I receive questions all the time and every now and then I post one here and answer it to the best of my knowledge. For four years I consulted for the Searchgrad program at the Alliance for Arts and Culture. I still help artists make money from their art and here is a question from a past Searchgrad.
“I met a teenager in India selling small rugs and I had the thought to hire him on a website with video, photo, and bio. I’ll offer to buy rugs from him/his family and/or to give him a % of all online sales. Do you have a thought on how to proceed, maybe regarding import/export. A friend is going to India and will video tape the kid and look into purchasing and so on.”
Thank you.
Cavelle
Hi Cavelle,
First, thank you for your great question!
1) From a business model this opportunity raises more questions. How old is the teenager? If he/she is under the age of 18 they are not legally an adult and can not be legally bound by contract, so if they do not produce the rugs and/or deliver the rugs, there really is nothing you can do. If you sign an agreement with the teenagers parents, that is another story, but what are you willing to do should the business relationship collapse, or the teenager disappears/dies?
2) Let’s say that the teenager is an adult and is providing or has family/friends providing the rugs. What kind of deal does he have with the rug makers? What kind of guarantee can you expect from him/her to deliver? What kind of conditions is he/she or the other rug makers working under? What kind of reasonable wage? The reason I ask is that if the online public were to find out that this was a variation of a sweat shop/child labour project, it would negatively affect your project.
3) Have you created a business plan? Without a written business model figured out, you will be trying to reach a destination without a map. Plus you need to price out everything anyway to see if you can make a profit - preproduction, production, shipping, insurance, taxes, marketing and every other thing that can happen with international trade.
4) Have you been in one of the rug retail stores here in the city? People are already importing rugs ranging in quality and usually at volumes that allow them to sell at a very low price. If your project can not compete, then why put in all the time and effort? You need to work these things out before investing any money.
5) For whatever reason, if the teenager is paid and will not perform the delivery or there is a quality issue, good luck on getting this corrected. International court cases are extremely expensive and that is why dealing with global corporations seems to be the way the world is turning. Which is not good for the little guy.
6) One last point. If you take payment from online buyers and do not deliver (for whatever reason) you will be the one liable for these transactions.
I realize that I have answered your question with more questions, but once you answer them, you will have the answers you seek.
Good luck with all your endeavours!
Sandford Tuey
www.Playdigm.com
PS: Contact the Export Development Corporation for more import/export information on international contracts, insurance and banking.