By Muhammad Bey
A Women sits in front of her computer in an apartment within view of the forbidden city at 2 am, she sips tea and reads emails from people she has only spoken to on email or internet relay chat. She attempts to locate sellers in her database of contacts she can pare them with to supply water purifiers for the 2008 Olympics. A retired Businessman in London confers with a contact in Philadelphia by cell phone about a currency deal for a USD buyer in Canada. Three people hold a skype conference call about a D2 deal for a buyer in Dubai. These people all have several things in common, they may all have regular jobs, and they are all connected to the Internet and they all have a sense that they play a part in the biggest game of the new Millennium, Global Trade. These people are trade brokers.
These people do not work for companies directly, they don't always rent office space, they have no brass plate, though they may have a website. They get no salary for what may be hours of work each week. These people work for the expectation of the intended outcomes of their labors.
Many go from failed deal to failed deal, some quit having never closed a deal, other persevere until they do while learning the pitfalls along the way. All have a common motive, to secure a deal, which could net them thousands, tens of thousands or even millions of dollars in the long run.
Trade brokering is not a get rich quick scheme, it requires patience and discipline to see a honest deal through many cycle of trial and error, false starts and disappointments.
Many international trade deals involve what are called rolls and extensions, meaning that the deal call be extended for years with additional commissions later on. The soul of the broker is fired by a passion to succeed and achieve goals and dreams that they can not achieve due to lack of income or other external forces. Some trade brokers seek extra income, some strive for an entirely new life. The International Trade broker is not new. Since before the time of Christ men have ventured far away from home to seek new markets and find new clients or function as go-betweens for providers of services and potential new markets. Salt traders in the North Africa traveled 1000 miles south to the kingdoms of west Africa and back to sell salt and trade for goods ranging from gold to fabrics and jewelry. In the 14th century vast fleets of Chinese junks sailed south to Java, Thailand and Vietnam and into the Indian Ocean in search of trade, markets and new knowledge. The most famous broker of them all, Marco Polo, probable the most famous westerner in the world traveled the famed silk road reaching the China of the Great Khan, and his capital, Beijing in 1266. Upon his return he brought back gold, silk and paper money to the west. While not officially thought of as a broker nor the first to travel east to the Orient, Marco Polo and his contemporaries embody the spirit of adventure and the desire to succeed that animates the modern trade Brokers today.
Of course today, most trade brokers are traveling the Internet, the Internet has become the de-facto new silk road, salt road and ho chi min trail of the 21st century. From their offices and bedrooms they are seeking contacts, setting up alliances, makings agreements and closing deals with a tap on their keyboards. Of course, It's not as simple as I make It sound. To be a good broker requires an eye toward the long view. While it is true that you could retire after only one big deal in Rebco, D2 or Urea, you will have to endure many failed deals before you close one. It often can take months or even years to become an overnight success!
Import Export Brokering is not for everyone, it attracts all kinds though. Those who only want money will drop out after a few failed deals, those who are motivated by a desire to do good, make a difference either for them selves or others will have the staying power this industry requires. The deals are not given to the swift, nor the strong, but to he or she who can endure to the end!
To become a broker requires more than an Internet connection. You must possess the traits of a very good sales person, tenacity, diplomacy, patience and be able to absorb repeated failures and rejection. Many is the time you will come close to closing a deal, when suddenly a person in your broker chain will want to change the rules. Smelling money and motivated by greed they may forget where their interest lay and sabotage the deal by failing to perform because of petty insults to their egos or demanding more money even when their cut of the deal could be millions! Unfortunately common sense is not as common as we like to think.
The Internet has brought people together from diverse cultures and global out looks. Everyone wanting to be part of a deal may not share your views on equality, fraternity and sharing. People from cultures where poverty is high and incomes are low may at first be tempted to demand more from a deal than can be expected.
Like wise, the very wealthy involved in a deal may also try to strong arm you out of part of your commission if they think they can get away with it. The disconnected nature of international trade brokering requires that you assume some basic understandings and accept some basic truths.
1. Procedures are procedures.
This means that there are certain ways to do a deal and they do not vary much for serious seller to serious seller. You and your clients need to know this. There can be room for negotiation sometimes, but where there is no wiggle room on procedures it becomes impossible to do a deal if the buyer or seller cannot perform and is trying to conceal this fact by demanding a change in time honored procedures designed to ensure a safe, sound deal.
In some case the opposite may be true, the buyer may be unwilling to budge on their procedures, if both parties are right, then you have a stalemate and you may have to find a new dance partner for that particular deal to work.
2. Brokers work in chains-get over it!
Most trade deal involving bringing distant buyers and sellers together involve broker chains. It is fashionable to say, "well, I don't deal with broker chains".
