registered the domain names as you know. These domain names are obviously beneficial for both of us.
Recently I have been working tirelessly on building a website that promotes EuroPocketChalker AND FingerSlides and I pay for the hosting, so I will continue. It has been under a subdomain of Fingerslides during construction, as you know, but it will eventually be moved to PocketChalker.com. Then all my domains will forward there including the Fingerslide domains.
With that in mind, credit for inventing Fingerslide and a direct link back to your site for US purchases will be on the front page similar to as it is now. I'm sure it will change but something along those lines. You'll always receive credit and there will always be a link back to you. Also, any ideas you may have for the site pertaining to Fingerslides I will do my best to build into the site. If you want to write up an about me page to incorporate I'd be very happy to build that page for you.
Managing communication and sales history:
This is a tough one, I'm not sure exactly how to do this. I have a few ideas but just not sure. I obviously can't send you copies of all my invoices. They have a lot of other info on them that isn't necessary or that I shouldn't be giving out. I could also seperate invoices between the products but there are 2 senarious to that...
1.
If I kept them in the same accounting system, you still wouldn't know if I 'skippped' a number and didn't send you one. Not that I would, I've been totally upfront about all this and I think you should be paid for a great idea.
2.
I set up a totally different invoicing system where you could see continuous numbering. 3 problems there...then my accountant would have 3 differerent systems to track(we use 2 for EPC, one for US and one for EU). Plus, now the client has extra invoices and 3rd, it costs money for the system and the accountant.
Another accounting situation is, I will introduce them on Ebay.co.uk
. I'll set it up so they won't be able to be purchased in the US from there so that's not something to worry about. From the listings you can monitor sales and sort of see what's happening but it's not very efficient, obviously.
The only solution I can think of is for me to create a nice form and fill it out with every sale, wholesale, website and Ebay. Marking it in detail as to where a sale came from and what it was. If you have some ideas on how to manage this, throw them out there.
At some point in time, as I learn how things work, I will try to seperate the databases so that if someone buys them on the website you'll be notified also. I have no idea when or if that will every be implimented. I honestly have no real idea of what I'm doing when it comes to making some of the functionalities work. Some of it is very easy but then some of it is really complicated for me. I'm learning everyday and at the moment I'm almost at a standstill because I'm having some problems I can't figure out. I spend most of my days reading and learning how to do what I'm doing.
Pricing:
The European market is much different the the US market. For example, although pocket chalkers have an msrp of $19.99 in US, here in Europe msrp for pocket chalkers is 8.99Euro. Or about $11.40. (at todays conversion rate) Retractables in the US-$12.99, EU-7.99Euro($10.00) Retractables are much more popular here in Europe. It all has to do with the customary european "aproach" to the table. They've been using pouches all their lives and the retractable maintains their hand motions and approach. To much detail I know, but I thought I'd let you in on the culture and trends we've seen in the last 2 years. On that note, gloves have only been being used here for a few years. The pro we are giong to be working with started using one 3 yrs ago and, as he put it, "I've seen a trend towards the glove since I started using one. It hasn't been so poplular. Now that it's becoming that way I'd like to endorse one." (more on that later)
They will be sold in 2 different currencies over here. Wholesale pricing is figured in Euro's as that is what everyone uses here. Ebay.co.uk
pricing is in British Pounds. Here's a breakdown of how it looks...
MSRP = 9.99Euro or about 8.50GBP
We will only do ebay from time to time because my focus is larger wholesale. I'll do it to introduce the product like I did when I started my EuroPocketChalker.
To start out, our Ebay.co.uk
price will be 6.99GBP. If the demand requires, I'll raise this to 7.99. Our clients are only allowed advertise a 20% less than msrp. That is basically how Ebay pricing is set. The normal gloves currently sell for around 5GBP including shipping with 3Packs sell for 6.88GBP including shipping.
Our 6.99GBP will include shipping.
