Married
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I am a shareholder.
If you are dealing with a major throughput commodity say like campbell's soup or Gatorade you may get freight down to 2%. You are shipping thousands of trailers a week and the major retailers want the haul back allowances to offset their own intrinsic costs. This would not be availble to ASFX as they are distributing from their own bricks and mortar. If they were in public warehousing that also services other companies they could be pooled in, it depends on a lot of factors.
If you likewise have a high turn OTC item you may have a coop level of 6% to 8%.
Brokerage rates also have significant spreads. For example Clorox pays a little under 2% on the bleach and up to 3 1/2% on the allied brands and charcoal is in the 2% +/-. A housewares item can run up to 10%.
The logic is simple, the more developmental work the higher the rate. Most serious brokerage houses also charge the principal a monthly consulting fee which can run from $2,000 to $15,000 and a pro rata share of expenses such as travel.
Many OTC manufacturers provide what is commonly referred to as a "Swell Allowance" or a flat percentage of the selling price to offset damages and returns. I doubt that ASFX could get this type of deal.
The overwhelming majority of retailers require a slotting fee. This can run from 75,000 for a frozen food entry to a free fill for a well established brand. SOmeone like P&G is never held to the standard as they typically bombard the market with media and consumer coupons forcing the retailers' hands.
Typically a new vendor may have other pre conditions such as pay on scan etc..
These are the facts of life on the shelf.
Thanks, good move, you may also want to call the entity that sells for them.
I am very comfortable with my numbers.
Thanks
CFG I havent laughed this much in eons... BTW you were so dead on in your explanations to me.
Please accept my sincere apologies, I don't know how I could have assumed that ASFX would be subject to the industry norms. I just didn't factor in their long standing and history of over achieving.
Of course they have special rules just for them.. silly me.
Bickering assumes that there is some vestige of fact in your assumptions, I have no problem standing by my numbers, I challenge you to do the same, prove me wrong, go ahead, you are all knowing
if you believe that the retailers, the logistics providers and the financiers are going to give ASFX special breaks, well I can't help you.
These cost elements have been fixtures of the industry for 50 years or more.
No i really don't need to call anyone, I will stand on my numbers.
I know the business, It was my career.
Prove me wrong, I am waiting.
further more I have done my due diligence, its called actually working in the CPG industry all of my career, running divisions and running a publicly traded CPG company
very simple, have anyone who knows the industry, post on here in writing that my numbers are wrong. Simple enough.
these numbers can swing by a point either way. but they are correct. Better yet, since you are saying that i am lying, call Greenwood and ask them. They will know the numbers on these cost elements.
you sir, In my opinion are misleading people.
if you want to call 30 years of hands on at the CEO level, with direct on point experience in this business with a fortune 50 company, selling to every major retailer in america dabbling, then you can call my numbers guessing
As to Amazon (39.99) they are likely selling it at $19.00
less 1.90 commission
Less 1.60 freight
Less 1.90 coop
prob another 1.50 to 1.75 in BMS (damages, shrink etc)
So your somewhere in the vicinity of 9.75 to 10.50 in net revenue.
Do they offer a cash discount? thats another 40 to 50 cents a unit.
what is the cost of the units.
I cant see this yielding more than $4.00 before baggage burdens.
Numbers are numbers, they much like gravity... just work. They are absolute.
I don't even know what the stuff retails for at the various outlets.
I do know that this company has a lot of apparent overhead, both operational and baggage (legal fees, settlement costs, debt service)and they appear to LOVE bricks and mortar.
at the end of the day someone needs to do the math, how many units are they actually billing out. Under what terms.
what is the actual fully burdened operating margin on each unit?
if they have in fact shipped 10,000 units (the language being used is somewhat hazy) if they have shipped these units AND BILLED THEM, what have been the costs incurred?
What have they sold them for..net net..
and what did they cost?
with the hazy financials one has to resort to some industry standards. Retailer is making at least 45% to as much as 65% margin.
So something retailing at $40 is actually being sold at $15 to $18
brokerage commissions are in the 10% +/- range.
Freight is in the 4 to 6 % range
You can assume that trade coops are in the 9 to 10 % range.
Effective Cost of money (vis-a-vis PO financing) is likely to be 7 to 9%
you do the math.
actually you got me dog! i had seen their names on the ASFX website, so your question took me back there, they actually say they (Greenwood) are part of the management team or something.. I guess i took the bait and then passed it on, my bad
I got snookered.
I am not so pessimistic Dog, the Greenwood people would not be on their board if things were so dire,
Best as I can tell they are pretty solid people.
How are they going to fund this defense? If they do not defend aggresively, a summary judgement could happen.
Good perspective, May I refer you back to prior comments that clearly state that Amazon id famous (or infamous)for ordering onesies and twosies on any new item (unless its a new line extension of an already succesful product or a major brand. They do this mostly to mitigate exposure from unsaleables that they have no recourse on.
Typically they like to order untried and / or untested items every week.
If they are ordering every week it may well mean they are buying (and selling) one or two per week.