In fact most global business deal with broker chains of one kind or another even if they don't know it. One way to address this issue is to be as close to buyer or seller as possible. It can take time but it is well worth it to say to a buyer, " I am next to the mandate"! People love to hear this sentence. So begin to find at least one source for which you are next to the mandate.
3. No one is beholden to you unless they want to be.
It is very important that you work with people you trust, People from whom you get no indication that they may ever cheat you out of a deal or a commission. When looking for suitable contacts, focus on those who share your values and are in the same boat financially. People who have been with you through a few or more failed deals are more likely to share your sentiments and moral outlook.
This will lessen the likelihood of being double crossed at the 11th hour.
To become a trade broker in the first place you need to do the following;
1. First decide if you want to work with buyers or sellers or both, choosing one side in this equation is always a good idea at the beginning.
You do not need a corporation or even an export license since you will almost never come in contact with the goods you are involved in moving. But if you want to form a corporation or a limited liability company go right ahead.
2. After you get your new company name together and order your snazzy new business cards, start pounding the phone, phone book and internet. You will need to find a company for which you can work as a representative, serving as a go between for the seller and the potential buyers. You can skip this part but if you do it will be harder to produce a solid deal if you do not have all the facts about the people you represent. Many deals fall apart because a broker does not know the truth about the goods they are touting, only to find a seller cannot sell at the 11th hour.
This not only destroys the deal, but your reputation.
4. Once you and a seller settle on working with each other you should have an agreement of some sort. An ncnd or non- circumvention, non-disclosure agreement is always a good start. The Ncnd is An agreement between two or more parties specifying that none of the parties will go around each other to transact directly with the originator of the transaction, nor will any of the parties disclose the particulars of the transaction covered by the agreement.
The terms of the agreement normally include a specified period of time during which the agreement will remain in force, and make allowances for disclosure on the part of one party to the agreement with written permission from the other parties. NCND's are enforceable in civil court. This agreement along with time to get to know one another will aid in establishing trust between you and your new clients.
Bear in mind that ncnd's fly around the internet likes birds on the wing and are considered by some to be useless. However if you can find a person or group who is basically honest, the ncnd will function for you and them as a symbol of what can be done if everyone can be trusted to do their part. You can download an International Ncnd from : http://www.mobilespeed4u.de/NCND.pdf
I want to stress that your reputation may be your strongest asset, take good care of it, because no one else will.
4. After you have found a source for a good product many people want, like toilet paper, water purifiers or money-making information you need to begin looking for suitable buyers. Next you can start to write ads for the product or service you have and begin posting them on the internet in news groups with names that begin with or include the words export, import, commerce or trade. Newsgroups with words like business are also very good choices, but be careful as you do not want to be accused of spaming. A good place to start is Google news groups at: http://groups.google.com/
Other locations of choice are trade bulletin boards, the United nation trade web site, the US department of commerce, mailing lists at www.yahoo.com ,myspace.com ,directmatches.com and google.com. I am suggesting Internet based options only because this is where the action is for the most part. There are print publications but cost is a factor if you are just starting out and most of us do not have a budget for even inexpensive advertising so stick with the net first!
5. Once you have found a suitable buyer for your product, you will need to ask them certain things regarding their request. You will want to know;
THE AMOUNT OF PRODUCT THEYWANT
TARGET PRICE..IN SOME CASES LIKE CRUDE OIL
DESTINATION PORT TO WHICH THE PRODUCT IS TRANSFERRED
METHOD OF PAYMENT.
Most of this you can learn when the buyer submits and LOI or letter of Intent.
You submit the LOI to the seller and if all is well with the LOI, the seller may request an ICPO _(irrevocable corporate purchase order) and the sale begins.
By this time people will be taking about commission, in deal like this a FPA- (fee protection agreement) is used. It is usually issued by the buyer and signed by them to cover all intermediaries such as your self.
After the buyer signed the FPA and usually a soft contract, a full contract is sent to the buyer via you or other intermediaries. Once signed the deal is usually bank to bank, the initial phases of the deal begin, this usually means the first of several or the one main shipment has begun, at this point the paymaster pays the intermediaries, including you.
You get paid, you tell you boss to shove that job and you retirement begins!!
Or does it?
Like I said, this neat scenario is of ten the result of weeks or even months of conversation and back and forth negotiations, sometimes with only one prospect, sometimes with many as you go from one failed deal to another.
Here in the real world you may have to attempt ten deals before you do one.
If you can master the lesson that each failure is a learning experience, if you can persist like a modern day Sisyphus, never yielding to the odds arrayed before you , if you can learn that to go forward in this business you must tack left and right in the face of opposition and above all remember that good old hard work , advertising, follow-up and staying in touch are the real tools of this trade, not just the internet then you will know a success others can only dream of!
Remember..quitters never win and winners never quit!!
Muhammad Nasser Bey is CEO of Capitalist International Media
For more information please e-mail:
Thewinner@Blackfiber.tv
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