General Question

cazzie's avatar

Imagine you are a part owner in a store with two other people...

Asked by cazzie (24516points) September 29th, 2015

The store’s concept is based on very original and handmade items. The three owners all make very different items. They need to invite in people who can pay for space to sell their own handmade items too, so there is some double-up on some items, but their designs are so different, that everyone seems happy with their edge of the pie. Until one of the owners has a friend who makes a type of soap. One of the original owners makes handmade natural soaps and their brand is based on truth in labeling and promoting the most natural products possible. This new soap is made from a melt and pour base and it contains chemicals that are not listed on the label. In fact, the ingredients list is non-existent on this label all together. The melt and pour soap shows up in the shop without the soapmaking partner even being asked whether it is ok or not. The labels on the melt and pour soap make medical claims that the soap cures eczema and a host of other problems which is pretty illegal and certainly not ethical. The friend with the melt and pour pays NOTHING for her space in the store because she offers to watch the store for a few days a month and uses her influence to sell other things too. What should the part owner do to counter the crap soap encroaching on her territory and stealing her customers through pure lies and bad chemistry?

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29 Answers

janbb's avatar

The first thing to do is to talk the other partners about the issue and see if it can be resolved. It sure seems like the new person’s soap should not be being sold in the store and hopefully the other two partners will agree.

cazzie's avatar

Nope. the other partners decided that it will absolutely WILL be sold and that they will take no notice or concern about how the third partner feels about it. Their answer was ‘majority rules’ and it is just a bit of competition you should deal with… because one of the partners has a very popular line of earrings but also accepts other earrings, but they are from PAYING artists who pay for their space…. so that is what the soap making partner argues… but to no avail…. Must be taken into consideration that the melt and pour soap maker is a friend of one of the other partners and has a sad story with back injury and surgery and we should all feel very sorry for her….. Meanwhile, the partner soapmaker has paid over 20,0000NOK to set up the company and has to pay 3000NOK in rent every month for the gallery and the melt and pour lady pays nothing but a few days to watch the shop (which she has for free anyway because she doesn’t work and is medically retired do to an injury)

elbanditoroso's avatar

All three people are culpable for not setting out the “rules of the road” ahead of time. This sort of thing could have been avoided with planning and foresight.

What’s not clear to me is if the woman with the crap soap is an owner or not. Is she?

if she isn’t, then get her the hell out of there. She’s rocking the boat.

cazzie's avatar

@elbanditoroso she isn’t an owner. She is a good friend of one of the owners. Not only that but she has other things she sells and the soap is only a part of it. It was NEVER for.seen that the other partners would disregard the needs or values of the other partners. In fact, there were times when other’s could have been disregarded, but it didn’t happen…. but because this partner is more quiet and less pushy, shall we say, that this has happened. And she is losing money hand over fist because she is feeling betrayed. She doesn’t even feel like making soap anymore…. and hasn’t.

Dutchess_III's avatar

I would have second thoughts about being in business with someone who didn’t have the same values as me. Her shady partner can destroy her reputation, along with her own. Can she just bail out?

ibstubro's avatar

Perhaps the partner that makes the soap needs to make some melt-and-pour soap that duplicates the volunteer’s, label it properly, and sell it at cost. Take the profit out of the product, and it will go away.
Make up a display that shows the difference between m&p and crafted soap. Frosting and pasta sauce would be good examples to use to demonstrate the difference. I know a woman locally that makes delectable caramels and she’ll make them for me cheap. I’d set up the 2 displays of soap and put a dish of Kraft caramels with the m&p and a dish of homemade with the craft soap.

Inara27's avatar

Ideally, @ibstubro is right, all rules should be laid out in advance. In practice, that is hard to do. I am assuming that the three partners knew each other before the store was started? If yes, then there are conflicts on both a business and personal level.

Do the partners also watch the shop for a similar time period as the “friend” in addition to paying the monthly fee? If so, then the partner is really getting the short-end of the deal, working AND paying for the space to market her product. So, in fact there are two big disadvantages to being the partner – cash out every month, and a legal liability as part owner.

The main point I see in your description of the situation, is that the other partners do not respect her, personally or professionally. A partner should not have unfair competition from within their own store. Just because the other two don’t mind similar products is irrelevant.

I see three possible paths that make business sense:

1) If the third partner is making good profit (you indicated that she is not), then ignore the competition but make sure that, as part owner, she cannot be held liable for the false and potentially illegal claims made by the “friend”.

2) Reform the business arrangement to protect partner interests. This doesn’t appear to be possible,since the other two partners seem happy with the current arrangement.

3) Since you indicate that she is losing money quickly, then she should get out from under the store. Can she sell her share to the other two partners or a third party? If not, can she invoke the process to dissolve the partnership?

Cruiser's avatar

This a store with 3 part owners without a clear business plan and IMO doomed to fail unless the 3 get together and create a business plan that the agree upon. It’s mission statement has to be clearly defined as in “hand crafted items made from natural ingredients” and stick to that plan. Every item in the store whether from the part owners or outside craftsmen should come with a percentage of the proceeds going towards rent and overhead. Consignment and re-sale shops are good examples of this.

