Precautions Necessary for an Online Brokerage Business
Maybe no business requiring little or no capital pays as big as the online brokerage business. Perhaps this also explains why this business attracts so many rogues, dreamers, time-wasters and even mischievous people. Knowing how to avoid these characters is one of the keys to your success.
As a broker you will be putting buyers and sellers into contact with each other. Once the two parties know each other, they may kick you out of the deal. The best way to ensure that you remain a party is to sign a Non-Circumvention and Non-Disclosure (NCND) Agreement with them. The widely used NCND Agreement is the International Chamber of Commerce (ICC) NCND 500.
Parties entering into this agreement agree not to circumvent each other on any transactions with any sources and/or principals disclosed by each other's parties, without prior approval. They also accept not to disclose or permit to be disclosed the identity of any sources and/or principals already identified by other parties. Essentially the spirit of this agreement is to do what is fair and equitable. The NCND therefore will prevent partners from bypassing you to work with each other and so deny you commission.
Get a lawyer to handle your legal matters. You would be surprised to learn how lightly people take contracts signed over the net, especially the NCND, even despite supplying their details, signatures and company stamps. Partners who are not serious will back out if they learn you have a lawyer. Those who agree to go ahead under this circumstance are likely to be serious.
However before signing anything with anybody, you must first check their credibility. Ask all prospects to supply proof of previous performance. By requesting this evidence, you may avoid people who would waste your time. Is this enough cover for you? No!
Let sellers make you offers under penalty of perjury. One disheartening occurrence in the online brokerage business is that people will sell you their empty dreams. Once you are bound by an NCND and the party makes you a phoney offer, you can let your lawyer sue for perjury. You will be forwarding offers to buyers and when the seller is unable to supply, you are accountable to your buyer who, often, do not take kindly to failures to perform. But are all the buyers serious?
Not at all. One of the banes of the Internet is that it can make anyone appear important. Don't take anybody on their own words. If you have a product and a buyer show up, ask for an LOI (Letter Of Intent) and BCL (Bank Capability Letter). Supplying the LOI only on the end buyer's company's letterhead shows the seriousness to purchase the product. The BCL, issued on the letterhead of the buyer's bank, demonstrates that there are enough funds to cover the payment. Your bank will check the availability of funds from the buyer's bank. This saves not only a lot of embarrassment but also heartaches.
As a broker you gain is only from commissions. When one is in view, ask for a commission protection agreement, usually called a Fee Protection Agreement, FPA, from whoever is to pay you. It is common to see parties default in the payment. Should that happen, the FPA will be your legal document to sue for your money.
To enable discussions between a buyer and a seller proceed smoothly, they often ask for all parties to sign an NCND Agreement so that the broker can step aside without fear of being sidelined. Making this concession ensures the smooth running of the discussions but could be disastrous for the broker. Yet this does not mean that the broker must stand between the buyer and the seller, wheeling back and forth messages between them. No serious buyer or seller will accept this. A broker, instead, should give a buyer and a seller direct contact to each other but insist that they send him copies of the messages they exchange. This is to enable you follow the discussions. Should the parties fail to comply, you must insist that they do so. If they persist, don't hesitate to withdraw your offer.
Receiving copies of mails exchanged between your buyer and your seller is crucial for some reasons. First of all, it enables you to know how the business is going. Sometimes matters stall as a buyer or a seller might prefer to give his attention to another business and you will need to prod the discussions. Also, when you don't participate in the discussions and all of a sudden one of the partners informs you that the deal did not go through, that leads to a lot of suspicion. But the worst doubts come when, worried by the silence, you ask the parties for a feedback only to be told that the deal has fallen through. But that is even better than when you leave a buyer and a seller to discuss between themselves and in the heat of the negotiations they omit you in the apportioning of the commission. If you are lucky, all the parties may decide to give you is a token fee.
Working online means receiving emails, often with attachments. Virus-infested mails abound these days. You must therefore protect your computer and the valuable data stored on it with the latest anti-virus programmes. Many are available, like Norton, McAfee, etc. Buy the one which will automatically remind you constantly to update the program online and free of charge. This will allow you to avoid the attack of new viruses. An outdated virus scan program cannot detect them.
You are serious about your brokerage business and you want to take it far. Your dream is legitimate and achievable. So take these steps so that neither man (or woman) nor virus can disturb it.
