Please Scroll Down to See Forums Below 
deco
New member
So...
About a year ago, my buddy got hired for a startup company and I joined him. We resell networking equipment by companies like Cisco and HP.
The company was formed in the US by owners of a IT distribution firm in Asia. It started out with 5 employees, 4 of which were bad hires and let go... me and my buddy are now in charge of this company in the US and are onto our 6th new hire. In short, we are a small IT reseller company.
Our products come from our parent asian company. In our accounting, the product is purchased from them for a certain amount of money per each piece. After that we mark it up say 2-5% and sell it.
Here's the tricky part, both our parent company and our office in the US, try and sell to same client base. None of the clients know that we are in anyway, linked to an Asian company (different name)In a way we are competing against each other.
Here's where it get's sketchy... We've sold over $5 Mil in past 7 months which is not bad at all, by our accounting, we turned profit, in 3-4 months after me and my buddy joined. Since we sell from the same product pool as our asian company, we can kind of see that we are doing much better then them simply looking at how much product is moved everyday by us vs them, in our inventory.
As our business increased in the US, our parent asian company has hired on like crazy, 6 new sales reps in a 1-2 months... They are looking to invest into another satellite office on the East coast under a different name and are looking for a partner... I'm looking to be that partner since I have the clientele, would just need them to supply me with the product.
So what I'm trying to understand is... say i invest into an office on the east coast.. and say our sales numbers are great and all, the product they supply us with, leaves us with some margin to mark up, how am I supposed to know the following:
1. How much profit is our parent company in Asia making on our sales in the US...
2. If the other 4 investors, are all from the Asian parent company, is it even in their interest to turn any profit in the US??? I mean more profit, more taxes etc etc...
3. With the above said, wouldn't be in their interest, to sort of keep the product we purchase from them marked up enough where the company doesnt even show profit, or show just enough to where we expand and grow... I mean corporate tax rate in Hong Kong is 15%, in the US it's 30%+....
4. Does all this sort of sounds like cookbooks instead of quickbooks... Does this sound like something worth getting into? and if so, what would be the best way of going about this... I think the only fair way would be to purchase a share of the parent company to see what's on their books...
About a year ago, my buddy got hired for a startup company and I joined him. We resell networking equipment by companies like Cisco and HP.
The company was formed in the US by owners of a IT distribution firm in Asia. It started out with 5 employees, 4 of which were bad hires and let go... me and my buddy are now in charge of this company in the US and are onto our 6th new hire. In short, we are a small IT reseller company.
Our products come from our parent asian company. In our accounting, the product is purchased from them for a certain amount of money per each piece. After that we mark it up say 2-5% and sell it.
Here's the tricky part, both our parent company and our office in the US, try and sell to same client base. None of the clients know that we are in anyway, linked to an Asian company (different name)In a way we are competing against each other.
Here's where it get's sketchy... We've sold over $5 Mil in past 7 months which is not bad at all, by our accounting, we turned profit, in 3-4 months after me and my buddy joined. Since we sell from the same product pool as our asian company, we can kind of see that we are doing much better then them simply looking at how much product is moved everyday by us vs them, in our inventory.
As our business increased in the US, our parent asian company has hired on like crazy, 6 new sales reps in a 1-2 months... They are looking to invest into another satellite office on the East coast under a different name and are looking for a partner... I'm looking to be that partner since I have the clientele, would just need them to supply me with the product.
So what I'm trying to understand is... say i invest into an office on the east coast.. and say our sales numbers are great and all, the product they supply us with, leaves us with some margin to mark up, how am I supposed to know the following:
1. How much profit is our parent company in Asia making on our sales in the US...
2. If the other 4 investors, are all from the Asian parent company, is it even in their interest to turn any profit in the US??? I mean more profit, more taxes etc etc...
3. With the above said, wouldn't be in their interest, to sort of keep the product we purchase from them marked up enough where the company doesnt even show profit, or show just enough to where we expand and grow... I mean corporate tax rate in Hong Kong is 15%, in the US it's 30%+....
4. Does all this sort of sounds like cookbooks instead of quickbooks... Does this sound like something worth getting into? and if so, what would be the best way of going about this... I think the only fair way would be to purchase a share of the parent company to see what's on their books...