If this one part owner who has an issue with the melt and pour soap is now the odd man out and will have to come to terms with this. You did not specify if this part owners agreement comes with a partnership agreement which usually would spell out remedies for conflicts between the partners.

Like my old boss said…the only good partner is a dead partner and I fired one of my partners in July….one down one to go!

Dutchess_III's avatar

Partners are surely a pain.

msh's avatar

I’m feeling sorry for that unhappy partner. From what it appears to me, there isn’t any formal, legal what if’s, down on paper.
Stopping making her special natural soap seems such a waste.
If this partner is being steam-rollered by the others, and she cannot make a current jump elsewhere, there might just be a very quiet yet effective way to sell her product
** ibstubro** has the perfect idea! ( Smart! )
The hurt partner may need some encouragement and a helping hand in initial set up. But again ** ibstubro ** put a picture of a set-up in my teeny little mind.
Put both types of soap display or placement next to each other. If not possible, create an incredible display background. Make the ingrediants a huge visual portion of the display. Be color conscious of the soap colors and accentuate that in the design. ( professionally printed gives product a boost- if $ not there now- save for soon.)
Tell the natural soap maker to step up her soap’s outer wrapping to really emphasize her ingredents. Pick up a logo of some kind- copywrite it!!!- put a logo stamp ON the soap bar and a connection will stick in buyers minds on return trip to buy, if they forget names. Love the simple logo/insignia choice- it is connected forever. No joke on copywrite!!!!
Put pictures on the wrapper. Visual connections/ logo design. Move a little bit away from the ’ brown natural colors’ look. It’s passé.
Offer petite sample bars to customers- only on days when maker or help can distribute. No one turns down a soap sample. Put ‘logo’ mark on sample. If she can afford it, put a paper attached to sliver sample explaining the natural and pureness of the product, and a brief idea-don’t give process away!- of how naturally pure the product is.
Get those attached papers printed at a printing store- hand written info needs stepped up from the ‘less well made product’ and I’ll bet better than any of the other woman’s soap offerings. Look, the samples might stretch the budget at first- but quality brings loyalty. Soap can change it’s price upwards after a bit.
Have business cards just for maker and her ‘company’ contacts just in case some wish to sell her brand elsewhere. Do not put the store’s name on the product anywhere- they will be legally entitled to a portion of the earnings.
Anyone is upset—what is the saying: It’s only business, not friendship, only business…
They weren’t too concerned with this partner’s feelings, correct?
Try it!
Or not. Good luck! :)

msh's avatar

“It’s only business. Nothing personal. Just business ”
Thank you Godfather Aficionado.
xo :D

jca's avatar

@ibstubro has a great idea.

Also, emphasize the “all natural, hand made, made from scratch,” etc.

cazzie's avatar

Links to photos of current packaging for some feedback?

Here are some products non-soap but made of recycled plastic bags… Should I make more of these? These are wallets, but any ideas for something else made from this material?

Here is what the current small, depleted display currently looks like: (a picture our accountant took)

msh's avatar

OMGOSH- how wonderful!
Pix I – Its like the cool beauty of sherbet colors! Beautiful! Eye catching . Perfect logo art- nice!
Pix 2— You seriously made these? Wow. Perfect colors! Ideas- what about picture frames that open so the pictures face each other standing up = V = You could make some for regular size photos and longer for wide shots. Cool stenciling- So nice- holder for rice paper face blotting sheets. Pad of colored paper inside/ pencils inside- smaller than golf pencils..dainty. Bookmarks of size for paperback and hardback books. News story- printed books winning over screen-read books! ( yea!) Paperback covers to slip on to keep jackets cleaner (or hide what you’re reading!) :) Business card holders for purse. Men’s card holders for flat inside jacket pocket. Could you make fans-seriously. Cool air fans in a jacket that would hold up, to be kept in purse? Notepaper holders- with side for envelopes. Snailmail still occurs! (Tom Hanks types a letter to people on his old typewriters from his collection!) A holder to keep Ipad/ Kindle clean and scratch- free? Folded box catch-alls- small & medium desk size.
Pix-3— work on this one. Banish wood blocks unless you stain or paint them the colors of your products. Flower colors dont make colors POP. I bet it smells like heaven. Buy some fabric- use rubber cement- ( elmers would leak through) or tacky stick and line boxes on botton and sides of some cubbies. Zing the look. Gorgeous art on bars et al- but they don’t stand out. Make them pop! If lilac- wrapper- get slightly darker shade of fabric. Or go deep purple. Make each scent’s colors favor color of wrappers within that cubby. Again little shavings/ crystal plates to smell and touch. Cut and put cloth on bottom of square, or both sides- or scatter pattern sides- for different cubbies. No pastels- your gorgeous packaging needs pop!
Oh Sweetie! How great this is! Beautiful.
What if you put shavings, or crystals samples in small tea-bag plates so popular now. Let people smell them & touch sells also.
This is great! I wish I could smell them- it would be wonderful!
Get your name and sweet goat logo carved on a beautiful piece of wood. Or stenciled and written in ink-pen calligraphy on small platelets and folded place cards- or get place-setting holders – dainty. Wedding place markers for receptions may match your look better. Put name of flavor by smell/touch samples. And OMGosh- get the words All Natural Products~ Safe for your face… Make the words ALL NATURAL and SAFE pop.
I’m sorry, I get so excited when people do such creative beautiful things!
Good luck and stick to your guns.;)
Excellent job- beautiful palate- wow! Good for you!
Pls update how you are doing. :D

