Just in case it is in any way unclear: No affiliation with The Lego
Group is implied or intended. See disclaimer
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".
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.
Factoring Service Description (What is a factoring
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.
With relatively limited exceptions (such as between the US and Canada,
and between Australia and New Zealand, I think...) one cannot just send
a personal or even a bank check to someone in another country. They will
have a very difficult time cashing it.
International money orders, while safe, are not convenient to obtain. In
the US you can go to the post office and get them, but it varies by country
how long it takes and what is involved. Just going to a bank often does
not work... they may not be able to obtain a money order that your recepient
Currency, while fairly convenient for the recepient to cash, can incur
expense in that someone has to pay market exchange rates. It is also not
very safe to send in the mail unless you go registered mail return receipt
requested, but I have sent currency and haven't lost one yet...
Wiring funds can be very very expensive.
Buyer's instructions (I'm a buyer, what do I have to
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)
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 email@example.com for any
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):
Receipt by me of a payment on your behalf: 1 dollar plus actual costs (usually
there are none but this covers situations like when someone sent me a canadian
money order and my CU hit me to cash it, or if anyone ever bounces a check.
This hasn't happened yet! Yaay).
Payment on your behalf to a US or canadian person or entity, not already
a factoree: 1 dollar or 50 cents plus actual costs, whichever is higher
(cost usually includes the postage, which is 33 cents in the US and 48
cents to Canada, can also include registered mail or return receipt requested
or insurance fees if you choose to use those) per attempt (this covers
the situation where I mailed eBay a check, they returned it despite taking
it the first time, and subsequently sent them a MO, that counts as two attempts), whichever is higher.
Payment on your behalf to a non US non canadian person or entity, not already
a factoree: 1.50 or 50 cents plus actual costs whichever is higher ( As
above, postage and or MO fees) per attempt (as above), whichever is higher.
Payment by me directly to you in full or partial settlement of your account:
no fee, but actual costs incurred wll be charged through (as above, postage
or MO or mailing fees) instead of absorbed.
Purchase of goods on your behalf for shipment to you whether in settlement
of your account or not: 1 dollar plus actual merchandise and or shipping
Purchase of a Money Order, whether to send to you, or to a third party, for whatever reason, in addition to any other fees associated with the transaction: 2 dollars if I can do it at the post office, 3 dollars if I have to go anywhere else to do it. This may seem onerous but the whole point of factoring is to avoid using money orders. They are a major pain for me to deal with and I want to strongly discourage their use. In addition to the higher costs, an additional delay of up to two weeks may occur in obtaining the MO.
Receipt of goods from a third party on your behalf for eventual forwarding
on to you: 2 dollars per package received plus shipping or other actual costs incurred.
Redistribution of goods on your behalf to a third party or parties (bursting)
2 dollars per package sent plus shipping or other actual costs.
Any inter-factoree transfer, no matter what the reason: 50 cents plus whatever
other fees may apply (for example a payment made by the factoree will be
passed through to the originator)
Any interface with other payment/settlement systems (for example, Bill Katz and Rufus factor for each other, for example, Todd Lehman keeps a running AucZILLA(tm) balance for buyers which I can make payments against to settle with a factoree) which results in a fee being charged through: Actual fee plus 50 cents.
- "Excessive" emails about a single transaction, 25 cents per email sent or received. This is at my discretion. An average transaction should take no more than 3 or 4 emails to complete, especially if the parties have read this page and used the Request for Factoring form to collect the needed info. I had one transaction where the buyer sent me over 8 emails before the transaction was even initiated, asking questions that are answered here, then did not get the payment details right. This is a transaction that would probably get a charge or two. Maybe even 3. The funds recepient will be charged and will have to collect from the person who caused all the charges.
If your account shows a 1000 USD or more balance in my favor you will be
charged simple interest at the rate of 12% per annum, calculated and charged
whenever there is a change in your account balance due to a transaction,
using a nominal 365 day per year fractional percentage
The following activities may happen from time to time and will not incur
a charge or credit:
Payment on behalf of myself, another factoree, or a third party via check
drawn in your local currency and mailed to an address in your home country:
1 dollar or actual costs plus 25 cents, whichever is higher (if those are
higher, please advise prior to final settlement of the transaction)
If your account shows a 1000 USD or more balance in your favor you will
be credited simple interest at the rate of 4% per annum, calculated and
credited whenever there is a change in your account balance due to a transaction,
using a nominal 365 day per year fractional percentage.
