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Factoring Service

I run a factoring service to facilitate LEGO® related commerce across country boundaries. I have recently picked up a number of factorees in several countries. Questions have arisen about this. You, as a buyer, may have been directed to this page by one of my Factorees. (See the third link). I made it BIG so you won't miss it.

If you have questions about this you should email me at "L A R R Y P at N O V E R A dot C O M".

Note: This is NOT the Trusted Intermediary service. That is a different service, for domestic or international commerce, designed to help parties that do not trust each other complete a deal.

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Factoring Service Description (What is a factoring service?)

Factoring means that I act as the "US agent" for people located elsewhere. I accept payments on their behalf from US residents, and I make payments to US residents on their behalf. I send a spreadsheet showing all transactions to my factorees periodically so they know where they stand.

I can also clear cross border transactions by acting as a bank does, for instance I have cleared purchases between the UK and Australia because both participants were factorees so I was able to effect payment by just changing the numbers on their spreadsheets. I can also effect transactions in more complex ways.

Factoring also can transfer completion risk from the seller to me since I hold the payment on behalf of the seller.

Why is a factoring service useful?

There is a significant cost related to the movement of funds between one country and another. So, a payment mechanism that avoids these problems can be beneficial. Factoring can do that. Even a mechanism that reduces the frequency of money movement is beneficial. Factoring can easily do that.

Buyer's instructions (I'm a buyer, what do I have to do?)

If you're a US buyer directed here by a foreign seller who is one of my factorees, you need to send me money. The amount to send is the selling price, plus the shipping price, plus my fee. The selling and shipping price are between you and the seller, I don't get involved in the negotiations of those. My fee typically is 1 dollar, more for more complex transactions. Contact me for details if you're unsure. However, don't predict the fee in advance. Leave that to the form you submit and my response

Either you or the seller should fill out my Request for Factoring form if you haven't already.

Send the money to:

(effective 25 Feb 2000)

Larry Pieniazek
300 Dogwood Ave., NE
Ada, MI, 49301

NOTE: The Rix Street address is no longer valid and you should discontinue using it.

NOTE: Also, the most preferred email is the mercator one, but the novera one still works. If you have a **CTP** one, it's long since invalid. So switch to lpieniazek@mercator.com for any questions, please...

Make it a check drawn on a US or Canadian bank, or a US money order (but that defeats the cost saving purpose for you since you have to pay for the MO)). I cannot cash Canadian money orders without incurring an additional 7 to 20 dollar fee, which I will charge back to you, so don't do that.

Make the check out to me, Larry Pieniazek,  personally. Make sure it is denominated in US Dollars (canadian purchasers, just write "US Dollars" after the written out amount) Do NOT make it out to the seller. I can't cash those, because I am not the seller! I'm somebody else. Cashing a check made out to the seller would be fraud.

Include a note with your email address and who the seller is along with your check. Your email address allows me to notify you of the check's arrival. Including the seller ensures you get credit to the proper account. I get a lot of checks and looking stuff up in my email is a hassle. I don't typically notify the buyer of check clearance, just the seller. If you're concerned whether a check has cleared, you can ask me or the seller. Include sufficient details to allow me to research your query, including the check amount, date, and for which seller it was written. If your email and real name are not fairly obvious make sure I know the correlation. If someone else wrote the check for you, include that person's name too.

If you want to settle with multiple sellers, that's fine. You can do it in one mailing. But... I prefer multiple checks. It is much easier to match the dollar amounts on my deposit statements against the correct sellers if they're separate.

Why should a buyer use it?

This is reliable, it works, and it is cheaper. However it is slower than many other mechanisms. If you are in a tearing hurry this is not the way to go. You do not HAVE to use this mechanism. If you wish, you may make arrangments with the seller for direct transfer of funds, in which case I am not involved.

What does it cost?

There are some general principles involved, that people who initiate actions pay the people that are asked to take action.

From the factorees perspective

The principle is that if you (a factoree of mine) did something because I asked you to do it (pay someone for me, or on behalf of someone else at my direction), you should make some small amount from doing it, as sending checks is a bit of a hassle. If I do something because you asked me to, I should make a small amount from doing it, same reason. However, if you receive a check  in your own currency (from some buyer)  it's settling my indebtedness to you so you don't get paid for that.

