Directors: m. Allison, b. Locke

Telephone: (171 6369010/1/2/3/4 Reg. No.: London 897032

Telex: 9816172 VAT No.: 232 6165 73

Fax: 071 636 9271

Cable: ALLOCK London

Mr F. Iglasis 17 October 20—

Iglasis Leather Manufacturing SA

Enrique Granados 109

Barcelona

Spam

Dear Mr Iglasis,

We are interested in the offer you made to us in your letter of 8 October to act as sole agents for your leather goods in this country.

We think that the annual turnover you suggested was rather optimistic, and while we agree that there is a demand for leather cases and bags here, we think that half the figure you quoted would be more realistic. In view of this, the commission you offer, six per cent, is rather low, and we would expect a minimum of ten per cent on net invoice totals.

As sole agents, the territory you offer, i.e. London, would be too restrictive for sales, and this would have to be extended to the home counties. We also feel it would be better for customers to settle with us direct, and we would remit quarterly account sales deducting our commission, but we are prepared to leave this matter open for discussion.

Finally, we will hold the stock you suggested, but if there is a rush of orders, as there may be now we are nearing Christmas, you would have to shorten the delivery date you quoted, from six weeks to three weeks from receipt of order.

If these conditions are suitable, then we would certainly accept an initial one-year contract to act as your agents.

Yours sincerely,

M. Allison

10.5.4

Reply to an offer of an agency

This letter is a reply to an offer of an agency, but the prospective agent is asking for the terms to be changed.

Questions

1. What sort of agency is Mr Iglasis offering?

2. Why does Mr Allison think a six per cent commission is rather low?

3. Which matter is he prepared to negotiate?

4. Why are delivery dates a problem?

5. How long will the initial contract run?

6. What did Mr Allison mean by saying that the annual turnover Mr Iglasis suggested was optimistic?

7. If you were Mr Iglasis, what concessions do you think you could make to meet Mr Allison's terms?

8. Which words in the letter correspond to the following: exclusive; too hopeful; at least; limited; send; pay; first?

10.5.5

Request for an agency

In this letter a British retailer is asking an American manufacturer if he can represent him in the UK. Notice that he explains who he is; tells the manufacturer where he saw the product; convinces him that there is a market; and suggests terms.

Glough & Book Motorcycles Ltd.

31-37TradersStreet, Nottingham NG1 3AA Registration 733152

Directors: B. Glough, T. Book VAT Registration: 878 5662 74

Telephone: 0602 77153 (6 lines)

Telex: 45513

Fax: 060248865

Sales Manager 1 March 20-

Hartley-Mason Inc.

618 West and Vine Street

Chicago

Illinois

U.S.A.

Dear Sir,

We are a large motorcycle retail chain, with outlets throughout the UK, and are interested in the heavy touring bikes displayed on your stand at the Milan Trade Fair recently.

As you are probably aware there is an increasing demand in this country for machines of this type due to increasing traffic congestion, environmental problems and the acceptance of the motorcycle as a common means of transport, rather than just a teenage phase. And sales of larger machines have increased by more than 70 per cent in the last two years.

We are looking for a supplier who will offer us a sole agency to retail heavy machines. At present we represent a number of manufacturers, but only sell machines up to the 600cc range, which would not compete with the 750cc, 1000cc, and 1200cc models you make.

We operate on a 10% commission basis on net list prices, with an additional 3% del credere commission if required, and we think you could expect an annual turnover of more than £2,000,000. With an advertising allowance we could probably double this figure.

Our customers usually settle with us direct, and we pay our principals by bill of exchange on a quarterly basis.

You can be sure that our organization will offer you first class representation and excellent sales to guarantee the success of your products in this country.

We look forward to hearing that you are interested in our proposal.

Yours faithfully,

Hartley-Mason Inc.

President: J.R Mason D.F.A. Directors: P. Hartley Snr., A. Hartley Jnr.

618 West and Vine Street, Chicago, Illinois

Telephone: 216818532 Telex. 67712 Fax: 216 349076

Mr B. Glough 14 March 20—

Glough & Book Motorcycles Ltd.

31-37 Traders Street

Nottingham NG1 3AA

ENGLAND

Dear Mr Glough,

We were pleased to receive your letter of March 1 and to see that you were interested m the machines we produce.

