I am a broker. How can I prevent seller to contact the buyer to cut me off
Post 1 of 7
This question is for the experienced export / import brokers. We are a recently founded brokerage company in US. Our client is the monthly buyer of stainless steel in UK. We have just found a supplier for them from Turkey. They will be buying around 400 tons of product every month. How can we make sure that the buyer and seller would not make a deal to bypass us. So far they do not know each other but after the first transaction because of letter of credit they will both have the contact information. Could you help us out on that please. A contract is really a solution?or what other options do we have on that.
Thanks.
Thanks.
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30 Oct 2007 09:16
Post 2 of 7
Replying to [crazy Turk]:
This is a very comon problem for brokers and something that has happened to us many times over the last few years.
It is human nature to try and find the best deal and it is advisable for you to expect this from your clients and if possible you should prepare yourself in advance.
The best suggestion I can give you is to build up a friendly relationship with your manufacturer and ask if they will help to support your business by reserving a slightly higher price for any enquiries that come from your fellow countrymen or by asking them to refer such enquiries to you as their representative.
Many of our clients have tried to source products themselves after initially buying through us and we have found that it is better to introduce them to our own suppliers instead of losing them altogether.
The comissions we earn are much smaller than the profits made from the orders we supply ourselves but there is less work required and little or no investment from us.
Good luck
This is a very comon problem for brokers and something that has happened to us many times over the last few years.
It is human nature to try and find the best deal and it is advisable for you to expect this from your clients and if possible you should prepare yourself in advance.
The best suggestion I can give you is to build up a friendly relationship with your manufacturer and ask if they will help to support your business by reserving a slightly higher price for any enquiries that come from your fellow countrymen or by asking them to refer such enquiries to you as their representative.
Many of our clients have tried to source products themselves after initially buying through us and we have found that it is better to introduce them to our own suppliers instead of losing them altogether.
The comissions we earn are much smaller than the profits made from the orders we supply ourselves but there is less work required and little or no investment from us.
Good luck
30 Oct 2007 15:12
Post 3 of 7
I think that there are two issues here that you need to resolve:
1. Customer - you need to ensure that your customer realizes the value that you add and perhaps you need to determine this first. If all you do is get online find a seller and then offer their prices to your buyer then perhaps it is difficult for the customer to see why they should be paying you money for something that they could easily do themselves. If you are however comparing products, prices, and visting and vetting suppliers, then there is a clear value to the customer in paying you a percentage to handle things for them.
So you need to make sure that you are adding a clear value for the customer - what are they paying for?
2. Supplier - as Blinky points out you also need to establish yourself with the supplier so that even if the customer does try to make direct contact with them the supplier will refer the customer back to you. Once again you need to show that add value through your services. You need to show the factory that you can get the orders without wasting their time. To do this you need to spend time with them preferably on the ground getting to know them and letting them get to know you. You need to understand prices and raw material prices and other pressures that affect the factory so that you can place pressure on them in the right places. They will respect the fact that you know the product and this will help them maintain loyalty to you even in the face of direct offers from your customer.
So again, showing that you are adding value is vital to ensuring that the supplier and the customer continue to choose you as their service provider.
1. Customer - you need to ensure that your customer realizes the value that you add and perhaps you need to determine this first. If all you do is get online find a seller and then offer their prices to your buyer then perhaps it is difficult for the customer to see why they should be paying you money for something that they could easily do themselves. If you are however comparing products, prices, and visting and vetting suppliers, then there is a clear value to the customer in paying you a percentage to handle things for them.
So you need to make sure that you are adding a clear value for the customer - what are they paying for?
2. Supplier - as Blinky points out you also need to establish yourself with the supplier so that even if the customer does try to make direct contact with them the supplier will refer the customer back to you. Once again you need to show that add value through your services. You need to show the factory that you can get the orders without wasting their time. To do this you need to spend time with them preferably on the ground getting to know them and letting them get to know you. You need to understand prices and raw material prices and other pressures that affect the factory so that you can place pressure on them in the right places. They will respect the fact that you know the product and this will help them maintain loyalty to you even in the face of direct offers from your customer.
So again, showing that you are adding value is vital to ensuring that the supplier and the customer continue to choose you as their service provider.
30 Oct 2007 17:20
Post 4 of 7
Replying to [crazy Turk]:
I think that you should make a contract with your suppliers.
If you are always keeping the business are runing runing on each others. I think that every suppliers need the business to run their profits.they will not contacting with yr buyers.
also you can't known is it your buyer are contact with your suppliers or not. because they are never told u this news.
so it depending on your buyer's side.
Is it you can sure that your buyer will not contacting with the suppliers ? how u can avoiding buyers not to contacting with them ?
I think that you should make a contract with your suppliers.
If you are always keeping the business are runing runing on each others. I think that every suppliers need the business to run their profits.they will not contacting with yr buyers.
also you can't known is it your buyer are contact with your suppliers or not. because they are never told u this news.
so it depending on your buyer's side.
Is it you can sure that your buyer will not contacting with the suppliers ? how u can avoiding buyers not to contacting with them ?
31 Oct 2007 06:14
Post 5 of 7
Replying to [Blinky]: Thanks alot Blinky, for your very helpful input.
31 Oct 2007 07:32
Post 6 of 7
Replying to [Egernia]: Thanks a lot indeed for your advices. They are extremely important. I will for sure try my best on those items. Thanks again.
31 Oct 2007 07:36
Post 7 of 7
Replying to [Stella Weng]: Thank you for your very valuable input Stella Weng.
31 Oct 2007 07:37
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