A. LACK OF KNOWLEDGE AND PROPER INFORMATION AMONG INTERMEDIARIES
Most professionals and eager analysts of the industry often lament and bemoan one nagging fundamental shortcoming of the modern Internet-generation class of agents, dealers and different intermediaries – namely, that, as a class, they tend to be overly handicapped and plagued by way of a well-known loss of schooling, education, expertise and right records concerning the real nature and workings of international exchange, and of its basics and basic methods.
Mr. R. Ambardar, a broker experienced for over 10 years in international marketplace improvement and advisory offerings who has for my part closed several petroleum offers, calls “lack of enjoy and expertise” one of the most important primary motives why many brokers and facilitators fail in crude oil endeavors and by no means near any deals. “Many people are attracted into this enterprise due to [the tales they hear about the] sort of money you possibly can earn on account of his deals,” Ambardar asserts. “Many dealers fail, [however], to take into account that requirements to achieve this commercial enterprise are very traumatic, [and that] only those who’ve years of fingers-on enjoy and thorough information of the enterprise can strive to do well as middle-men.”
Echoing what almost each other reputable professional inside the subject emphatically asserts, Ambardar provides, that “To turn out to be a ‘Facilitator’ in oil commercial enterprise,… What you really want is right know-how and know-how [since this is what will help] you hook up real consumers and dealers. One ought to be in the industry for long to have obtained understanding associated with the dynamics of this enterprise.”
In the same vein, Davide Papa, the co-creator with Lona Elliot of “International Trade & the Successful Intermediary,” one of the most prominent professionals in the area nowadays at the primary method and strategies of international trading by means of agents and intermediaries, asserts that,
“Without the considered necessary know-how of an appropriate buying and selling approaches, you [the broker or agent/intermediary] are truly losing some time via trying to exchange. The significant majority of investors you’ll meet on the Internet don’t know how to near a deal. Most don’t even realize the way to start a deal effectively, not to mention bringing one to a hit end.”
Consequently, says Mr. Papa, “Anyone trying to do commercial enterprise with those types of intermediaries [or with their procedures] will also be not able to close a deal or gather a cent in commission, regardless of how lengthy they alternate for or how difficult they are trying.”
What Misguided Agents and Intermediaries erroneously think is “buying and selling”
Yet, as a factual matter, maximum (in deed, just about ALL) brokers and intermediaries that one meets on the Internet who claim they have oil to sell, or who, as an example, flood my Consultancy Office with “offers” and “deals” with the aid of the dozens every hour of the day each day, haven’t got even the foggiest clue of what is surely concerned in right trading, or how it works or is achieved. Almost to a man or woman, they basically assume that all there’s to oil “trading,” is largely the accumulation of any number of some copied standard documents – ‘SPAs,’ ‘LOI,’ ‘FCO,’ ‘ICPO,’ and what have you – with nearly none ever established, and passing them around on the Internet to capacity customers or their agents, asking them to “just signal,” “simply sign”! In deed, what is even worse, they hardly ever have the foggiest idea of even what their PROPER feature and responsibility is, or ought to be, as an intermediary in the cutting-edge Internet generation of TOO many facts and data, but TOO LITTLE quality or actual information and records!
B. A MAJOR WAY IN WHICH THIS LACK OF KNOWLEDGE BY THE INTERMEDIARY IS MANIFESTED
Quite oddly sufficient, one of the primary however maximum essential methods in which this woeful pervasive lack of expertise and records of the fundamentals and right strategies manifests itself at the part of the intermediaries, is the exceptional lack of knowledge among them concerning even the simple motive and right feature or responsibility which the contemporary intermediary is meant to serve as the oil dealer and within the marketplace. Most Internet intermediaries are NOT even privy to what EXACTLY this is!
