Real buyers want ......real sellers and ........real products. Our job is to find them and we need to get paid, if we are to continue helping buyers find what they want Documentation and information is the key.Every purchase starts with the money and without it, you don't have an order, you just have product. We must know with certainty that we have the money to make the purchase. If a buyer wants us to work for him, we have to have reason to believe that he is a real buyer. So, I put together 20 questions to ask the buyer (ref. January, 2010 Blogpost herein). If the buyer can pay and has a reasonable price, then I'm willing to work for him.
Proving that I have a real seller is also part of the process, but sellers want orders from competent brokers who have documents and information. Real sellers are busy with real orders from real buyers and we can't pester sellers with requests for prices on all their products, every day, without an order. They won't give me price quotes, allocations, FCOs, commitments or even a soft offer, without a commitment from the buyer.
We can discuss price with the buyer, initially, but if the buyer hasn't shopped around, isn't familiar with market prices or has unreasonable price expectations, then the seller will regard the request as frivolous. A skilled broker asks the appropriate questions and assembles the necessary paperwork to make a professional presentation to the seller.
When brokers bring a deal to a seller, they must have something valuable to offer and information and documents are what is called for. Brokers want a real seller and we will prove that the seller has product, in the process, but the buyer's capability comes first. A buyer who is not proven capable of paying or who has not made a commitment to buy with an ICPO is not a real buyer.
If brokers arrive at the bargaining table without documents, they make of all us look unprofessional, unskilled and quite useless. Most brokers lack skills in negotiating, have no idea which documents are needed and therefore, have no means of obtaining such documents. A broker has to know which documents will be needed. A broker has to be capable of convincing buyers and other intermediaries to bring those documents forward, properly executed. Brokers have many reasons for not being able to obtain the proper set of documents. Most of the brokers I have met haven't even obtained an NCNDA, signed by the buyer. Some will go so far as to forge the buyer's name to this very important document. Forging the buyer's signature puts all brokers at risk of losing our commission. We need a real signature on the NCNDA!
All signatures must be real and all documents must be carefully reviewed by all brokers in the chain. The most competent brokers will find the mistakes and advise the others. Please try to be the most competent broker in our transaction. Make lists and use them for all future transactions. Avoid the timewasters by asking the right questions early and making a decision about who to work for and who to avoid.
When a buyer asks you to 'chase the stick', like a dog, don't go running, without asking some preliminary questions. I have prepared a list of preliminary questions and its been shared in this blogpost in January 2010. Add to this list and then the list will evolve into your own list. There is nothing wrong with asking the buyer a few questions, like:
'Have you bought this product before?'
'What did you pay, last time?'
'Can you still get product from that source?'
'What is the current price of this product?'
Buyers who have never bought before and have not shopped around will not have prices and those buyers are unlikely to make a purchase. If a buyer has a supplier aren't you curious why he doesn't buy from them again? You may ask:
'If you have a supplier, why are you seeking a new source?''
'Can you pay for this product?'
'Will you provide me with proof that you can pay?'
'Will you sign an NCNDA?'
'Do you sometimes have your signature notarized?'
'Is it any trouble for you to sign before a notary?'
From experience, buyers who do not cooperate are less likely to make a purchase, because cooperation is necessary and real buyers know it. Be decisive and don't waste time, once the odds of closing drop below your minimum chances. If the buyer is cooperative, it is more likely that he is a real buyer and can pay for the product. Intermediaries influence the chances of success too. Most of the time, you are not working directly with the buyer. There are brokers insulating you from the buyer and I have found that most of these intermediaries are incompetent. When you begin to ask them questions about the buyer, you find that they don't know much, they don't have facts or documents. They have a lot of excuses for noncompliance and they have many stories to tell you about fakes in the business. A lack of documents reveals a broker's incompetence or it reveals a buyer's lack of cooperation; the broker who stays with an uncooperative buyer is also incompetent. We can't close deals with incompetent brokers, who have no documents and possess few organization and negotiating skills.
Intermediaries must be capable of ascertaining information from buyers and obtaining the appropriate documents. Choose your cohorts, carefully; some are already skilled and some are worth teaching, but others are hopeless and will waste your time. Know what the seller needs to give us a commitment and make sure you arrive at the bargaining table with something useful to all.
Collect all necessary information from your buyer, return it to me in a proper template, so we can put it on the soft offer. I'll send it to you at your request, and you can send it out to your buyer. All brokers must sign an NCNDA, prior to exchanging documents which contains contact information of buyer or seller. I'll send you my promise not to go around you at your request, to open the door to a long term business relationship.
