Hema, I read that several times and I still don’t have a grasp of
exactly what’s happening.
A We are asking of you to invest 50% into sampling, by giving us a
A discount off of what precisely? If the sample costs $125 to make
are you to pay them $62.50 or will they pay you $62.50? It quite
unclear who is paying who here and when.
We pay you 50% upfront, and the remaining 50% we will pay you when
we receive our first order. So we would pay you 50% of the costs
Sounds like, as written, they pay $125 to make the sample(since they
are in essence the manufacturing liaison), then pay you $62.50 now,
and $62.50 later. Or are you to pay the manufacturer directly and
receive reimbursement at 50% from this new company? This doesn’t make
sense to me.
So the manufacturer they had in mind can’t take the business? This
is not a good sign. They should have had their ducks in a row before
making a proposal to you and other artists. I strongly urge you to
look into just who these people are, their jewelry
manufacturing/marketing/financial/legal experience, and so forth.
What plans do they have to get these samples out in front of the end
customers? If they do not already have a concrete plan for marketing
I’d be very cautious about proceeding, because apparently they did
not have a concrete plan for manufacturing.
The fact that they have not named their company tells me there IS no
company (the first step in business is to incorporate or LLC or at
least register a DBA with the State)…says to me they are putting
out feelers and as yet have no capacity.
My own feelings here, and I admit they are very subjective and based
on slim facts, is that you have four hands in the pie. The
manufacturer, this unformed company, you, and the end buyer(which I
assume is to be a retailer, since they will be taking orders from
samples. Retailer are used to sometimes long lead times to get the
goods, consumers won’t wait weeks/months). That’s a pretty complex
A suggestion would be for this company to arrange a meeting of all
parties involved…manufacturer, the company and you along with other
artists propositioned. All questions could be aired and hopefully
answered and everyone might get a feeling of legitimacy.
Don’t be put off by my skepticism, I’ve found its best to anticipate
problems before committing. Keep an open but analytical mind.