Morning Jim
I guess you caught Camp NICE without the disclaimer: IMHO. LOL
(Your knowledge of the terms of the agreement is impressive).
Almost psychic eh, like our resident Kreskin. LOL Camp NICE has never read or nor have ever been in contact with anyone who has read, the terms of DMX & Provalis distribution agreement. There.
Dimethaid entered into an agreement with Provalis in January 2001. Under
the terms of this agreement, Provalis was awarded exclusive marketing and
distribution rights for PENNSAID in the U.K. - where an estimated seven
million people suffer from OA - in exchange for meeting minimum sales targets
by March 31, 2002. Dimethaid is entitled to terminate the contract for failure
to meet the sales targets established for the first contract year.
The question is, defined "sales targets"?? Whose sales targets? The DMX NR almost suggests the benchmark was UK sales of Pennsaid. It doesn't suggest its the distributor's purchase volume or $ of manufacturer's product, like I insinuated.
What makes sense here?
If its defined as UK sales of Pennsaid, then Provalis' success (or keeping the distributorship) is dependent on a business risk, namely sales. How many business people tie themselves down to an event they cannot control? If Provalis did so, I guess they must have had naive confidence. Their mistake. Doah!
We know Rebecca clearly distinguished they entered into a distributor agreement. Not a license, nor consignment agreement.
Any reseller, channel partner, or distributor agreement I have ever seen (BTW not many), the manufacturer or wholesaler wants a volume, a quota, or a general commitment of purchases (usually an annual commitment to purchase x vol or total $) from my company before I receive certain rights. One example of a right, and the biggest, is pricing and quantity break levels. (If a manufacturer ever offers pricing and level breaks before getting volume commitments, then they are either poor negotiators or desperate for sales.) If a manufacturer chooses a larger distributor (one who normally makes larger purchase committment), then the manufacturer normally takes a smaller margin. Vice versa if a manufacture chooses a smaller distributor (smaller commitment), the manufacturer usually gets a larger margin.
Awarding the distributorship had to be based on some fundamentals. Is Provalis credit worthy, can they pay for purchases, what did they offer (ie they pay for all cost of marketing and launch), what promises (ie ramp up sales staff to 42 head count. The original sales force head count we can assume was not satisfactory to DMX), what did they represent (ie Provails said they understood the UK market, blah blah blah), what benchmarks (I assume and argue its purchase related but can be argued UK sales targets), etc?
Camp NICE's position is Rebecca made a business, a commercial, a relationship decision. A decision that always comes with a risk. A risk, especially when tied to granting of an exclusive right.
In hindsight its so easy for threadsters to call it a Rebecca mistake. Camp NICE understands the logic that led to this conclusion but doesn't endorse it. There were only a few who predicted Provalis was going to fail a year ago because Provalis was a small outfit (Camp FUD), but in reality absolutely nobody knew.
Practically, whoever felt that way a year ago should have either sold or shorted DMX.
I would argue everyone's decision to buy, sell or short DMX is no different than Rebecca's decision to award the distributorship to Provalis. She looked at a picture painted with best prevailing information. She placed her bet that Provalis would prevail fullfilling their obligations, representations and promises. Now she is cutting her loss. Bravo.
Provalis, you are the weakest link. Bye bye!
"Next" Wolf 2002 |
