Bifranchising

2011-12-03T19:42:00.000-08:00

Bifranchising

GIA Trading Group - Blog News

2011-11-24T17:10:00.000-08:00

GIA Trading Group - Blog News

GIA Trading Group - International Trade Bifranchise Network Worldwide

2011-11-24T17:07:00.000-08:00

GIA Trading Group - International Trade Bifranchise Network Worldwide

GIA Trading Group - Blog News

2011-10-23T06:17:00.000-07:00

GIA Trading Group - Blog News

GIA Trading Group - International Trade Bifranchise Network Worldwide

2011-10-11T20:52:00.000-07:00

GIA Trading Group - International Trade Bifranchise Network Worldwide

2011-10-11T04:42:00.000-07:00

International Trade Risks and GIA Trading Group Solutions

Local Competition: In today’s competitive marketplace with an ever-increasing number of international retail conglomerates going global, local businesses are forced to import goods from overseas suppliers from countries with lower manufacturing costs.
Manufacturing Process: Globalization is forcing manufacturers to compete on price and quality worldwide and in order to lower their costs. A number of manufacturers prefer not to keep large inventory in stock, but instead move to the just in-time manufacturing model.
Risks to Suppliers: The ever-increasing number of overseas buyers multiplied the numbers of defaulted or delayed payments from buyers. Manufacturers are not prepared to take these risks anymore and they demand 100% prepayment of the orders or at the very least partly payment in advance with the balance guaranteed by a bank (bank payment guarantee or standby letter of credit).
Bank Risks: Payment guaranteed by a bank does not mean the manufacturer will collect his money in time. Banks work with documents issued by the shipping agents, port authorities and the captain of the vessel; these documents are presented to the bank by the seller in order to collect the funds. However, if there is a discrepancy (occurring in over 90% of the transactions) in the paper work (signature in the wrong place, misspelled words, wrong description of the product, error in the quantity, wrong dates and so many other human errors), banks will not pay till everything is in a strict compliance with the bank-issued instrument. Correcting documents takes time and money, especially since the buyer is from another country with a deferent legal jurisdiction. In some cases, legal procedures cost more than the disputed amount.

Transaction Costs (usually bore by buyers):

Legal costs for international trade contracts

Banking charges for a letter of credit could cost up to 2% of the value of the letter of credit especially if the letter of credit has to be confirmed by an unrelated second or a third bank

Currency conversion

Cost in banking disputes (legal, time, travel)

Suppliers will increase the price of the product to cover themselves in a case of a bank dispute because of a discrepancy in the documents (sellers offer a discount when pre-paying for the order)

RISKS to BUYERS:

Seller is an Agent, unless buyer has a presence in the suppliers’ country or visits the manufacturers’ premises, there is a great risk of the seller being an agent and not the manufacturer. Agents in many cases cannot and will not perform in accordance with the agreement.

Sellers collecting upfront payment or partial payment and not delivering the products.

Incorrect quantities of products shipped.

Wrong products shipped.

Products not complying with the international or country standards.

Delayed shipments.

Costly disputes in foreign countries.

RISKS to SELLERS

Expiring letters of credit.

Buyer’s insolvency.

Exchange rate risks.

Bank’s inability to honor its undertaking.

There are additional risks generally associated with the international trade such as country economic and political risks:

Risk of insolvency of the buyer/seller.

Influence of political parties in importer's/exporter's company.

Changes in government policies.

Surrendering economic sovereignty.

Surrendering political sovereignty.

War risks.

Industrial disputes.

Trade embargoes.

Exchange control regulations.

Risk of Exchange rate.

Imposition of exchange controls by the importer's/exporter's country.

Foreign currency shortages.

Risk of cancellation or non-renewal of export or import licenses.

Supplier inability to supply the products.

A bank's inability to honor its undertakings.

Difficulty in resolving potential disputes.

Lost confidence in management when assume the blame for delayed payments and lost revenue. LC problems can hinder team morale, leadership abilities, and even the direction of a manager’s career.