My name is Akoli Penoukou. I was born in Lome-Togo (West Africa) in 1953. I went to school in Ghana (West Africa) up to the high school diploma level. I taught French there for one year and then returned to Lome to work. From there I went on "adventures" in Nigeria (West Africa) and Germany. Back home in 1983 I began my business career. This began with a West German import and export company which represented major German manufacturers like Henkel cosmetics in West Africa. I started as Executive Secretary and ended up five years later as Manager. Then I founded my own company in 1987 which I ran part-time. The activities of the firm having increased dramatically in three years, I diversified into imports and exports. The brokerage business and trade representation constitute the main thrust of my buinsess now. I have trained as a freelance writer for children and adults and have published in newspapers and magazines such as "Aim" and "Clubhouse" in America. Hobbies:writing, reading, gardening, languages, music, traveling, and teaching. I am married and have 3 children.
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My previous article I wrote called "One Point Two Billion" attracted quite some attention, the downloads through all the article syndication services has been astronomical compared to any other articles I wrote which are still with them. It seems the numbers game is popular not only with the accountancy profession, but with just about anyone running a website who is interested in more sales from anywhere in the world. The internet has proved to be the great leveller, even a grandmother I know has made hundreds of thousands of dollars just from publishing a couple of e-books, business of that magnitude is not now confined to those people with large sums of investment capital, teams of accountants, planners, secretaries, swanky offices etc. Anyone, even you, can make money regularly on the internet, just aim for a goal and 'go for it!' The costs of setting up have never been lower, the ease of making web pages has never been easier, ( I make my web pages in Notepad, which is on every Windows computer), and the potential audience for your web pages has never been larger. So what are you waiting for? The sheer mountain of information available through e-books on any subject and especially on setting up a business on the internet would take you a lifetime to read through, so just be selective and read only what you need to know about and get started in that business. Businesspeople who have 'been there-done that', have written up an enormous amount of e-books to pass on their knowledge and experience, pitfalls to avoid, how to spend your advertising dollars, and just about everything else you need to know about to ensure success. So profit from their experience, avoid the pitfalls, do what they say you should do, and you should be in a profitable business in no time, just the way they did it. No large sums of investment are needed, just time and dedication. If you provide an excellent service that benefits all your clients, they will recommend you to their friends,if on the other hand you want to be a 'scammer' and a 'fly by night' operator determined to 'rip-off' as many people as possible, you will come to grief. You will find your web hosting account rapidly terminated, your e-mail account likewise, and your name plastered all over the forums and newsgroups. You get out of life exactly what you put in. There are still mysteries about life we still don't understand and this is the reason we come to grief, but on the other hand, if you work for the benefit of others, this 'mystery of life', for want of a better name,cuts in and helps us along, we go with the flow and good things start to happen. I could tell you of many experiences I have had, both good and bad, which I have learnt a great deal from, but space precludes that, maybe one day. All right, you win, I will tell you of one particular incident more recently and then move on with this article. I carried a St.Christopher medallion on a gold chain in my wallet for six years, given to me by the wife of a good friend overseas, 'it will keep you safe' she said. I received a new wallet for a Christmas present and changed everything in the old wallet into the new one, except the St. Christopher medallion, it was looking a bit 'worse for wear' and I decided to put it in the cupboard. That day I lost my mobile phone! For two whole days I felt a loss which can only be described as a 'bereavement'. I had lost touch with the network I was attached to night and day, seven days a week, I felt bereft. I did not know if someone was trying to ring me, whether something was urgent I had to know about, my sense of loss was total. Was this to do with the St. Christopher medallion? I thought surely not. That was on the Tuesday, by Thursday morning I had decided to put that 'good luck' St. Christopher medallion into my new wallet. My mobile phone turned up via a 'good samaritan' who would take no money as a reward whatsoever.I was never more pleased to see my mobile phone. So what happened here?Was it something to do with the St. Christopher medallion? Was it because I had 'bad thoughts' that it was the 'worse for wear'so discard it as inconsequential? I don't know the answer. There have been too many such incidents in my life it would take volumes to relate the details. We don't know these 'mysteries of life' but one thing is important -keep a positive outlook to everything and everyone and good things will happen for you. It's difficult to visualize how many people that are out there who can log on to your website. It's also difficult to understand what kinds of people they are, what background and education they have had. Why they are logging on to your new site. What do they expect to see, or learn, or buy? How will they benefit from visiting your site?. Will they buy a good product, or learn something, or get some amusement or entertainment from it?.
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Publishing has always been a difficult business to promote successfully, which titles by which authors to promote, which genre, will it be fiction or non-fiction? Will they sell? Will they make money, both for the publisher and for the author? So many questions which there is no definitive answer and so the publisher takes a chance with his money and his time and resources and decides on which books to publish, promote and distribute to the bookshops. He may only distribute to bookshops in his own country and if they don't sell well enough, will not be seen by anyone else in the world.
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