As for wholesale pricing, I haven't set that as of yet. It will probably look something like 3 or 4 Euro's depending on how many they want. (Currently pocket chalkers (msrp 8.99) have a best price(96pcs) of 3.50.) These prices include a 22% vat tax. More on that later.
The price will be obviously be lower for larger orders such as 500-1000 pieces. We do have 2 firms that (if they decide to take them on as a product) will buy that kind of quantity. I don't know when or if they will make that purchase but I feel pretty strongly as they have bought that many of our other products. It depends on catalogs and the time of the year. Currently everyone has a new 2yr catalog out so these sales may or maynot happen anytime soon. As you know, it hasn't been exposed to them. I have exposed it to a few select clients for feedback. Some has been positive and some has been 'constructive'.
Manufacturing:
The shape of the glove is perfect and exactly what Fingerslides are all about, providing a smooth, stable stroke without completely covering your hand. Covering only your three fingers. You are currently using a 4mm foam. This has proven to be the perfect solution for you and is working well.
On the other hand, here in Europe people have a tendancy to want things 'minimal' and classy. (With your idea we've got classy covered) When I sent the glove to the man in Europe who wants to endorse it he showed it to 5 or 6 other pros. Many of them tried it and all really liked the idea but said that it was a little to thick. They said that in a closed bridge it was fantastic but in an open bridge they couldn't feel the cue. They also said that as it is, they wouldn't use it simply for this reason. For this reason only did I makde the modifications. I hope you can understand.
I am sending you one of each size made the way you make them. 4mm on all fingers. I am also sending you the same with 3mm on the thumb. Please let me know what you think when you get them. I will probably also make one with 3.5 on the index and middle finger and 2.5mm or 3mm on the thumb to see how it turns out. I hope you can accept these modifications as they are what is suited for this market. Material and sewing quality will obviously be of the highest standars as you'll see from the samples. I really hope you don't find this offensive. I had made and sold 500 pocket chalkers only to find out I had to make a couple of major logistical changes. I think this is normal with new products. Your samples will be in the mail on Monday.
Sizes...If the sizes we came up with are a little off from what you are putting together it would be nice to have a little help. We've done our best and have tried and worked through many many trial and errors trying to get it correct. We've created forms to produce the sizes and if they are off a little based on your experience it would be nice to know the exact measurements. If you don't want to tell us, for whatever reason, these are the sizes we will be using.
Trademarks and logos:
At this point in time, that is up to you. You own the trademarks and I don't want to 'step on toes'. I would hope that you would allow the use of the trademarks. I won't mess with your logo unless you want it on the site. There again, I would think that is something you'd want.
Compensation:
We spoke of 10% on the phone. In general, I agree with this. All our 'listed' prices have to include 22%vat. I will pay you 10% on all wholesale and retail sales, after vat is deducted. With one exception, orders over 250 pieces requires extra negotionations and the wholesale sales price and profit margin drops drastically. These are to dealers who dristibute to the wholesalers. One company has over 350 wholesalers worldwide. On these sales where negotiation of lower prices take place I will pay you 5%. My thought is to communicate with you on a monthly basis as to what's happened and how many if any have been sold. Currently the market is slow as is everywhere so I do not have any idea how this will be received and how fast people will pick up on it.
As soon as we come to terms I plan on sending samples to all my European clients. Some might order a dozen, some may order 24 and then some may order 48's. Then again no one may order any right away. At the same time, one or 2 of the companies may want 500 or 1000. I just don't know. (once again...the bigger distributors have a new 2yr catalog out so these sales may or maynot happen anytime soon or in the volumes anticipated..)
Then there's the production time. We're on a roll to make a few hundred next week and test the water. We've got material to make about 3000. How soon we'll actually need them is unknown. We can make, I'm guessing 2-300 a day. Maybe more. The lead seamstress and I just got things really put together on Friday, just in time to send you samples as this is all coming together. I'm not sure exactly how many people they will put on the project. There are 7 or 8 seamstresses although they are all working on different projects. I don't plan on making them all at once so it will be worked in with projects as they are needed.
Doug