Crude Oil Business – Why Most Facilitators Never Make It
There is no doubt crude oil business is a very lucrative business, you don’t have to be rich to facilitate a deal. All you need is a genuine buyer and a genuine seller. It has become very difficult for buyers to meet genuine sellers and vice versa, this is due to the fact that there are many fraud perpetrators out there trying to leverage on the information they have to brisk money out of innocent buyers. This has increased the doubt of genuine buyers of Nigerian crude, it has forced them to think of every Nigerian who tries to facilitate a deal as a potential fraudster. When these foreign prospects try to negotiate a deal, they become stiff in their bargains and would rather want the seller to work with their own procedures. The issue of the seller putting forward a 2% performance bond first comes into play, the buyer would have the seller raise a bond first and the seller on the other hand would rather want the buyer to raise a proof of fund in the form of MT 799, Letter of Credit, Bank Guarantee, MT 103.
The facilitator plays a major role in negotiating a crude oil deal in the sense that he serves as the middle man. It is not easy being a facilitator, you need to have a convincing power, you have to be clear in your understanding of the business, and you should be able to give the seller mandate every bit of information needed whether via telephone or email. The reasons why most facilitators do not make it and get frustrated is not far fetched.
Long Chains: This is always a problem which limits most facilitators, when there are too many people standing as facilitators before the mandate, it posses a whole lot of problem in the sense that distribution of information is slow. A buyer might need a product and require information, but because the facilitator has to go through many hands before getting the information, it makes the buyer loose trust.
Commission splitting becomes a big problem as most of these facilitators are frustrated and motivated by greed, the issue of which group takes how much sets into play and they come to no reasonable conclusion leading to waste of time and resources. Some buyers do not like the issue of presenting an SPA with too many account details on it, they prefer only one paymaster; hence no deal because there are many groups involved in it and they all have different account details. The greed of facilitators make this business arduous, sometimes a facilitator might claim to be working with some other group of facilitators that do not exist. The account details which is supposedly meant for the other group they claim belongs to them or some colleagues of theirs, this makes it tiring.
Another point to note is this, before you proceed on any deal; ask your contact what he stands as (Facilitator or Mandate). If he is a mandate, then you can be his facilitator. If he is a facilitator, you make him understand your stand as well. You come to an agreement if he stands as seller’s facilitator or buyer’s facilitator. Most times the seller’s side is always closed and most facilitators might want to attach themselves as a buyer’s facilitator meanwhile their contact also stands as the buyer’s facilitator. A reasonable agreement should be made as per splitting the 50 cents which is usually due to facilitators. If you do not do this then you might end up wasting your time.
Insufficient knowledge of product: How can you market a product you know nothing about? It is not logical to do that. When a facilitator gets in contact with a buyer, the buyer might want to place a phone call. The reason for doing this is not far from understanding. He wants to ascertain if you are knowledgeable of the business or product you intend to market. He wants to feel your pulse through the phone; he wants to know if you sound sure. Once you can convince the buyer on your first communication via telephone, then you have gotten him to trust you. If you prove otherwise, then you have lost it, so when next you want to facilitate a deal make sure you are knowledgeable. Remember that building trust and credibility matters a whole lot.
Procedures: This is another major problem that makes it difficult to broker a deal. The buyer in most cases might want to work with his procedure and seller might not be comfortable with it. The issue of Proof of Product and Proof of fund comes to play here. Buyer wants to see POP, Q88, and CPA first and seller wants him to sign SPA first. So many deliberations here and there, at the end nothing comes out of it. It is logical that the seller gives what he has; it is either the buyer works with it or walks away. Logically, if you go to a gift store and they don’t accept cash, the buyer has to play buy the rules of purchasing with a credit card. If the buyer does not like it, he can try next store. It is as simple as that.
Source by Ikenna Victor Agina