There are some common deadly don’ts and mistakes frequently made by brokers in trying to close deals.
Most (in deed, just about ALL) brokers and intermediaries that one meets on the Internet who send out “offers” and “deals” each day claiming they have oil or oil products to sell, haven’t got even the foggiest clue of what is even proper trading, or what is involved in proper trading or how it works or is done. Almost to a man or woman, they essentially think that all there is to oil “trading,” is basically to accumulate any number of some copied generic documents they can find – ‘SPAs,’ ‘LOI,’ ‘FCO,’ ‘ICPO’ and what have you – with almost none of them ever verified, and just keep passing them around on the Internet to potential buyers or their agents, asking them to “just sign,” “just sign”! In deed, what is even worse, they hardly ever have the foggiest idea of even what their PROPER function and duty is as an intermediary in the modern Internet era of too much information but too little quality or genuine data!
True, in the field of oil trading and petroleum trade deals, as in the field of law, ignorance of the rules is NOT a legitimate excuse for breaking the rules. However, simply because these brokers and agents are generally untrained in, and badly misinformed and uninformed about, the proper procedures or rules and protocols of doing modern international trading before they plunge into the business, they simply don’t know any better, and coupled with the fact that they’re often badly blinded by sheer greed and false notion about the petroleum trading business being a business in which to ‘strike it big and fast’ without much work or knowledge as an oil intermediary, these intermediaries mindlessly plunge ahead, nevertheless, and keep passing those same, old, flawed mumbo jumbo procedures (so-called ‘joker broker’ procedures) around the Internet world, down the web of prolonged “daisy chain” of the extensive Internet broker network.
And the result?
It invariably leads to the common woes of the brokers and intermediaries — namely, woeful failure on the part of most or nearly all of them (some 99.9% of them, according to one study) to find any buyers, or to close any deals or earn even a dime in commission – even after years of trying their hands at working as an intermediary!
For a serious seller of oil or his broker or intermediary, a vitally critical question is: how to close petroleum trade deals in the correct way and manner.
Outlined below are the major common 11 deadly don’ts for oil brokers in closing oil deals. In deed, I call them the lethal “DEAD ON ARRIVAL” mistakes of oil brokers and dealers!
1. Don’t Even Get Into the Business Until You’ve First Got the Requisite Training, Preparation & Education
Don’t ever rush into it, or rush it. FACT: There’s a great, great deal of learning and mastery of details that need to, and MUST be, done before you can ever find success or even understand or do well in the oil trading business! Take strictly to heart this advice offered by experts who have studied it, and by respected business gurus who have successfully done the business. Don’t even ever try to act or function as a broker/agent intermediary (not to speak of a trader) in the international commodities and petroleum trading industry UNTIL you have first put in the necessary time, resources and hard work required to learn the business, and have actually acquired the requisite education, training, experience and knowledge in the fundamentals of the business – comprising the practical methodology, rules, knots and bolts, and procedures of it.
Sidestepping or ignoring this seemingly simple advice by brokers and agents and mindlessly plunging right ahead into the business, any way, has almost universally been the single biggest and most strategic but deadly mistake on their part, sooner or ultimately landing them only in woeful failures and disappointments in closing any deals. It is a common behavior that is often fueled and powered by wild fantasy or mythological notion that most naive, greedy and uninformed dealers and intermediaries often have or been lead to belief that one can actually succeed, in deed make it big, in this business otherwise, without much education, training, experience in the industry.
2. Don’t look to turn instant millionaire without work or efforts in this business.
It just doesn’t work that way in this business. Never! Far, far, far from it!!
3. Don’t Just Pass Around Joker Broker Documents.
Don’t just pass around on the Internet the same, old, tired, bogus, annoying joker broker “documents” that nobody reads – LOI, ICPO, FOC, POP, etc. Or, at the very least, learn and know the right ones to use, and when and how to in a deal. Why? Because no credible buyer even looks at or reads such papers, especially when the paper is from an unknown, unestablished “Internet” trader or intermediary, and especially when it’s not properly presented, such as presenting them with no separate statement of analysis or research done on the principal or offer. Be aware that, in deed, rather, quite often, for a credible and experienced buyer, seeing such documents and procedures immediately gives you away that you’re probably a newbie or joker broker trader who either really has nothing to sell or is a novice or uninformed fellow in the business.