From the non factoree's perspective

You are paying the fees (one or two dollars depending on who is involved and how many factorees it takes to get it done) to avoid the direct costs of transferring money.

From my perspective

This is a useful service, and while I do it in order to make international commerce easier, it needs to be worth my while. The modest fees charged defray my time and expense. I'm not getting rich at it, believe me.


The following fees and costs will apply and will be deducted from your account as incurred. (or will need to be paid in advance if you are a non-factoree. Non factoree fees may be higher at my whim, ask first before setting up deals if my fees will make or break the deal): The following fees will be CREDITED to your account (but may be charged through to another factoree if required): The following activities may happen from time to time and will not incur a charge or credit:

Special Notes for Factorees

I may make changes to the terms of the factoring relationship from time to time. You will be notified in advance and you have the right to reject these changes.  If you do not wish to accept these changes, please advise, and I will endeavour to unwind your position completely and we will terminate our relationship. I do consider all of you friends and I do hope you find these reasonable.

Some examples. (How does it work?)

The basic process is simple but there are lots of permutations. Let's work a few examples. We'll use my friend Richard Dee, who is in the UK, for the "other end", and Jasper Janssen, who is in the NL, for "another end". Both Richard and Jasper (but no one else named) are my factorees. All transactions are denominated in USD, but may be settled in a different currency. Once I name a person and where they live, assume that they do not move to a different country for the rest of the examples.

Timing - How long to expect?

I do this on the weekends. So suppose you send a check on Thursday. It arrives Tuesday. Next Saturday, it goes in for deposit. My bank is slow, so sometimes it takes two weekends before I get notice that your check cleared. So it could well be up to a month before the funds are known to be cleared and your seller ships. If I am out of town for a weekend, or any number of other reasons, it takes longer. Be patient, but don't be afraid to ask (politely) for status.

If you're in a hurry, this is not the technology for you to use.

Does this really work? Is it safe?

I have done over 100 payments and over 15000 worth of transactions as of this writing (18 June 1999) and everyone is satisfied. That's not to say there haven't been problems. I am forgetful and sometimes need to be prodded. Sometimes I make mistakes. Sometimes things get lost. But every buyer and seller, every factoree, is satisfied with the service I provide.

This is a hobby. You're not dealing with a bank, just a person. So be polite, but ask any questions you like, remind me of stuff, tell me of problems. I and my factorees will make it right.

Will you factor for me?

Depends on where you live. I am looking for factorees in the following countries It also depends on what your reputation is. I want factorees who are known to be reliable and who have a good reputation. It also depends on whether you're willing to have a continuing relationship with me. This is a long term arrangment and we many go many months with you having a large positive or negative balance.

If you plan to sell shoddy or overpriced merchandise, or if you plan not to stand behind your stuff, I'm probably not the person you should deal with, as I would tend to take the buyer's side.

The decision of whether I will accept you as a factor or continue in our relationship is solely mine, and there is no appeal.

Who do you have as factorees now?

As of 1 September 1999, I have the following factorees:
Factoree Country
Chris Moseley Australia (formerly Chris was in NZ :-) )
Mark Harrison Australia
Ben Whytcross Australia
Horst Lehner Germany
 Mario Ferrari   Italy
Ali Vahidsafa   Japan
Jasper Janssen Netherlands
Grahame Reid New Zealand
 Hugo Matre Norway
Fredrik Gloeckner Norway (inactive, emergency use only)
Mike and Bob Collins United Kingdom
Richard Dee United Kingdom
Simon Robinson United Kingdom

This list is subject to change and you should check with me if you have any questions.

The word "Factor": derivation

The term factor was used in pre revolutionary times to describe the agents that tobacco and cotton planters used to represent their interests in market towns. If you go to old Savannah Georgia, you'll see a number of factor's offices.  See this definition from Webster's unabridged, courtesy of Dictionary.com.

Why Factoring is not Banking

Factoring is fostering commerce. The movement of money is only incidental.

Future direction

Long term I believe that LUGNET(tm) will take on this capability, and do it in a more automated manner.(see the "exchange of currencies" part of this section). Therefore I hope, long term, to be put out of business. Of course, once that happens, I will unwind all positions, so everyone is at a zero balance, by settling accounts or transferring balances to LUGNET (with factoree agreement). 
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