THE TRADITIONAL ROLE & FUNCTION OF THE INTERMEDIARY
First, allow us to start with searching for the “traditional” position and feature of the middleman inside the market. This description of the obligations and functions of a facilitator given through Sam Nelson, the author of a stated primer on oil buying and selling it truly is generally utilized by many brokers and retailers, best represents, possibly, the thought of the traditional primary function of the middleman in oil offers:
“Facilitating a commercial enterprise [by a Facilitator] is an act of arranging business activities as contained in an agreement and bringing two events into an agreement in the direction of the easy implementation of a settlement as defined by the agreement methods… The facilitator is the man or woman, or group of people, arranging commercial enterprise activities as contained in an agreement and bringing parties right into a mutual agreement towards the easy implementation of a contract as described in the tactics of the settlement… There are people who work as facilitators in extraordinary sorts of commercial enterprise transactions, for instance, ‘Currency trading.’ ”
Nelson adds that, as a Facilitator on the seller’s side, for example, “the vendor relies upon on you to discover an official buyer. You, because of the facilitator, turn out to be the hub for those offers. Honesty is required in your element. You can facilitate a deal as a purchaser or seller’s facilitator but I will endorse you not to be on both sides on the identical time for the identical deal. That will be an absolute greed.”
Robert McAngus, the Chairman, and CEO of the McAngus Group, a Marbella, Spain-based totally worldwide conglomerate actively engaged in the business of primary commodities, together with oil merchandise, thru its network of places of work and partners in Africa, Europe, the Far and the Middle East, and the Americas, offers his personal description of the same old traditional function of the middleman, this manner: “a dealer’s entire process is to help a petrol company’s buying and selling department locate or promote oil and associated products in order that he’ll acquire a fee while the deal comes together.”
In other phrases, by means of conventional requirements, the primary role and function of the intermediary inside the so-called “secondary” marketplace petroleum trading operations, is absolutely the “sourcing” feature – that is, the job of locating the suppliers of the product and matching them with intending customers, in return for which the sourcing booking or agent will obtain fee bills for effectively completed deals.
THE NEW PARADIGM SHIFT IN THE ROLE & FUNCTION OF THE INTERMEDIARY
But here’s the primary factor to be made here, but. And this is this: That this old, “conventional” role and function of the dealer or the middleman in crude oil and petroleum products offers have modified in this present day era of the Internet – and in a big, big and drastic manner! And all and sundry who operates inside the oil exchange enterprise nowadays as a broker, agent or other middleman with out understanding, or information or recognizing this crucial modern-day-technology truth, or who maintains to function as though, as inside the past, all this is required of him is simply to find a vendor and “in shape” him with a client, or vice versa, totally misses the mark as to his right area or characteristic today in the market, or his real marketplace fee or worth.
In deed, in this writer’s studied evaluation, lots of the issues and bad factors (the so-known as ‘darkish side’) of the international commodities trading enterprise which have often been on the whole attributed to the role and involvement of the modern intermediaries’ in the business – the lack of ability of most to successfully near offers or to make a commission, the involvement of many in scams and pretend offers, and so forth – can be without delay traced to this factor on my own: particularly, the failure on the a part of the intermediary, whether knowingly or otherwise, to regulate and alter his business processes and method of operation to align with this new “paradigm” shift of the cutting-edge Internet generation marketplace area.
I’LL SUM IT UP SIMPLY THIS WAY, IN A NUTSHELL: True, in the beyond, BEFORE the prevailing-day enterprise ethics of the laptop/Internet-technology, what the common buyers considered to be the extra important want and carrier from an intermediary – and one approximately which, consequently, the dealer generally sought and employed the services of the middleman for – turned into ordinarily to gain trade leads and call assets for business potentialities. But on this gift put up-Internet technology, however, what the average dealer now basically needs and wants from the broker or intermediary, isn’t a lot the alternate leads or contact resources. But, alternatively, he commonly needs and wants the booking/agent intermediary to get him exchange leads or touch resources and data that are duly established or verifiable. Or, to position it another way, the trader’s primary need and maximum essential interest in an intermediary nowadays, is for the dealer and intermediary to aid and help him in verifying and doing DUE DILIGENCE on the exchange leads and possibilities or contact assets which can be now normally to be had in superabundance, whether or not on line or offline.
