INTERMEDIARY AND TRADE 2024
ILL INFORMED INTERMEDIARIES 2024
Even though FTN Exporting has changed the market place for the better, via the release of its uniform legally defined doctrine of trade for intermediaries, agent and brokers, trading in commodities, ill informed intermediaries continue to come and go, year in and year out - albeit at a reduced rate compared to the market places pre 2010, as such ill informed traders will eventually be caught out when they cross path with a USCT endorsed and highly Informed FTN Exporting educated Professional Commodity Traders( PCT).
QUICKLY ASSESSING SUPPLY
The USCT endorsed PCT must quickly assess the offer made a supplier and move on the premise accordingly.If a suspect supplier( a supplier which is not genuinely attested ) is apparent, the deal in dumped from the start. It is the start of a deal that will dictate proceedings on a deal. Get the start wrong, and the whole deal will collapses later rather than sooner. Working on a deal for months, which collapses ‘on the line’ will frustrate the PCT. The one rule that ensures that the PCT can trade on an active deals is based on a very simple premise. The PCT must personally secure the supplier. If a PCT has contacted lets say e.g: Exxon Petroleum, then the PCT is not concerned whether or not the supplier is real .The PCT is then able to concentrate on the emerging deal intently. If ISS members are in your headed group, then they must disclose the supplier upfront to the PCT heading the group. They have no choice on this matter.An informed PCT knows what is needed to close a deal, an ISS does not; but may have excellent sourcing abilities which the PCT could use.Being able to only source end buyers or goods will not close such deals, if a informed PCT acting as a buyer/seller is missing.
END BUYERS ARE A FICKLE LOT
Large revolving deals are difficult to secure let alone closes; even if you are a highly informed PCT with years of experience. Even when goods are secured in advance, the PCT needs to get the offer out to test end buyers. “If the supply side is Mars, then the end buyers side is Pluto.” Two very distinctive deals have to apply; one with the supplier and the other with end buyers–who for most are a fickle lot. End buyers often portray an image when dealing with a PCT that “ it is they” who dictate proceedings and often insist on conducting business ‘their way’ in contrary to the correct safe way. What end buyers would never do when dealing directly with a supplier, changes when a PCT makes them an offer. Initially many enquiries for a wanted product will land on our desk, from ‘end buyers’ in where FTNX would reject most and attempt to trade on the most promising deals. Once a deal starts it could take 2 months to closes at the best of times. FTNX has had one deal as ongoing in 2018 that lasted 9 months before the end buyer failed to sign the contract - 5 times, in where each time new demands were made, to which FTNX accommodated. Even FTNX forgets its own rule to ‘dump a deal’ at the start of a transaction, when initially our superior, sound and legally defined procedures are not accepted. When supply is fully assured, the PCT test end buyers with an offer; if the offer is rejected, there really is no point to try an remedy the situation by trying to fit the demands of the end buyer into the deal, as the demands are often idiotically or insincerely made.Eg;
“We will pay when goods arrive at port of destination”
“We will send a person to examine goods first ”
“ We seek a report from a Export agency“
“We want to pay with a Bank Guarantee.”
“We will pay once our inspectors port of destination examines goods”
“We need proof of product first”
“We do not went to pay the transfer fee”
“We want to open a non transferable credit.”
Etc..etc…
END BUYERS AND CIRCUMVENTION
If a PCT decides to form it own string of attached ill informed intermediaries, then the added aspect regarding payment of commission also needs to be considered. Overall, end buyers for most of the time are simply bluffing; and don’t even have the financial means to open a letter of credit is one reason such excuse become evident. But we cannot asses such a position until the end buyer examines the offer first. The other reason is to do with circumvention. While circumvention on the supply side is also apparent, it’s prevalent on the end buyer side. Even if evidence of supply is provided, a contract and DLC needs to be advised first; will often cause the end buyer to ‘hide’ or to drop the deal outright. FTNX does not provide an offer first in 2024, instead it has reverted to the orthodox trading aspect, buy serving a good quote first.The PCT can readily asses a genuine end buyer response to a ‘good quote’ and if the response bears a negative aspect, FTNX will dump the deal, and wait for / or test the next end buyer already inline. We have introduced advanced trading aspects over the years which compliment our doctrine and procedures, which may continue to be used as required.
THE PCT PROCEDURES
Mirror effect applies when dealing with the end buyer or suppliers relevant
- Email enquiry /negotiations/chat
- Good Quote
- Offer
- Contract
- DLC Payment lodged by end buyer
- PG advised to End Buyer
- If commission payments are apparent , IPG’s are advised
- Delivery as per Incoterms used
- Transport documents are presented
- Supplier gets paid
- Ship leave port of loading (POL)
- Ship arrives at port of destination ( POD)
- 90 days rejection of goods applies
- Remedy for rejection made
- If it’s a revolving contract- next delivery initiated.
