The Wholesale Forums

[beeker]

Hello everyone. I have been browsing the forums for awhile now, and I've noticed members like ara-uk who are offering take all deals for a large number of product. One offer I noticed in particular was from ara-uk for 8,500 xbox 360s, where he took a $1 commission for each unit. Now I am assuming, and please correct me if I am wrong, that ara-uk was brokering this deal between one of his suppliers and an end buyer. I see a lot more money being made in brokering rather than resale, and was wondering if anyone could answer a few questions about the whole thing.

What exactly is brokering?

What is an FPA and how does it work?

What paper work must be completed to begin/finish a deal?

Could anyone give an example on how a normal deal will happen?

Any information is greatly appreciated! Thank you!

[BillyA]

Brokering - introducing a buyer and a seller. You get a commission.

FPA - fee protection agreement. Document stating you must get your commission for the introduction.

Necessary documents:
FPA and NCND (Non-disclosure and Non-circumvention document) - one protects your commission, the other says that the buyer and seller cannot go around you to do a deal.

Beware, many of these deals do NOT happen. You will see a lot of these brokered deals offered, but only a tiny amount completed. Most of the time these deals involve ghost stock (or stock that simply does not exist). Scammers utilize brokers to unwittingly do their bidding for them.

Check out the threads on BRV Suppliers and Outlet Distributors - classic cases of brokered deals gone very very wrong.

[canada]

Non-disclosure non-circumvention agreement example

NCND

Agreement

Whereas, each signatory Party possesses certain information, not known by any other Party.

Whereas, the parties are initially desirous or conducting various business transactions in contact with any third Party introduced by other Party to this agreement, except for the mutual benefit of all Parties and

The undersigned Parties agree, in the consideration of the foregoing promises to abide by the following terms and conditions:

1. Non-Circumvention: Each Party agrees not to directly or indirectly contact, deal with transact, or otherwise be involved with any corporation, partnership, proprietorships, trust, individuals, or other entities introduced by either Party without the specific written permission of the introducing Party.

2. Each Party agrees not to directly or indirectly circumvent, avoid or bypass each other regarding any renewals, corporation, partnerships, proprietorships, trusts, or other entities introduced by either Party.

3. Non- Disclosure: Each Party agrees not to disclose or otherwise reveal to any third Party the identities, addresses, telephone numbers, facsimile numbers,

E-mail addresses, telex numbers, bank codes, account numbers, financial reference, or any other entities introduced by either Party to the other without the specific written permission of the introducing Party.

4. Terms: This Agreement is valid for the following term: Five (5) years from the date of signing of this agreement.

5. Parties bound: This Agreement shall be binding upon all undersigned Parties and their heirs, successors, associates, affiliates and assigns. Each Party shall take reasonable steps to ensure that their Employees, Agents Representatives, Officers, Independent Contractors, Shareholders, Principals and other third Parties abide by the provisions of this Agreement.

6. Notice: All notices, demands, consists, or requests given by the Parties shall be in writing transmitted by telecopier or other means of facsimile transmission with return confirmation requested, postage prepaid, to the other Party at the last facsimile number or address the Party has designated by notice here in. Notice shall be considered to have been given.

7. Language: The language in all the Agreement shall be in all cases constructed simply according to its fair meaning and not strictly for or against of the Parties and it is agreed that the English language is used.

8. Severability: Should any portion of this Agreement be declared invalid or unenforceable, then such portion shall be deemed to be severable from this Agreement and shall not effect the remainder hereof.

9. Integration: This Agreement constitutes the entire Non Circumvention Agreement between the Parties and supersedes all prior discussion, negotiations and Agreements, whether oral or written. The parties further intend that this Agreement constitutes the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial or arbitration proceeding involving this Agreement

10. Amendments: Any change or amendment to this Agreement, including oral modification supported by new consideration, must be reduced to writing and signed by all Parties before it will be effective.

11. Waiver: No waiver or default of any of this agreement by any party shall be implied from any omission of such party to take action against the defaulting party. One or more waivers of any covenant, terms or condition of this agreement by any party shall not be considered to be waiver of render unnecessary consent or approval of said party of any subsequent or similar acts or omission.

12. Arbitration: Any controversy or claim arising out of this agreement which is not settled between the parties themselves, shall be settled by arbitration in accordance with the international chamber of commerce (ICC) rules and arbitration is the nearest regional or ICC non-circumvention and non-disclosure laws and binding for all undersigned parties and their associates, affiliated, employees, agents holders, principals, heirs, successors, assigns and other third parties.

13. Attorney's Fees: If any party files any action or brings any proceeding against other arising from this agreement, or is made a party to any action or proceeding arising from this agreement, the prevailing party shall be entitled to recover as an element of their cost to suit and not as damages reasonable attorney's fees to be fixed by the court, arbitrator or adjudicative authority. The prevailing party shall be the party entitled to recover their cost to suit or arbitration, whether or not entitled to recover costs.

Relationship: The Parties hereto shall not be deemed to be Partners or Joint Ventures and no Party shall be liable for any other Party's commitments or liabilities resulting from execution of this Agreement. Force and defect of Document: The Parties here to agree that a signed telefax or other facsmile copy of this Agreement shall have the same force and effect and as the original of this document.