Jeffrey P. Graham, President of JPG Consulting, a Philadelphia-based global commercial enterprise consulting and studies firm, makes that point instead quite virtually in his conventional 1997 essay titled, “Evaluating Trade Leads.” Graham, who became one of the first to make that profound commentary, states that with the approaching of the Internet, the predominant trouble and situation of international traders extensively became, NOT having too few or an insufficient wide variety of change leads to the buying or selling of a particular product or service but having too many and too much of it. And that with that profound alternate, the imperative problem for the sector traders became the potential and facility of investors – and the agents, retailers, and intermediaries who paintings for them – to carry out excellent DUE DILIGENCE at the trade leads offered by means of or about a company or product, and being capable of do capable assessment on such business enterprise or product as to its genuineness and satisfactory.
Thirty years ago, Graham says (which means earlier than the Internet have become an aspect), there were far fewer companies doing commercial enterprise as traders and intermediaries, and, secondly, the project of finding out how credible an agency changed into, become an easy be counted of simply checking the telex cope with and acquiring a few financial institution references at the organisation.
However, Graham adds, all that has substantially modified – thank you, or no thanks, to the Internet!
Graham sums up this view this way:
“Until very recently, having access to reliable assets of alternate leads to becoming a totally pricey and time-eating proposition for plenty small and medium sized agencies (SME’s). In the United States, [for example], the Department of Commerce changed into the sole purveyor of exchange leads… Groups paid a month-to-month subscription charge then which will gain get admission to what turned into available, whether it changed into appropriate or no longer. [However], with the proliferation of alternate lead resources to be had on the World Wide Web (WWW), get right of entry to trade leads is now not a trouble. What has now not modified, but, is the time worried in dealing with change leads.
Enthusiastic proponents of the Internet will continually tell all of us inclined to droop not unusual sense that extra is higher. What is incorrect with this concept… Is the belief that the additional information furnished by means of the Internet may be effortlessly assimilated right into a commercial enterprise and made useful without any value whatsoever; [or that], therefore, the proliferation of trade leads now available on the [Internet]… Ought to translate into more and higher possibilities for all and sundry. [The reality, however, has been that] Nothing may be further from the fact, due to the fact the actual hassle with exchange leads, is that maximum of them are of the questionable fee.”
Asserting that “an alternate lead in 1997 approach some thing quite unique than it did in 1977,” Graham adds that:
“The Internet provides troubling troubles even for the most experienced global enterprise people because of the widespread amount of misleading statistics that are pumped into the machine; a system which isn’t but geared up to process this amount of statistics. One trouble is, surely, [about being able] to assess the agency which posts the trade lead and this is now a totally tedious manner… Since 1993, while the browser technology genuinely commenced to take off and the Internet started out too noticeably end up a marketplace, the changes had been surprising… It isn’t unusual for those who are simply wishfully questioning, to write down and publish trade leads that are designed frequently to elicit responses. These ‘corporations’ [put out]… What many call ‘exchange leads’ but which nearly constantly emerge as worthless junk… Such postings can send corporations on time eating and very expensive fishing expeditions which yield no sales and have little capability for future commercial enterprise as well.”
TRANSLATED: In quick, the valuable factor made by using professionals and keen college students of contemporary change history, is that the position and motive of the middleman inside the Internet-technology worldwide commodities buying and selling have passed through some drastic, even dazzling, fundamental trade – a ‘paradigm shift” or alternate – from, say, the late 1980’s and early 1990’s to nowadays. In that previous era, a rather few buying and selling trade leads existed which consisted sincerely of just records posted on line bulletin boards and from the U.S. Department of trade publications. But by means of the mid-1990’s, with the upward push of the World Wide Web, the Internet and Usenet gradually but progressively assumed greater useful function for enterprise purposes. The Internet quickly emerged as a primary and important market itself, therefore making the need for, and price of, subscribing to change leads an element of the beyond.