A PCT is able to close a deal as per above aspect as a buyer/seller, because he or she has studied the doctrine intently, practised its application and understand what needs to be done for a deal to legally and lawfully close successfully.The PCT will need to lose some deals, even up to contract stage to obtain experience- before that one deal finally comes your way. This aspect will not eventuate in the first year. “I had designed the ‘academic level’ doctrine, which is also based on current laws and rules, so as to allow the above aspect to occur safely, so as to ensure that the PCT does not accidentally become liable for any expenses incurred–by the PCT adhering to the required procedures.”
IN SUMMARY
A PCT must becomes a ‘Buyer to the supplier, and Seller to the End buyer, in where securing supply is the hardest part of the process. Anyone can buy and sell commodities world wide; so long as procedures have been studied and practised intently–without short-cuts.The PCT must trade lawfully as a ‘Buyer/Seller’ acting for undisclosed principal. There is no other legally safe viable trading aspect that will ensure the PCT will not get circumvented.This is what the doctrine explains intently, as we break down the complex nature of business to its simplest ‘step by step’ premises. “ FTN Exporting started in this business in 1988 at a time the market place was full of ‘idiots and clowns”. There was never an ‘intermediary’” market place–it only seemed that way. Nobody knew what they were doing. It took us a number of years to work that out. The FTNX uniform world wide doctrine of trade was forged from this misadventure.It started to informally change from 2005 as procedures were tested and became refined; and did change formally with the release of ITSI. ”
FTN Exporting has had ups to 33 informed invited and mentored agents representing us at the one time, for a period of at least 6 years from 2010. String deal do not work. Intermediaries working on deals with other intermediaries attached to a Principal in a string, plying ad hoc ‘deals’ all over the place, is a waste of time. It is also damaging to the standing of a Principal PCT heading the deal as a Buyer/Seller. What does work, is for a PCT to trade alone; or with a small group of ‘smart’ or informed PCT’s prepared to act as an ISS ( International Sourcing Specialist ). FTN Exporting working with let say 4 others who follow directives, can be trusted and act honourably when using our name in a trade. Alas, such a group may take many months or even years to form. As the PCT trades alone as a buyer/seller, it will meet other like minded traders, along the way, in where the PCT can pull closer into his sphere of business, ISS members who have displayed good work, listens to directives in where the PCT and principal heading the deal, feels confident in the work the ISS members are doing. A tight trusted group whose intent is to be ‘around’ for at least 5 years or more is a formidable trading group. Longevity is an important factor as it takes time to become recognised as a PCT. Longevity also earns the PCT respect. So many traders come and go in any given year, and while FTN Exporting has cleaned up the market place, this adverse aspect remains– especially during the slow down trading period in December leading up to Christmas/New year break, when many ill informed traders enter the market place, albeit at a smaller scale than existed before the FTN exporting doctrine was published world wide. FTNX can educated those who want to learn all about trading as a PCT. In the earlier years (2005) we made the mistake in disclosing deals we had closed, which served the perception to PCT’s at the time– that they can close such deals as well; which is an incorrect way to think, and far from the truth. We can only educate others; we cannot gauge who will succeed and who won’t. Gains made by FTN Exporting has no bearing on the educational aspect. “A person needs to study the doctrine intently first to understand why fully”. Around 50% of intermediaries who have studied our doctrine were not trading on average 12 months after purchase. “As you have gathered I do not mince words and state thing as they are.” This is a difficult business and one of the most complex business applications on the planet, directly associated with “International Agency, it’s also one of the most exciting; and for the minority, an extemely lucrative business application, in the financial sense. For those who are working and are looking to trade in commodities, just study the doctrine for a few months and then practice trading in your spare time as advised in the doctrine; and then take the business seriously within ten months. Those who are not working, looking for a business that requires no financial outlay except for the study must apply the same process and only trade on potential deals; and dump suspect deals quickly while trading as a PCT. Attachment are from with people you meet along the way–who you feel can be trusted. Trust is a big issue; to have an ISS members in a string acting in contrary to your directives, behind your back or who produce embarrassing work, will damage the reputation of the PCT in the long term. FTNX will return to full time trading in 2024, for another 5 years, as the last of FTNX mentored applicants diminish by early 2024. FTN Exporting shall remain separated for the FTNX trading business from 2024.