If you do the math and take into account the number of posters on here that have shared their delight with their purchases from Amazon; well you can do the Math
i never took a lawsuit lightly, best case its an incredible waste of time and money.
i had several dismissed via summary judgement. never lost one, but they are an albatross around the neck of the company's senior execs. fact not supposition.
obviously a good sign, keep in mind that Amazon is notorious in the CPG indistry for ordering 2 and 3 pieces of an SKU at a time, so the key is to get a peek at the PO and see what qtys they are ordering.
Regarding my initial interest, there was a time when I had a sense this company had huge opportunities. I had heard somethings that bode very well. All of them about internal issues. I am what I would describe as a classically trained buisness manager and operator,so I looked at the fundamentals, at the management. A whole bunch of traditional metrics. I was stunned by the cavalier attitude some on this board have towards that stuff. At the end of the day, I was in unfamiliar waters. The whole pink sheet thing has its own byzantine dynamic. I now get IT. I don't get it but I get IT.
I try to do the right thing. At the end of the journey all that is left is the legacy you leave behind. Your kids and your family can either look at that and be proud of what you did, or in the opposite go for a name change.
Well Mike, actually, i did pick up some shares just recently, I am curious as to what happens here, so i wanted to get the filings etc.. who knows. but what i bought would not change anything here
This is the first board like this that i have evere monitored and the first non listed equity i haved ever bought.
I have questions that I will ask of the right individuals. This company has no measurable metrics, just a lot of anecdotal references and a proclivity for unorthodox actions and decisions.
If I can do some good, then all the better. There are a lot of shareholders in this deal. Regardless how they got here and whatever I think of some of the commentary here, I'd hate for anyone to get hurt. This just has a curious odor to it.
yes i did say that. i have an mba andi can tell you that Business school taght me zero about running a business. this is a developmental stage comopany, with many issues and none of them are about abstract ethereal issue, this is blocking and tackling, does he know how to do that? I don't know.
i understood that Mike, and I take your comment as a non critical factual annotation, i dont take offense at all. besides he signs everything with all of his letters behind his name. That being said the theoretical reality that is an MBA program, does not prepare you to run an operational mundane distribution business. At the end of the day, this is that kind of business. This is not a think tank or a high tech incubation enterprise. its a distribution company.
obviously management is monitoring this board. Interesting.
that is a fairly definitive statement. He could have gone further and speak to the cash flow issue, but whatever. I am sure he can follow up. At least I would encourage them to do so.
i think you and I may have a different take on that. This smells differently to me.
CFG........It comes down to who is the individual that is driving the business, Eho is drving the decisions, and influencing the path? Is that Dr. T,? I don't know the man, but typically Docs aint the best at this. Is the number 2 guy really number 1? I again do not know.
I am sorry CFG, I do not understand. Can you explain? thank you
CFG, this is all about management, IMHO. Based on the facts as they exist today, one could take the position that the business has been run, by default or design, much like how you explained the dynamic that lives within the Pink boards.
If in fact it were to happen though, that would signal to some including myself that the problems and the symptoms were in line with your opinions as expressed here....which would beg the question "have the disclosures been comensurate with the conditions on the ground"
Cash Flow is not an obscure metric, its the lifeblood of any business. Maybe worth looking at the following. What was the last verifiable datapoint. What was the real time status then, how much time has passed? Has there been any acknowledgement of any material inflow of external cash? Has there been any harvesting of internal cash? The latter is doubtful, there is not a critical mass from which to harvest internal cash. Only internal source I see would be headcount related. Payroll and footprint expenses and in the company's current cash flow environment,those are hopefully being waived by management at this juncture. Worse case I would assume they would be accruing those salaries.
Although I have no knowledge of any internal discussions at the company regarding an insolvency petition and this is the first I read or hear about it, its worthwhile acknowledging that bankruptcy is by default, the result of capital asphyxiation in one or more of its many forms.
By the same token, the only liquidation values here would be Patent related, and those are probably subject to open market standards, So there is no readily visible upside to the creditors to press for anything other than a continuation of operations. Maybe with some input or control over the operational aspects.
I don't think bankruptcy is a viable strategy. It would wipe out the shareholder's including the insiders.
CFG, I just folowed link, Only thing I saw that stood out was that they have an even board????? 4 members.
Wow, you were so right!
hi, I just dont see an ABLOC at this juncture, the PO financing is a fairly safe hedged bet. I dont know the covenants vis-a-vis lock box etc.. do you?, If there is a lock box covenant, they are pretty much iron clad in their protection
looking again at this post I will tell you that from my looking at the financials, the possibilities of an ABL line of credit are in my opinion, highly highly unlikely
thanks for the response. I am totally Pink un-savvy. You have made sense for me about what appeared to be sheer lunacy. The lemmings going off a cliff with joy. I agree on your take here. its would be damned shame. I have my own thoughts of who is gaming who and agree that the doc may take a huge fall.
I should take PINKS 101........
I am not analyzing anything, I was looking at one stock in particular, did a search and this board was one of the results. Yes as I have stated on here many many many times, I only aplly the logic that I have used in equities.
CFG, seems to have a balanced perspective and I choose to ask the question.