Ameen Ansari has a shop in Ritchie Street. He procures sound systems like amplifiers, receivers and performance systems from Singapore and sell it to dealers in Chennai. He has been in this business full time for the last three years and as a trader of foreign items for about 18 years.
The sound system business involves going to Singapore, procuring the items, shipping it to Chennai port and then selling it to the dealers here. If there are minor repairs, then those items will be repaired before selling.
Below is a snapshot of the items he purchased and sold in his last lot.
For this particular lot, he didn’t travel to Singapore. So the travel and lodging cost is not included.
Proposal:
Investors will get 50% from the profit.
The investment along with the profit will be returned in 3 months. Annual RoI is 40-100%.
Risk in this business:
1. If the shipment gets delayed, the returns are likely to get delayed as well.
2. In rare cases, items may get damaged in the transit.
ESAF due diligence and assistance:
1. We have visited his shop
2. We will assist in agreement drafting
3. We will assist in preparing the lot report
FAQ:
1. If I invest one lakh, what will I get at the end of three months?
The margin in this business is 20-50%.
Min margin calculcation: 20%
20% of 1 lakh = 20k
Your share(50% of profit): 10k
Max Margin calculation: 50%
50% of 1 lakh: 50k
Your share(50% of profit): 25k
Most of the time, you’ll get somewhere in between. However it’s a good idea to keep minimum margin and expectations.
2. In the event of a loss, what would happen to my investment?
Equal partner in profit and loss. Since the profit is 30%, you can bear loss of up to 30%
Advantage of investing in this deal:
1. Higher RoI compared to fixed deposit and mutual funds
2. If you want to learn this business, you may accompany the business owner in his trips at your own cost. You can learn to do this business or about foreign trade in general.
3. You get to support a small business owner.
Disclaimer:
This is an ESAF initiative to help business owners who have the expertise and are seeking capital. Please do your due diligence before investing.