15. Force and Effect of Documents: The Parties hereto agree that a signed telefax or other facsimile copy of this Agreement shall have force and effect as the original of this document.

IN WITNESS WHEREOF, the Parties hereto execute this Agreement by their auhorized document.

ENTITY/PERSON :

Signature

Date :

ENTITY/PERSON :

Signature ……………………………………………….

Date : ……………………………

ENTITY/PERSON :

Signature ……………………………………………….

Date : …………………………

[canada]

Irrevocable Master Fee Protection Agreement Example

Contract No.

Seller’s Name:
Address:
Phone Number:
Fax Number:
Signatory:
Title:
Commodity:
Quantity:
Duration:
Delivery:
Price Basis:
Contract Value:

1) This Fee Protection Agreement (FPA) is issued to the Paymaster involved in the sale of the Commodity identified by the above Contract Number. Commission payments will be made after the delivery and payment for each shipment , as agreed between the Seller and the beneficiary Paymasters. The commission will be paid to the beneficiary Paymaster named in the F.P.A. for all contracted quantity including all extensions and rollovers on shipment by shipment basis as per the following proceeds.

1.1 The entitlements herein specified will be transferred in full compliance with articles 48 and 49 of ICC N0. 500, as amended, in favor of the paymaster herein been named.
1.2 Payable automatically, upon payment for each and every shipment, by swift wire transfer.
1.3 The payments will be made without protest, delay, or deductions (other than normal Bank wire transfer fees).
1.4 The entitlement under this F.P.A.covers the entire transaction identified and defined herein including all extensions and rollovers.

2) I, the undersigned , with full corporate authority and legal responsibility, under penalty of perjury, on behalf of the Seller, do hereby irrevocably and conditionally undertake to pay the commission specified in this F.P.A. in United States Dollars , in favor of the beneficiary Paymaster named herein.

A commission of $______ Per MT will be paid to the Paymaster , The said commission becomes payable if the referenced transaction has successfully been concluded and the payment of the commodity has been made by the Buyer in favor of the undersigned in respect of each and every shipment that has been delivered.

The responsibility of the undersigned payer is limited to the transfer of the entitlement to the beneficiary paymaster whenever the commodity delivered has been paid by the Buyer and to the observances of the practices of the NCND.

3) Seller’s Banking Information:
Bank Name:
Address:
City:
Country:
Account Name:
Account Number:
Swift Code:
Telephone:
Fax Number:

4) Beneficiary’s Banking Information:
Commission:
Company Name:
Telephone:
Fax Number:
Beneficiary:
Bank Name:
Bank Address:

Agency Number:
Account Number:
Bank Officer:
Swift Code:
Bank Phone Number
Bank Fax Number:

The Parties agree that FAX/EDT signed and sealed copies of this Fee Protection Agreement will be in full force and effect.

Signatory Seller:
Signatory Paymaster:

[beeker]

Thank you guys for all of the information. I found a supplier who is willing to broker with me, the only problem is finding a buyer. Where would be the best place to post offers? I know this forum is a great place to do that, but would sites such as exporters.com.sg and tradekey.com be good? Do all of the parties involved have to sign the NCND? Do they have to sign it in person, or is it able to be faxed?

Canada, would I be able to use the FPA and NCND examples you gave me, paste them into word and print them out? If not, do you know where I could get those documents?

Thank you guys again, this has been extremely helpful!

[Titchimp]

Originally Posted by beeker

Thank you guys for all of the information. I found a supplier who is willing to broker with me

Make sure you are 110% sure about your supplier before you put any of other peoples money their way

[BaiLong11]

I gotta second Titchimp on this one. The last thing we need are more brokers unwittingly selling ghost products... but I wish you the best!

[canada]

Originally Posted by beeker

Thank you guys for all of the information. I found a supplier who is willing to broker with me, the only problem is finding a buyer. Where would be the best place to post offers? I know this forum is a great place to do that, but would sites such as exporters.com.sg and tradekey.com be good? Do all of the parties involved have to sign the NCND? Do they have to sign it in person, or is it able to be faxed?

Canada, would I be able to use the FPA and NCND examples you gave me, paste them into word and print them out? If not, do you know where I could get those documents?

Thank you guys again, this has been extremely helpful!

You can use the FPA and NCND examples,no problem.

Scott

[beeker]

Thanks again to everyone for the input.

Titchimp and BaiLong, I have heard some of the horror stories about brokers who collected tens of thousands of dollars from customers, only to have their suppliers fall through. That is one of the things I am most worried about. I have one supplier right now that I'm going through, and he is someone that I have dealt with in person before, but there is always something unexpected that can happen and ruin everything.

Canada, thank you, I'll hopefully be using those examples you gave me

As of right now, I posted some leads on exporters.com.sg for iPods and mobile phones, I'll keep you guys updated if I get any customers. I'm extremely glad that this forum is here with such a knowledgeable and experienced community; this is a HUGE resource for me. Thank you guys!

If anyone has any more information, advice, etc, PLEASE don't be afraid to post it. I'd love to learn as much as I can about this subject. Also, if there are any suppliers who would be interested in me brokering products for them, please send me a PM.

Best Regards,
Conner Hewitt

[BillyA]

Conner,

What type of payment methods does your supplier offer?