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Your problem is not unusual. However, it is extremely important to remember that in any business endeavor or in any organization, such distrusting thoughts between members or partners will bring nothing but eventual failure of the whole operation. Unlike sole proprietorships, a key ingredient for a partnership business to thrive and succeed is if the partners are able to work and trust each other.

Given your type of business and geographical distance, such risks are highly plausible (and tempting for the other partner). Even if you have a signed partnership agreement you will have a hard time controlling that part. Be sure though, that you have the first base covered: an iron-clad partnership agreement that spells the roles, tasks, responsibilities and accountabilities of each partner.

If you are doing well with the present cost of 3.00 and 50/50 with the profits, I suggest that you give your partner the benefit of the doubt that he is really giving you the right price until you have definite proof of irregularities. If, for example, your partner is really making 0.75 per item or say !.00 and makes 3,000 for the 3,000 items, that means that he is making this amount plus the 50% that he shares with you. If you make $1.00 profit per item then you make 1,500 and he makes 1,500 + 3,000. (Right)? But still you never know, he might be making more than that....

Suppose you are wrong. Instead of your doubts that he is ripping you off with 0.75, he is really making more than that. Will you stop? Or what if the cost is really 3.05 but your partner absorbs the extra amount, would you be willing to reimburse him?

You also need to ask yourself: are you comfortable with the $3 you are paying for the product (whether your partner is gaining from the transaction or not), or do you think you should insist that you pay for the product at a lower price?

The key question, however, is how much do you want your business to survive and succeed? And in so doing, what are the "indiscretions" that you are willing to tolerate? Or would you stick with your moral code and let the business change or worse, die? With him identifying, controlling and dealing with your suppliers as you are in a different country, frankly, it will be hard for you to find proof of any inappropriate behavior of your partner.

I agree, though, that partners should not take advantage of each other. Unfortunately, such behavior is all-too common particularly in the trading and import/export business. I have seen my fair share of such "under the table" arrangements in Asia or elsewhere, where the price quoted to the overseas partner is much higher while the other partner pockets the "kickbacks".

I do not know the details of your personal and business relationship with your partner (e.g. what type of equity/investment you contributed, the dynamics of the relationship, etc), hence I cannot give you a concrete response. My suggestion is to think what is best for your business, and be more open to each other to avoid misgivings and mistrusts. If you still haven't been doing this, ask him to furnish you with all the documentation (contracts, sales letters, etc.) of your contacts. Your partner may not be too happy with this, but the key is to be more involved and be more aware of your partner's part of the business.

As I see it, you have several options:

• either curb your mistrust and assume that your partner is honest or turn a blind eye in the interest of the continuance of the business;
• junk the current partner and look for a more honest person/organization who can do the dealings with the suppliers for you;
• do everything yourself and get rid of any partners or middlemen.

If you are comfortable with what you are making with the 50-50 sharing and you want to continue the business and you cannot find a better partner at this point, let it go and let the business flourish. Later on, when you have the chance, you can fly to his country and check him out directly with the suppliers. Then, you can cut him off from there if indeed your doubts are true. Then continue your relationship directly with the suppliers who will be more than willing to continue shipping to you.

Hope that this helps. I wish you all the luck..

About the PowerHomeBiz.com Guide: 

Nach Maravilla is the Publisher of Power Homebiz Guides. He has over thirty years experience in sales and marketing of various products, which covered as he jokingly describes, "from toothpicks to airplanes"  He also had extensive experience in International trading and he always excelled in special promotional ideas for  retail outlets.