Singapore Expats Forum

Partnership with another company out of Singapore

Discuss your views about Singapore business & economy, current policies & issues, starting a business in Singapore.
User avatar
lore
Member
Member
Posts: 38
Joined: Sat, 28 Feb 2009
Location: Singapore

Partnership with another company out of Singapore

Postby lore » Mon, 20 Apr 2009 2:25 pm

Hi all,

i am discussing a retail partnership with a Japanese company who wants to go international for é first time & it will be in Singapore but they only want to try out a year.

I will be their sole agent or so called in charge of Singapore market here. Therefore I had completed the business planning & costing for just a year but i just want to know what other things to look into this.

Hope someone can advice. Thanks alot in advance.

nkthen
Newbie
Newbie
Posts: 15
Joined: Wed, 22 Dec 2004

Postby nkthen » Tue, 21 Apr 2009 3:54 pm

You'll need a company secretary, a lawyer, an accountant and a business process advisor to help you out.

The most important one is to get a lawyer to advice you on it.

If you want, email me at info(at)nkthen.com and I will help link you up with them.

User avatar
Strong Eagle
Moderator
Moderator
Posts: 10413
Joined: Sat, 10 Jul 2004
Location: Off The Red Dot
Contact:

Re: Partnership with another company out of Singapore

Postby Strong Eagle » Tue, 21 Apr 2009 7:24 pm

lore wrote:Hi all,

i am discussing a retail partnership with a Japanese company who wants to go international for é first time & it will be in Singapore but they only want to try out a year.

I will be their sole agent or so called in charge of Singapore market here. Therefore I had completed the business planning & costing for just a year but i just want to know what other things to look into this.

Hope someone can advice. Thanks alot in advance.


You've not addressed a number of items.

What do you mean by 'retail partnership'? This has no meaning in the legal sense.

If you are going to be a sole agent for them, then you are a manufacturers representative. As such, they have no presence, you have the company, and you work on a commission or salary in exchange for peddling their product. This is an arm's length transaction between two separate companies.

If on the other hand they want to create their own legal entity here, then they are a foreign company creating a wholly owned private limited and/or partnership. In this case you would need to define your role in the Singapore company: MD, GM, whatever. If you have a company here, you could contract services to them but they would still need at least one local director.

User avatar
lore
Member
Member
Posts: 38
Joined: Sat, 28 Feb 2009
Location: Singapore

Re: Partnership with another company out of Singapore

Postby lore » Tue, 21 Apr 2009 10:25 pm

Strong Eagle wrote:
lore wrote:Hi all,

i am discussing a retail partnership with a Japanese company who wants to go international for é first time & it will be in Singapore but they only want to try out a year.

I will be their sole agent or so called in charge of Singapore market here. Therefore I had completed the business planning & costing for just a year but i just want to know what other things to look into this.

Hope someone can advice. Thanks alot in advance.


You've not addressed a number of items.

What do you mean by 'retail partnership'? This has no meaning in the legal sense.

If you are going to be a sole agent for them, then you are a manufacturers representative. As such, they have no presence, you have the company, and you work on a commission or salary in exchange for peddling their product. This is an arm's length transaction between two separate companies.

If on the other hand they want to create their own legal entity here, then they are a foreign company creating a wholly owned private limited and/or partnership. In this case you would need to define your role in the Singapore company: MD, GM, whatever. If you have a company here, you could contract services to them but they would still need at least one local director.


Sorry that I may have not stated é issue properly cos it's still under discussions. So the role & how the business goes have not yet fix which means i still have the time to plan. But...due to bad economy & especially retails in JP is even worse therefore they dun intend to invest now. Bingo (u'r right)!! It's most likely work between 2 seperate companies.

If it's working between 2 seperate companies, wat are the things i need to look into in order to have more benifits or advantages cos they only want to try out in Singapore market before they really invest after a year.
Hope you can give me ur brilliant ideas/plans.

Really thanks alot!!!