Given the current financial and economic situation when well-known old banks (Merrill Lynch, Washington Mutual, Lehman Brothers, Bear Stearns, etc.) have collapsed and become bankrupt or others (like Citi Group) being SOLD to the US government – not many producers/exporters would accept letters of credit drawn on these or any other banks. Additionally, it has become now fashionable to argue that banks are safer if they are part of larger institutions. This is NOT true. Bigger banks are just even more awful – implicit safety can become dangerous when institutions become too big to save. Citi’s tailspin was not required to show that pure investment banks weren’t the only one that got into trouble. Care to remember UBS, Wachovia, Royal Bank of Scotland, HBOS and Fortis? None of them was a pure investment bank, but all suffered huge losses from playing around with risky assets. Their other businesses (like retail banking, trade finance, insurance, etc.) did little to soften the blow. Indeed, the mix of businesses may have made these banks less competent or even more reckless in managing trading operations, i.e. nobody likes the “jack of all trades” or ”all can-do” types – everybody wants to deal with a SPECIALIST.

“GIA Trading Group” (“GIA Group”, GIA) is a ten-years old Australian company operating on a global scale and SPECIALIZING in the international trade and wholesale and distribution business at a national lever worldwide. GIA Trading Group has currently invented a NEW WAY of doing international trade business, the way that will either eliminate or greatly reduce risks associated with international trade. Under the NEW WAY of doing international trade and import-export business, both suppliers and buyers will be dealing with ONE LOCAL (to them) entity – GIA TRADING GROUP BIFRANCHISEE.

BENEFITS OF DOING BUSINESS WITH GIA TRADING GROUP (NEW WAY):
NO more international travel – sale and purchase done locally, it saves you money and given recent financial events, it keeps you safe.

NO more language and cultural barriers – negotiating sales and purchase done locally in your mother tongue under your local customs, traditions and legal jurisdiction.

NO more Letters of Credit, NO bank fees, NO delays – transactions are done in an expedient way with the most possible protection of both buyers and sellers.

NO more FOREX rate fluctuations – transactions are done in your LOCAL currency

GIA Trading Group International Trade BiFranchise

2011-10-10T21:46:00.000-07:00

GIA Trading Group International Trade BiFranchise

GIA Trading Group - International Trade Bifranchise Network Worldwide

2011-08-17T23:06:00.000-07:00

GIA Trading Group - International Trade Bifranchise Network Worldwide

A safer way for international trade

2008-12-31T00:55:00.000-08:00

14 REASONS WHY SHOULD EXISTING IMPORTERS, EXPORTERS OR DISTRIBUTORS BECOME GIA’S BIFRANCHISEES
1. GLOBALISATION: the internet and the emergence of the large retail chain stores have increased competition in the international and local trade.
The above 3 market changes make it harder for the small retailers and importing companies to survive.
2. MISSED OPPORTUNITIES: World-wide competition and high commodity prices forced manufacturers to keep low inventory and some of them produce stock on orders only.
In many cases, production of small orders becomes too costly for the manufacturers and they refuse to sell to small buyers.
Small importers are usually forced to deal with local agents where they are forced to pay much higher prices and in many cases they are supplied with second grade products.
3. BUYING POWER: GIA Group will supply products to partners worldwide as a result; our buying power will be greater that that of the retail giants like Wal-Mart. Big buying power means better prices and better trade conditions.
4. BUYING OPPORTUNITIES: GIA will have a local presence in all of the supplying countries and will be known as a big buyer and GIA bifranchisees will be offered opportunities to buy cancelled orders, overshoot production offers and close out offers at a very favourable price.
5. FIRST MOVER ADVANTAGE: GIA’s local presence, big buying power and our worldwide network will entice any manufacturer to offer us new products to be placed on the worldwide market.
6. EXCLUSIVITY: GIA will have the opportunity to represent products on exclusive basis worldwide and or for a number of regions.
7. OWN BRAND NAMES: GIA will offer a number of products under our own brand name. These products will be distributed only by the GIA Country Partners.
8. QUALITY PRODUCTS: All products will be sourced by our local Bifranchisees.
All Bifranchisees will have the opportunity to offer products to the network and they will compete with other partners on quality and price.
This model will give GIA the opportunity to supply products at the best possible price and products that will suit all markets.
9. QUALITY CONTROL: GIA’s Bifranchisees will offer products as per sample and they will be responsible for quality control for every shipment.
10. WORLD WIDE BRAND NAME RECOGNITION: Since all Bifranchisees will operate under the GIA name, they will be recognised as a worldwide brand name.
11. GOVERNMENT RECOGNITION: All Bifranchisees will be promoting and exporting all kinds of products from their country they will be recognised by their government as a company who is helping their country to improve their economy.
12. NEGOTIATING POWER: All Bifranchisees will be buying products for a worldwide distribution network. Because of their huge buying power, they will be welcomed by all the suppliers in their territory and will be able to negotiate the best possible buying conditions.
13. MULTIPLE STEAM REVENUES: Since the Bifranchisees will earn revenues from a large number of streams they will not suffer great loses from a seasonal slowdown of some product categories because other categories will still be performing well
14. FRAUD PROTECTION: The Internet and technological advances have made it much easier for unscrupulous traders to present themselves as manufacturers and supply low quality or damaged products to unaware importers.
In many cases fraudsters forge shipping documents to collect payments from unwary importers. This situation has created mistrust between buyers and sellers – as a result, legitimate and profitable transactions not being concluded.
All parties involved, importers, distributors, manufacturers, retail chain stores will be protected from these kinds of risks because they will deal with a local GIA Bifranchisee and the transaction will be classified as a local transaction, under local currency.