But, in making the subscription to and fee of exchange leads a element of the past, the Internet delivered approximately, however, a number of other big challenges of its personal – it has made the venture and system of evaluating the change lead or opportunity it’s posted on line significantly extra tough than it turned into, in comparison to the pre-Internet times of 30 years ago, such that nowadays, even as the sheer volume of alternate leads and records available is big, and the buying or promoting of leads from around the sector may be solicited at low-price or practically without spending a dime, being able to compare the authenticity and really really worth and fee of such data is the valuable challenge and mission of the time.
C. WHAT IS THE REAL AND PROPER ROLE OF THE GOOD INTERMEDIARY IN TODAY’S MARKET?
In quick, summed up very sincerely, the valuable factor is that, in phrases of the enterprise wishes and dreams of modern day international investors, there was a slow but drastic “paradigm shift” or a first-rate alternate, during the last two to a few many years of transitioning to the Internet technology, and as a result, in what the common global trader wishes and calls for from their agents and intermediaries and the Primary Duty of the Intermediary in Internet Oil Trading. Today, what they (the investors) principally need and desire from their intermediaries, isn’t a lot obtaining some sheer “uncooked statistics” regarding any trade leads or contacts, or simply what the extent and “amount” of change leads or offers they are supplied is, since the common trader generally has got admission to already to such cloth in overabundant deliver. But, instead, what they need and desire maximum specifically, is “fine records,” which means records that shall have already been nicely vetted and proven, information for which a good buy of “due diligence” shall have already been accomplished on.
That is, long gone are the old days of the “traditional” position and characteristic of the sourcing dealer or agent whilst his primary role becomes simplest to obtain exchange leads or offers about a product or enterprise prospect and simply try to “healthy” them with, or, in deed, more as it should be stated, simply ‘unload them on,’ a vendor or purchaser – with out first verifying or authenticating them, or first doing even a minimum quantity of due diligence on them as to their actual well worth and legitimacy. For the credible or authentic buyer or vendor nowadays, that traditional technique will no longer suffice or be even remotely suited anymore.
BUT MOST AGENTS & INTERMEDIARIES TODAY FAIL TO FOLLOW THIS NEW PARADIGM ROLE
Yet, that profound new truth notwithstanding, that is precisely what many a sourcing dealer and agent – in deed, the huge majority of them – who function within the Internet crude oil and petroleum merchandise buying and selling commercial enterprise these days, in large part do: they simply cross round dutifully however indiscriminately collecting and collecting SPA (Sales and Purchase Agreement) files, ‘LOI,’ ‘ICPO,’ and ‘POP’ documents, and different copied similar files, from any and each viable assets they could discover on the Internet, and without a doubt passing them over to any searching for what you offer they are able to reach, clearly with not anything ever vetted or evaluated by them regarding the reliability of the facts being peddled, or the bona fides of the companies or originators of the files or the even real life, availability or authenticity of the product claimed. No DUE DILIGENCE ever performed by the booking/agent intermediaries on the gives offered and represented in those “documents”! To the huge majority of those brokers and marketers at the Internet, notorious for in large part being uninformed and non-knowledgeably inside the business, that is what and all they suppose is “trading.”!
Frequently, the maximum that the Internet broker or agent (or dealer) who sends within the provisions would upload, is that he or she could throw in some meaningless, worthless, self-serving statements such as: “This is an actual seller.” “I can assure you this vendor has exquisite popularity and is dependable.” Some might even declare something like, “We simply successfully concluded any other deal like this with this supplier.” Yet, commonly, no shred of concrete evidence in any way, tons much less any evidence, is ever provided by means of such dealer or agent to confirm or backup any of such statements and claims – and consequently nevertheless making them (i.E., the intermediary and the offer they may have presented) not most effective simply as nugatory in the eyes of any credible client viewing the offer, but additionally aggravating and time-wasting to them, considering really no credible consumer within the enterprise could view such representations as really worth even one dime, anyway!
