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  • Am I Crazy (Help)

    updated 11 months, 2 weeks ago 0 Member · 1 Post
  • Margaret

    Member
    December 11, 2021 at 1:13 am

    So I came up with a product idea about 3 years ago. Unfortunately, I had just graduated college, didn’t have much money, or space, but had a good friend who was doing pretty well for himself in the space. I told him about my idea and after a couple months of sitting on it he decided to approach me about launching this product. Well, it took about a year to get everything together and launched and it turned out to be pretty successful. Unfortunately, that is where the love story ends…. He never felt totally comfortable about us launching this together. He had a decent amount of experience when it came to launching products and had systems such as a 3pL and freight forwarding relationships established. So this past year we agreed upon a 70/30 split for cost of product good sold and a 73/27 split for profits. So now we are looking to payout/purchase more product and things got incredibly messy. I’m going to change some numbers for convenience sake, but our yearly cost of product goods sold was $100k, he paid 70k and I paid 30k. Our profits for the year were 150k. So he wants to pay me out $40.5k from the profit, but not the 30k investment—which I understand leaving it in the business to pay for additional products; however, we are left with no product and are needing to place another order and my partner wants me to fill from the 40.5k that was just paid out to me. I’ve been racking my brain to try and understand his perspective, but I don’t see it. What happened to my initial upfront cost? Was it just simply swallowed by the business or was it paid out in the 40.5k leaving me with 10.5k on my initial upfront cost of 30k? And if that’s the case, how is it that he will walk away from this with his 70k and the remaining 110k. Thus, his end year looks like 180k with his 70k and 110k gained and I will turn out with 40k with my initial 30k and 10k gained. I feel like the clear loser and this doesn’t feel at all like a 73/27 split but more like a 93/7 split. Honestly, any thoughts at all would be appreciated. – by /hq/SirMrEsk – –

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