User avatar
Strong Eagle
Moderator
Moderator
Posts: 10413
Joined: Sat, 10 Jul 2004
Location: Off The Red Dot
Contact:

Re: Partnership with another company out of Singapore

Postby Strong Eagle » Tue, 21 Apr 2009 10:36 pm

lore wrote:If it's working between 2 seperate companies, wat are the things i need to look into in order to have more benifits or advantages cos they only want to try out in Singapore market before they really invest after a year.
Hope you can give me ur brilliant ideas/plans.

Really thanks alot!!!


OK, lore... if it is two separate companies, then here are some things to think about.

a) You can have a relationship as purely a manufacturers rep. In this case, you would expect the company to supply you with catalogs, marketing materials, samples, etc. You would be responsible for direct sales of the product in Singapore. They would be responsible for the actual delivery of the product wherever you sold it.

Your pay would most likely be commission based with possibly a small salary. You would want to negotiate your commission on raw sales at the time signed while they would want to possibly set your commission on net profit after the customer has paid.

b) You could take on the role of independent distributor. Now, the company is selling inventory to you, you mark it up and resell it into the market. On this case you would want the most attractive terms to get your inventory for sale... you want it cheap... you want it on consignment... you only pay for what you sell... and you want generous credit terms. The company would prefer all the money up front for inventory.

So, you need to fundamentally decide if you only want to be the sales arm in Singapore and let the company handle all the logistics of delivery after the sale, or you need to decide whether you want to be part of the logistics and distribution side of things.

The way I look at it is that you make more money as a distributor because you get paid for actually inventorying and delivering the product but the downside is you are stuck if nothing sells.

OTOH, if you are only a manufacturers rep, then you sell and your losses are limited... but you don't get the additional profits of taking on distribution risk.

PS: I hate "dun". It is "don't". It takes exactly two more characters to type it properly, one more to leave out the '. I also hate wat (what - 1 character) and cos (because)... it is crap. So help yourself by maximizing your English skills.

User avatar
ksl
Governor
Governor
Posts: 6005
Joined: Mon, 19 Jul 2004
Location: Singapore
Contact:

Postby ksl » Tue, 21 Apr 2009 10:51 pm

personally you need to protect yourself, the word retail partnership, is like SE says.

Basically the Japanese wish to penetrate the Singapore market, with their own brand name bags. If this is their approach to you, then you have some negotiating to do, otherwise you will probably end up cutting your own throat.

If you have approached the handbag company, with the idea of setting up in Singapore, you still need to be very shrewd on the negotiating table, for your own good.

I would suggest a joint venture, whereby you take on the role of sole agent distributor in your own Company which it will be anyway if you are setting the business up, but the Japanese company contributes, to your marketing and promotion costs, which is the only way forward to get any exposure.

To agree to setting up a business in Singapore, for a foreign brand, even sole agent, is not a good idea at all, because they can drop you, when your contract runs out after a year and replace you, which means you have basically been a stepping stone into the market at your expense and there is nothing you can do about it.

So i would advise all or nothing. A joint venture is a good starting point if they have approached you. If it's your own idea then you can request the joint venture which is a working relationship to brand their products in Singapore. Although sincerely you need to do much more research in the market place, to see if it is feasible to throw any hard earned savings into the venture.

If they will not go into a joint venture, why not consider branding your own bags, this way they have no influence over your brand.

There are many ways of starting a business, which need to be looked at, learning to walk before running is always, best because you do not lose so much hard earned cash.

I don't mind giving you some free advice if you are needing it, and i can probably supply point you in the right direction for a contract template, which will probably need minor adjustments, to be their agent. But it will cover your needs.

A 1 year period is okay, but you need to ensure they do not set up in Singapore, without you after the 1st year, or at least you secure all commissions on their handbags sold in this Country for a minimum period of 5 years.

Then if you are dumped, you will be rewarded for the 12 months effort you have put in and may recover any losses, which are highly likely in a 1years period.

The minimum period for any business start up, needs to be at least 3 years, simply because you will have great difficulty on breaking even in 1 year.

I would need to look at your figures, before concluding, but take my advice, to brand a handbag in Singapore in one year isn't really feasible, only to have it taken away from you.

