The Wholesale Forums

[BillyA]

Although a lot of brokers get a bad name on this and other forums, brokering is in fact a legitimate business activity.

A broker is defined as a business entity or agent that can procure a product for his client in exchange for a markup or commission.

The main problem we have seen in the recent past with brokers stems from laziness and greed. Those of us who have been around for while cannot tell you how many times we have seen brokers fail because they did not check out the supplier thoroughly enough, do not know accurate pricing to determine if the supplier is legitimate, or simply fail to do their homework. I call this laziness. If you intend to broker - do your homework. Understand the machinations of the market you will deal in. Know pricing. Understand the various payment methods. Research and test your supplier before you go into business with them.

If a broker fails to do their homework, it's laziness - but it can also be reckless as well as underhanded. You may have no intention, as a broker, to scam anyone. However, if you use your clients money in a reckless way (ie. wire transfer money to an unknown supplier), you are not looking out for the best interest of your client. You are more interested in lining your pockets. That, my friends, is underhanded. As a matter of fact, you should consider you clients' money dearer than your own.

So here are some simple rules to brokering:

1. Research your supplier.

2. Do more research on your supplier.

3. Test your supplier

4. Test your supplier again.

5. Insist on safe payment method (CC, L/C, Escrow.com)

6. If, after researching and testing, your supplier does not accept CC or Escrow.com, only broker what you can afford to buy yourself. (ie. If you only have 5K to work with, do not accept orders for 20K., hoping everything will be okay. This very forum is filled with people that wish they had never hoped.) Build your capital and your reputation first before taking on larger deals.

7. Should a deal go bad, be prepared to lose money. It happens.

8. You should not expect your clients to share in your loss. They do not share in your gain, do they? Be prepared to reimburse escrow fees, credit card fees, and wire transfer fees.

9. Communicate with your customers regularly in good times as well as bad.

10. Be upfront and honest about everything.

If you are considering brokering, following these rules will keep you out of trouble and possibly jail.

[ara-uk]

Great article Dave.

[cpc]

GOOD STUFF! That's the only way to go....

[Saajan]

Hi David,
Very good article. Its well structured and it has some very good points about brokering.

Well done m8

[iBuy]

Lol, im a little late on this one,

Brill article though, if only Matthew Newbury had followed these rules, hehe.

[wragge11]

Very late mate,

But it is definately a good post!

[andy]

brilliant article, I have been brokering for a while now and I cant imagine dealing with suppliers and not being 110% they are decent, its a lot of responsibility buying on someones behalf.

I think comunication is the key.

[mi3nboi]

Great post, this forum is great.

[Mac1205]

I'm late to read this too , but seems like a very informative post. Thanks!

[Businessinchina]

Good point. We're just taking your advice in China...