The United States, like Great Britain, has also experienced an increase in motorbike sales, and like you we think that there is a vast market to be tapped for the heavy touring bike.

With regard to your offer, I should tell you straight away that we never use sole agencies anywhere in the world, but rely on merchants buying our products on their own account, then retailing them at market prices in their country. We, of course, offer a 30% trade discount off net list prices and a further 5% quantity discount for sales above $100,000. We have found sole agencies tend to be rather restrictive both for ourselves and our customers.

As far as advertising is concerned, you will be pleased to hear that we have arranged for an extensive campaign, which begins next month and features our heavy machines. We are sending dealers throughout Europe brochures, leaflets, and posters to hand to their customers, and this will be followed up by television advertising in May.

Our terms of payment are 60 d/s bills, documents against acceptance if the customer can provide references.

Once again, thank you for writing to us, and please contact us if you have any more enquiries.

Yours truly,

J. R. Mason

President

10.5.6

Reply to a request for an agency

The American manufacturer is interested in Mr Glough's proposal, but does not agree to the terms.

Questions

1. How does Mr Mason encourage Mr Glough's view that there is an increase in motorcycle sales?

2. How does he explain that it is not only Mr Glough's firm that would not be offered a sole agency, and why doesn't Mr Mason's company offer sole agencies?

3. What sort of campaign is Hartley-Mason planning to help sales?

4. What are Hartley-Mason's usual terms of payment?

5. Which words in the letter correspond to the following: exploit a market agents acting on their own account; depend; selling direct to the public; large programme; give?

10.5.7

Request from a buying agent

This letter is from a buying agent in the UK asking a French store if he could represent them. Buying agents have a first-class knowledge of the country, its products, the most competitive prices on the market for goods, freight, and insurance, and that is why they often take a commission on c.i.f. invoice values rather than net invoice values.

L. Dobson & Co. Ltd.

Royal Parade, Plymouth PL1 4BG

Telephone: 0752 31261 Reg. No.: 81 561771

Telex: 110753

Vivas S.A.R.L. 8 June 20—

138 rue Cimarosa

F-75006 Paris

For the attention of the Chief Buyer

Dear Sir,

I am replying to your advertisement in the trade magazine Homecare in which you said you were looking for a buying agent in the UK to represent your group of stores in France.

My company already acts for several firms in Europe and America and we specialize in buying domestic appliances and other household goods for these markets. We have contacts with all leading brand manufacturers so we are able to obtain specially reduced export prices for their products and we can offer excellent terms for freight and insurance.

Our usual commission is 5 per cent on c.i.f. invoiced values, and we make purchases in our principals' names, sending them accounts for settlement.

We will keep you well informed of new products that come on to the market, sending you any information or literature that we think will be helpful.

I have enclosed our usual draft contract for you to consider, and if you are interested, I would be pleased to hear from you.

Yours faithfully,

L. Dobson

Enc.

Vivas S.A.R.L

138 rue Omarosa, F-75006 Paris

Tel (1)46031309 Telex. 621593 Fox: (1) 46031931

L. Dobson & Co. Ltd.

Royal Parade

Plymouth PL 14BG

UNITED KINGDOM 23 June 20—

Dear Mr Dobson,

Thank you for your letter in reply to our advert in Homecare. Although we are interested in your proposition, the five per cent commission you quoted on c.i.f. invoice values is higher than we considered paying. However, the other terms quoted in your draft contract are quite suitable.

We accept that you can get competitive rates in freight and insurance. Nevertheless, we do not envisage paying more than three per cent commission on net invoice values, and if you were willing to accept this rate we would sign a one-year contract to be effective as from 1 August. We can assure you that the volume of business would make it worth accepting our offer.

Yours sincerely,

Mane Varenne (Mme)

10.5.8

Reply to a buying agent's request

The French company is not happy with Mr Dobson's proposal to charge 5% commission on c.i.f. invoiced values.

Questions

1. Does Mme Varenne concede that Dobson's rate is justified?

2. If Mme Varenne's counter-proposal is accepted, what sort of contract would be offered?

3. What is a 'draft contract'?

4. How does Mme Varenne explain that her offer is worth considering?

10.5.9

Agent's report

Here is a report from an agent who is sending an account sales to an English publisher for books he has sold on his behalf in South East Asia. The Agent takes advantage of the letter to make an enquiry.