cazzie's avatar

Those aren’t my wood blocks. I should have said. They were placed there by the person who makes them because she thought they looked nice in my cabinet. They aren’t there anymore.
Each bar of soap has an unwrapped sample at the front so the customer and see and smell it. The jars of salt scrubs have a small plastic tester that the customer and open, smell and feel.
The cabinet is a priceless family antique and I won’t be gluing anything to it, but I like the idea of placing bright swatches of colour around them. I do need to make more things like business cards and pamphlets with my logo and product info on them. I’m glad you like my logo. I’m not a designer at all, but I like the way it turned out. It is a local reference to the ancient trading warfs that line the water here along the river.. which is called, Nidelva.

Making carry cases for ipads etc with the recycled plastic is a BRILLIANT idea and I think I will do just that. I will line them with some type of flannel or felt to give them a bit of a padded feel, as the plastic, while waterproof, is quite thin.

Right, time to get busy! What I’ve decided to do is to leave the shop at the end of this year. I need to make some money, so I’ll make as much as I can for Christmas and hope that will put the endeavor as close to the black as possible.

Something else I make that I wouldn’t mind some feed back on is something called cold-porcelain.

jca's avatar

@cazzie: Did the partners tell you they are sorry that you are leaving?

cazzie's avatar

@jca of course they don’t care I’m leaving. Why would they? They have completely turned their backs on me. We’ve been arguing about this for a year.

Dutchess_III's avatar

Can you strike out on your own, successfully?

cazzie's avatar

I can move to another shop for less money and less time. I was a very successful brand before I joined this partnership.

cazzie's avatar

A year ago, I reached out to another shop and they totally supported me. One of the owners was shocked at how I was being treated, so I know I have a home for my products. Sad thing is, a year ago, the partners were holding me hostage saying that I could not leave…regardless of how they treated me and my products and ethics. now, after some public appearances and mentioning things on Facebook, they are happy that I leave…....

ibstubro's avatar

What about the $20,000 initial investment?

Dutchess_III's avatar

Oh…I missed that part. Good question @ibstubro.

cazzie's avatar

I lose it.

ibstubro's avatar

Screw that. Demand a buy-out. Who’s name is on the lease? Who’s name is on the license? The tax I.D. number? You must have some leverage here.

jca's avatar

Agreed. 20k is a lot to walk away from without some kind of a fight.

cazzie's avatar

They are arguing that the company isn’t worth that. What I have done is, since they changed all the passwords on email, facebook and the bank account, I have not been putting my rent money into the account, but setting into a separate account of my own. I’ve told them to remove the crap soap and give me the passwords and transparency again and I’ll transfer the funds. They have said that at the final day, they will divide the money in the bank account and I will get a third. Worst case scenario is that I pay the rent money on the last day and I get a third of it back.

But, ibstubro has a good idea. I have to contact the property owner and arrange a new lease to have my name taken off. I may have a few words for him as well.

ibstubro's avatar

Merchant’s license?
Tax exempt ID number?

Everything your name is on would have to be renegotiated.

They have said that at the final day, they will divide the money in the bank account and I will get a third. Worst case scenario is that I pay the rent money on the last day and I get a third of it back.
You haven’t updated us to having a ‘final day’?

Huge chunks of negotiation missing.

cazzie's avatar

Well, nothing is written in stone, but they’ve decided to release me from my obligations in three months, so my last day could be December 31.

cazzie's avatar

@ibstubro the rules here are quite different. Our registered partnership company is a shell for trading our own self-owned businesses. The shell was never going to earn much. It was there to collect rent (which s tax free here) from ourselves and from other’s we rent space to so they can sell their goods in the store. The rent paid into the partnership company is to cover the rent to the owner of the property and to cover the few expenses incurred, like running the izettle system (credit card sales etc…) and paying the accountant. Because there is no sales taxable income (anything below 80,000NOK you don’t/can’t register) we don’t submit sale tax returns. The goods are never owned by the company, they are only sold on behalf. It is quite simple and elegant, if I say so myself. We also don’t need a merchant’s license. The think that needs to change is my name needs to come off the company register as being an owner in this and that is a simple form to submit. The company register coordinates with the bank, but I need to contact the landlord and tell him I am no longer part of the lease agreement. He wanted our individual names on it and wouldn’t accept the company holding the lease. Fair enough. If he decides he doesn’t like the idea of just the two of them instead of three, he could give them notice. No location, no business. I’d really love to see that happen, as you could imagine.

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