If you do not have a blank NCNDA, you may also get one from me so you can sign and return asap. Send this blank NCNDA to other brokers to sign as well. You and the other brokers will not need to have your signature notarized. You may also need to send a blank NCNDA to your buyer, as well. The buyer should sign, with a witness present, so he doesn't later claim that the signature is not his. A broker can't afford to put buyer and seller together, without a promise from both that they won't circumvent us. If we have a dispute, do you want to give the ICC exclusive rights to arbitrate?
You should know that the ICC doesn't arbitrate for non members and most brokers aren't aware of this. Notice that my NCNDA for does not give the ICC exclusive rights to arbitrate our disputes. If you call the ICC, they will tell you that they want an upfront fee, just to consider arbitrating a dispute for you, if you are a member. The ICC told us that they wanted a total of $88,000 and you will know more, if you call them too. When I tell brokers about our experience, they are surprised to hear that there is an upfront fee and that the ICC does not arbitrate for non members. We must have knowledge about all aspects of this business, if we are to succeed.
Sharing information helps a great deal and this blogspot has a collection of useful facts, opinions, ideas and experiences. It should be read by everyone and the lessons passed on to all that you meet. We are all teachers and if you train those around you, they can do a better job of closing your deals. Assembling the documents is necessary, if sellers are going to take our request seriously. If you can't persuade the buyer to cooperate, then you don't have a buyer. If the other brokers can't get the buyer to cooperate, then you don't have brokers. Unskilled cohorts often have their hands out and are expecting to be paid millions of dollars for their incompetence.
Surround yourself with those who have the highest skills, because this increases your chances of success. Every deal begins with money; Money to pay for products!
If you don't establish that you have the money to pay, the request is just a request, it's not an order.
The first question a broker should ask is not, 'Do we have product?', but 'Do we have a buyer?'
The skilled broker knows which questions to ask and knows what to do when the answers are given. Real buyers know that they must put out a real commitment, in order to get the skilled and professional broker to work for them. When you get a large order from an unskilled broker who has no documents, you should realize that this is a very unlikely event.
Do you invest your time or quit early?
If you invest your time, what will be required in order to make this unlikely event a likely event?
Will you have to train brokers?
How fast will they learn?
Will you have to persuade brokers to persuade brokers to persuade brokers to persuade the buyer to cooperate?
This might be a waste of time if there is a weak link in the chain. Unskilled brokers are incompetent; some are capable of learning and others are not going to learn fast enough to make the deal happen for you. You don't have time to waste and neither does the buyer. A real buyer is a very smart person with a lot of money and a lot of experience. Real buyers don't engage unskilled brokers, because they know the results from experience. A real buyer is very selective about who gets the order and who is trusted with bank information. It would be prudent to be the most capable broker you can be and demonstrate your skills early, by asking the right questions. You must convey to the seller that you have competence, because this implies that you have product and that's what a real buyer wants. The skillful broker goes from verbal discussion to written contract, in a short time.
We discuss price, first, and once we agree on a reasonable price for both sides, buyer and seller, we discuss other terms of the order. We must know where the shipment is going, how it will be packaged, who will do the inspections for quality and quantity and the process for paying for it.
It is extremely important to advise the buyer that we have no up front fees of any kind and that will be in the contract. After the verbal discussion, it's time to go to contracts. The NCNDA is the first test of the buyer's belief in you and the others on your team. If you asked the right questions and conducted a probe of depth to ascertain exactly what the buyer wants to do, you will find that your probe does not offend the buyer. On the contrary, you will convey professionalism, careful attention to detail and the result is buyer will have confidence in you and you'll get the buyer's cooperation and respect.
Buyers spend billions of dollars on commodities, such as the one you are offering here. Buyers quickly recognize a skilled broker, who asks the right questions and does not simply 'chase the [imaginary] stick', like a dog. Brokers who hear of a large order and go running off, without any facts, demanding proof of product, before they know much about the buyer are regarded as fools. Buyers will not trust a careless, thoughtless broker with a valid ICPO, because it has confidential information on it. When a broker brings you an order request and has no information, no documents and no skills, save time and reject the timewaster, because it can't close, without facts and documents. My seller will not take your buyer seriously, even if the buyer is real, because the brokers haven't a clue about how to organize and consummate that transaction.
Look at the files that are herein and consider each a valuable collection of ideas. Try to understand how each file can help you organize useful information, process an order from a real buyer and earn for you a seat at the 'bargaining table'. Your chances of getting paid depend upon your skill level.
It's not how long you have been in the business that counts, but rather, how fast you learn what is necessary to close a deal.
Hope this helps :-)
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