Connected Home Marketing: Limited Liability Corporation

Option #1 Connected Home Marketing Procurement

Connected Home Marketing, a Limited Liability Corporation specializing in telecommunications reselling and boutique telecommunications marketing, is a newly established small business. To clarify, telecommunications reselling is the process of selling telecommunications services (e.g., home internet, landline telephone service, and in-home cable television) offered by major telecommunications providers (e.g., Time Warner, Charter Spectrum, COX, Direct TV, and Dish TV).

Although based out of Sheridan, Wyoming, Connected Home Marketing (CHM) primarily conducts business online, as this grants the firm access to nation wide sales and marketing opportunities. CHM caters to boutique markets which are

For CHM the most important aspect to consider when selecting companies to work with is retaining the right to work with multiple firms. Commonly, major service providers include non-compete clauses within their contracts. It is critical for CHM to avoid entering into any agreement that conflicts with other currently effective agreements. as a work around, the rules change for aggregators and non-compete clauses are less of a concern. However, when working with aggregators there is great concern for the stability and reliability of aggregators as they are typically also small, independent

There are multiple common types of contracts including Fixed Price Contracts (e.g., Fixed Price with Incentives and Firm Fixed Price) and Cost Plus Contracts (e.g., Cost Plus Award Fee and Const Plus Fixed Fee), in general most contracts will fall into one of these two categories. There are also a surplus of less common, more situationally specific types of contracts such as Nondisclosure Agreements and Construction Contracts. Regardless of the type of contract it is pertinent to understand the incentives and risks associated with each specific agreement. In contract procurement terms, incentives are mechanisms that help motivate and exchange risk. Through the same prism, risk is the exposure to subpar or lesser circumstances. For example, Cost Plus contracts tend to be high risk for the buyer and low risk for the seller. On the other hand, Fixed-Price contracts tend to be low in buy risk and high in seller risk (Bajari & Tadelis, 2001). CHM contracts. Overwhelmingly, the type of contracts CHM works with are forms of Fixed Price contracts. However, what is somewhat unique regarding the telecommunications reselling industry, is there is very little risk to either the party in the agreement. The primary risk pertains to chargebacks. Chargebacks occur when a customer cancels service within a given period, typically 90 days. The vast majority of reseller contracts place the risk of charge back on the buyer