[Jewelry making - Article 00704] - Re: [Orchid] Design royalties

[Hema]

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Dear All,

    Thank you for having responded to my earlier query. However, this
    company (made up of two individuals and are still in the process of
    giving their company a name) has had problems about the manufacturer
    because he is apparently too busy with the orders that he already is
    processing and so cannot take up their work. The alternate solutions
    that have been put forward are as follows: 

    A We are asking of you to invest 50% into sampling, by giving us a
    50% discount. So every time we sample new designs by you, you invest
    50% into it, by splitting the costs 50-50. It is a one time payment
    for the samples, after which all transactions will be for the bulk
    orders. Both you and us- we will recover this investment in future
    bulk transactions. OR B. We pay you 50% upfront, and the remaning 50%
    we will pay you when we receive our first order. So we would pay you
    50% of the costs right now. However based on the response to your
    pieces we would only be paying you 100% for the samples on which we
    secure an order. The intial amount would be adjusted towards the
    payment of these samples. That way, we leave to the market to
    determine the response towards your designs. You get rewarded and
    paid as soon as a favorable response is generated, and we reduce our
    risks in case the designs do not meet approval. 

    Do companies work like this?? even if they are starting a new
    venture!!! 

    I would greatly appreciate your views regarding the two options
    mentioned above as given by the company. 

Regards,
Hema
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