4. Even With LEGITIMATE Documents, Don’t Pass Them Around Unless There Has Been Due Diligence.
There are some situations when the application of certain “documents” may be legitimately appropriate, such as in the use of documents like the SPA, BL, ATS, ABS, and the like. But even in such particular situations, you must still be sure not to just routinely or indiscriminately pass them around – i.e., not UNLESS they come with (you provide them with) a simple way by which the buyer can readily verify and confirm them as to their authenticity and genuineness. If you do otherwise, you’re almost guaranteed – no one would read them. Most buyers simply view such papers, off hand, as copied, forged and worthless pieces of papers that are not worth wasting even a split second on!.
5. Don’t be a Joker Broker, or Behave Like One.
That is, basically, don’t ever be the type of broker/agent intermediary (or trader) who goes around peddling fake deals on the Internet, whether knowingly or unknowingly; who frequently passes around totally unrealistic and impractical or unworkable procedures for doing a deal, and who, oftentimes, is innocently and naively trying to close a deal for someone who they might claim or believe to be real, but who actually is not, but being that they never verify anything in order to be able to know, they just peddle and shove around those unverified worthless offers and bogus documents, any way, annoying everybody. That is, in short, simply don’t be a jerk, the kind of seller or intermediary described by one expert in these terms: “[a member of] underground string of International brokers trading meaningless offers and circumventing each other, left and right, [which] illustrates well the term ‘Joker Broker’ and resembles, often, a Zoo full of monkeys.”
6. Don’t Present an Unworkable or Unrealistic Set of Transactions Procedures
A good, realistic, reasonable transactions procedure that is practical and workable, is almost everything in this business as to whether an offer will materialize or not. For example, if you are essentially an unknown or obscure Internet seller (which is to say, UNLESS you are a Major or an otherwise fairly established and well-known dealer in the industry, for example), don’t send a potential buyer a procedure that asks that buyer “just sign contract, just sign contract” with you, when you’ve not yet provided any evidence, FIRST, that establishes that you’re a legitimate or safe seller of the product, and don’t slot that it submit to you an LOI or ICPO, etc., with its banking details to you. Don’t ask a potential buyer to provide you a POF showing that it can pay for the product, when you yourself have not yet shown him FIRST your (the seller’s) profile or even any record of past performance by the seller indicating that the seller has ever successfully done such business in the past. In like manner, don’t ever present a draft contract that asks the buyer to provide you (a mere unknown Internet “seller”) an upfront BCL or pre-payment or DLC before you (the unknown Internet seller) will provide a PB..
7. Don’t be in Denial of Certain Basic Facts that Almost Everyone Else Already Knows to be So
Don’t be in denial. You must recognize — and admit that to yourself — that if you’re a crude oil or petroleum product seller or intermediary in the ‘secondary’ market today, generally you have a very low public esteem and image in the trading world, and are simply just not trusted by the average buyer in the international market. At least, not automatically or off hand!
That, most especially, if you’re a person or entity sourcing oil as a “seller” or “supplier” of the product from one of these counties called the ‘hotbed scam countries’ – Nigeria, Russia, or, though to a lesser extent, even Saudi Arabia – you must recognize and admit the bitter but brutal truth to yourself, that, like it or not, justified or not, any document whatsoever that you present that’s stamped ‘from Nigeria’ or ‘from Russia,’ etc., is automatically cast as suspect and not to be trusted, or as something false or forged in the eyes of most dealers in international trade. Nobody regards, trusts, or accepts them, period! The same, too, for any word regarding the genuineness of your offer that you might utter about yourself, your seller, or your offer. And hence recognize and admit to yourself as an oil seller, that, that being the brutal FACT of the matter, there’s just no point whatsoever in your being in self-denial and trying to fool yourself by denying or pretending that it’s otherwise or not so because there’s virtually no credible dealer out there who doesn’t already hold a firm negative view on that.