You may receive a payment from a third party, which will be shown on your
account as a debit (reducing your credit or increasing your debt) but will
not accrue or incur any additional payment to or from you
Any AucZILLA account transfers from my account to yours will be free as
long as Todd does not charge a fee. If and when he does, the fee will be
50 cents plus his fee, per the "interface with other systems" bullet, above.
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.
You may decline to make a payment to a countryman if I owe you money. However
if you owe me and the payment does not change the sign of your balance
(so that I owe you) you may not decline or I can terminate our relationship
and expect full payment of your position.
You may not decline receipt of a payment from a countryman except in extremely
extenuating circumstances (ask me, I can't imagine why you would not want
to receive money but maybe there's a reason)
All accounting is done in US currency, even when I ask you to make a payment
or receive a payment within your country. In that case use a mutually agreeable
exchange rate (between you and your countryman). If asked to set a rate,
I will use the OANDA rate calculator on my site as of a day that I arbitrarily
choose. (see here ) You're welcome to use it as well, but I will not be involved in
settling rate disputes.
Any sending of currency by me or others at your direction whether to a
third party on your behalf or directly to you is at your risk, not mine.
We have not lost one yet but there's always a first time.
Any receipt of currency by me is at the risk of the sender, so don't send
Received Money Orders clear immediately, Checks clear when my bank statement
showing them arrives
You are responsible for communicating with your payees, I will try to copy
them but cannot guarantee it.
Statements are kept in MS Excel, and are sent periodically
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.
Richard has something for sale. He sells it to John Smith, who lives in
the US, for 120 USD including shipping. John sends me a check for 121.
I cash it. When it clears I credit Richard's account with 120 and Richard
ships the item to John. I make a dollar on John Smith.
Richard buys something from Fred Johnson who lives in the US, for 115 USD
including shipping. I send a check to Fred Johnson. When it clears, Fred
sends the goods to Richard. I debit Richard's account 116.00. I make 1
dollar (minus 33 cents postage) on Richard.
I buy something from Scott Glasgow, who lives in the UK, for 95 USD including
shipping. I credit Richard's account 96 USD and he sends Scott a check,
made out in UK pounds at an exchange rate he and Scott agree to for the
equivalent of 95 USD. Scott sends me the stuff. Richard makes a dollar
minus postage on me.
Richard's account balance is getting high and I need to send him some money.
I mail Richard 200 in US currency, registered mail, and debit him 200 plus
the actual cost of sending it. The idea is not to have to do this very
often. No one makes any money on this transaction. Richard doesn't have
trouble cashing US currency.
Richard buys something from Jasper Jannsen, who lives in the NL, for 85
including shipping. I debit Richard 86 and credit Jasper 85. I make a dollar
Jasper buys something from Scott Glasgow for 95 USD including shipping
to NL. I credit Richard's account 96 USD and debit Jasper's account 97
USD. Richard sends Scott a check for 95 USD expressed in UK pounds. Richard
makes a dollar on Jasper minus postage for sending the check. I make a
dollar on Jasper.
Hans Brinker buys something from Richard Dee for 95 USD. Hans lives
in the NL. Hans sends Jasper a check for 96 USD expressed in NL Guilders.
I debit Jasper's account 96 USD and credit Richard's account 95 USD. I
make a dollar on Hans.
Hans Brinker buys something from Scott Glasgow for 95 USD. Hans sends
Jasper a check for 97 USD expressed in NL Guilders. I debit Jasper 97 USD
and credit Richard 96 USD. Richard sends a check to Scott for 95 USD expressed
in UK pounds I make a dollar on Hans. Richard makes a dollar on Hans minus
postage for sending the check.
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
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:
||Australia (formerly Chris was in NZ :-) )
| Mario Ferrari
| Hugo Matre
||Norway (inactive, emergency use only)
|Mike and Bob Collins
This list is subject to change and you should check with me if you have
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.
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).
Return to: Home or Lego®
Backgrounds courtesy of Fibblesnork
(Copyright held by by Todd Lehman)