Think of the picture of the scornful “Joker Broker” function within the gift-day global buying and selling described through Kamal J. Southall, in his book on trade and monetary fraud and the ‘Joker Broker.’ The photo of individuals (name them agents, dealers, mandates, facilitators, and so forth) “who knowingly or unknowingly peddles and plies deals and products that, inside the massive majority of instances, are non-existent, or badly described… [and go] playing offers regularly regarding a string of agents from one case of the planet to every other, and but not an unmarried one has verified the very existence of the products to hand.”
By and huge, most sadly the present-day Internet broker/agent intermediaries largely fail to provide the cutting-edge marketplace (i.E., the legitimate customers and sellers in the enterprise) “what the market honestly desires,” natural and simple. Namely, they woefully fail regularly to provide and serve the primary duty of the intermediary in Internet oil buying and selling, to serve their Number #1 and most suitable and maximum important characteristic for the dealer, which is, essentially, to help do the essential DUE DILIGENCE on the alternate leads or gives or records they offer or come upon, before or when they bypass them directly to the dealer, and to have fully evaluated and confirmed such cloth beforehand as to their authenticity, reliability, and intrinsic worth and legitimacy.
And the result? Predictably, largely as a result of such woeful mass failure to provide the modern-day commodities marketplace “what the market simply needs,” the common broker and agent today often invariably is not able to shut any deals with any buyers, month-after-month, even after years and years of doing the enterprise. Or, worse nevertheless, partially due to this fashionable failure on their part to legitimately make sales or legitimately earn any commission earnings, lots of those brokers and agents often resort, wittingly or in any other case, to the act of defrauding and scamming other innocent investors and the peddling of faux offers.
And what then might be the remedy for this?
As a broker or agent nowadays, in case you wish so that you can make any progress and to close any deals with any credible investors, the primary and primary factor you ought to at least realize, is what must be, and is, your most important and right obligation and feature as an intermediary in this Internet generation. And then, quickly get yourself back to that critical commercial enterprise of serving that purpose and feature for the investors. You had higher got your self-lower back to serving what needs to be your Number #1 and maximum right and valued function to investors’ and supplying the current marketplace (the valid buyers and dealers in the marketplace) “what the marketplace” of the prevailing-era simply “needs.” Which is, in a word, to provide the traders change leads, offers and statistics that you shall have properly evaluated, validated, and shall have subjected to the considered necessary due diligence as to their authenticity, reliability, and intrinsic well worth and legitimacy, earlier than you put up them to client (or a dealer, as the case can be). Or, to position it some other manner, be sure NEVER to provide the sort of cloth to investors UNLESS you’ve got first completed your proper due diligence on such material – due to the fact, in brief, doing right due diligence is virtually your principal activity and cost, your ONLY feature, as a broker/agent middleman! And if you do that – and ONLY if you observe this simple technique in doing enterprise – will you be capable of see progress with credible shoppers as they’ll be greater willing even to take a look at the offers you present or to do not forget them, and no longer simply toss them within the proverbial waste paper basket outright, unconsidered and unread.
Author Benjamin O. Anosike, Ph.D. An acclaimed writer and a leading expert on worldwide oil trading methods, Anosike’s modern day e book is titled, “The Only Way the Commodities Intermediary Can Close a Petroleum Deal Today,” billed because the maximum designated, complete, authoritative step-by way of-step manual ever written and available nowadays for the use of the perfect and maximum suitable trading rules and tactics perfect for the present day Internet technology to find genuine, rip-off-loose petroleum suppliers and opportunities. FOR MORE ON THIS BOOK,
Anosike is a Crude Oil Buyers’ Mandate for numerous massive U.S. And European crude oil and petroleum merchandise buying houses and refineries, and a Consultant, as well, to non-public traders, marketers and corporations on a way to acquire proper crude allocation and license with the Nigerian government to emerge as a certified supplier of Nigerian crude oil. He has been severally dubbed the “unofficial anti-scam czar” and the “moral sense of the business” within the modern Internet petroleum buying and selling marketplace.
Educated and resident inside the United States, Anosike holds several superior stages and a Ph.D. Diploma in jurisprudence.