THE REMOVAL OF THE RISK OF FRAUDULENT TRANSACTION COUPLED WITH THE COMBINED BUYING POWER OF OUR GLOBAL NETWORK WILL CERTAINLY CONVINCE ANY PRUDENT BUSINESSMAN TO JOIN OUR TEAM.

Bifranchise Concept

2008-11-25T05:48:00.000-08:00

What is BiFranchise? [by-fran-chahyz]

BiFranchise is a system of business cooperation where one party (BiFranchisor) grants another party (BiFranchisee) the right to use its business name, business methodology and the network exclusively in a nominated territory for a specified period of time. Unlike a regular franchise business a bifranchise is a two-way franchise where the bifranchisee purchases from as well as supplies products to the fellow bifranchisees within the network, in this instance the bifranchisee acts as a bifranchisor.

While franchising works mainly as a business-to-consumer (B2C) business on a local/national level, bifranchise works mainly as a business-to-business (B2B) on an international level. Bifranchise operates under the same laws, rules and regulations as the international franchise system.

The major difference between franchising and bifranchising is that in franchising, the franchisor supplies majority (if not all) of the products/services to be sold by the franchisee. The franchisees are not permitted to purchase products or services from any other source. The bifranchisees are not obligated to buy/sell all the products offered by the bifranchisor, i.e. bifranchisees can choose which products to purchase from the bifranchise network. Just as the franchisor is in control of the franchise, the bifranchisor is in control of the bifranchise.

In bifranchising, the bifranchisor acts as a centralized distributor and coordinator who supervises and manages the flow of products/money from the bifranchisees to the bifranchise network. The bifranchisor charges the bifranchisees a percentage of each transaction and royalty fees. Various tangible and intangible assets such as websites, transaction clearing services, currency exchange, marketing, sales training and international advertising are offered by the bifranchisor to support the network.

The name BiFranchise was first used by GIA Trading Group as they were establishing their international network of trading companies. When the management of GIA Group wanted to use the franchise structure to establish and link their trading companies worldwide, the proposal was rejected by the members of the group and the GIA Group marketing department because the operational method and philosophy of the business was completely deferent from that of the normal franchise. Since the legal structure of the business is that of the franchise concept, but the franchisor does not exclusively supply its products to the franchisees and the franchisees can act as franchisors and supply products to the franchisor and to other franchisees we have a two-way situation, so it was agreed the word bifranchise to be used for this business model.

The bifranchise model is used in the international trade. You are welcome to comment on the name (bifranchise) and the model.
Interested in hearing new ideas and alternative markets where this business model can work well.