SE has covered most points to look at, above.....Myself i would get them on contract and you be their representative, not the agent, but you demand the commission over minimum 5 years, to find a reliable distributor for their products, not only in Singapore but Asia

That way, when you have set up the agency for them in each Country, you still get the commission for your full 5 year contract, they will probably not go for a longer contract, because if you are clever, you can be making a great deal more than the CEO of the company and they don't like that. It's all down to what way you choose, I always choose the easiest way, as little work as possible and work from home.

What you need to be thinking of is becoming wealthy as quickly as possible, and a retail shop is tough going it's limited in volume sales unless more outlets are opened, you need volume sales, and a good commission....

Although handbag competition appears to be hard going, i could think of better things.

User avatar
lore
Member
Member
Posts: 38
Joined: Sat, 28 Feb 2009
Location: Singapore

Postby lore » Tue, 21 Apr 2009 11:08 pm

ksl wrote:personally you need to protect yourself, the word retail partnership, is like SE says.

Basically the Japanese wish to penetrate the Singapore market, with their own brand name bags. If this is their approach to you, then you have some negotiating to do, otherwise you will probably end up cutting your own throat.

If you have approached the handbag company, with the idea of setting up in Singapore, you still need to be very shrewd on the negotiating table, for your own good.

I would suggest a joint venture, whereby you take on the role of sole agent distributor in your own Company which it will be anyway if you are setting the business up, but the Japanese company contributes, to your marketing and promotion costs, which is the only way forward to get any exposure.

To agree to setting up a business in Singapore, for a foreign brand, even sole agent, is not a good idea at all, because they can drop you, when your contract runs out after a year and replace you, which means you have basically been a stepping stone into the market at your expense and there is nothing you can do about it.

So i would advise all or nothing. A joint venture is a good starting point if they have approached you. If it's your own idea then you can request the joint venture which is a working relationship to brand their products in Singapore. Although sincerely you need to do much more research in the market place, to see if it is feasible to throw any hard earned savings into the venture.

If they will not go into a joint venture, why not consider branding your own bags, this way they have no influence over your brand.

There are many ways of starting a business, which need to be looked at, learning to walk before running is always, best because you do not lose so much hard earned cash.

I don't mind giving you some free advice if you are needing it, and i can probably supply point you in the right direction for a contract template, which will probably need minor adjustments, to be their agent. But it will cover your needs.

A 1 year period is okay, but you need to ensure they do not set up in Singapore, without you after the 1st year, or at least you secure all commissions on their handbags sold in this Country for a minimum period of 5 years.

Then if you are dumped, you will be rewarded for the 12 months effort you have put in and may recover any losses, which are highly likely in a 1years period.

The minimum period for any business start up, needs to be at least 3 years, simply because you will have great difficulty on breaking even in 1 year.

I would need to look at your figures, before concluding, but take my advice, to brand a handbag in Singapore in one year isn't really feasible, only to have it taken away from you.


Thank you KSL & SE for both of your kind & wise advice.Will seriously look into all the points you guys had given.

singlink
Newbie
Newbie
Posts: 4
Joined: Thu, 07 May 2009
Location: Singapore

Postby singlink » Thu, 07 May 2009 11:20 pm

When you actually open the business here, don't forget to notify us here so that we can support your business. Hehe.... :D

luxiana
Regular
Regular
Posts: 137
Joined: Mon, 02 Jul 2007
Contact:

Postby luxiana » Thu, 07 May 2009 11:46 pm

just my 2 cents:
check out on Spring's website if you cant get a grant or a tax relief for your project...
my website: free online game

User avatar
lore
Member
Member
Posts: 38
Joined: Sat, 28 Feb 2009
Location: Singapore

Postby lore » Sat, 09 May 2009 8:30 pm

singlink wrote:When you actually open the business here, don't forget to notify us here so that we can support your business. Hehe.... :D


Hi, so kind of you. Definitely will let all of you know once it's confirm but am wondering where can i make an announcement in this forum.

Cheers!!! :wink:


  • Similar Topics
    Replies
    Views
    Last post

Return to “Business in Singapore”

Who is online

Users browsing this forum: No registered users and 1 guest