EXAMPLE PAGE FYBR V "TI"

Page I57 FYBR V -TI

Replying to the End Buyer
It’s time to get serious with genuine documents and examples of correct trading applications. The way you commence a deal is the way the deal will continue. Let’s apply to advise potential buyer(s) of goods you have secured, in this case “PIA” is going to attempt to secure an Ethanol buyer.


(Header Info)
Date:
Transaction code:
From Seller: PIA
RE: Product offer- Automotive Ethanol

Dear Sir or Madam,
PIA is currently selling Automotive Ethanol. Should your firm have any interest in purchasing such a commodity, please do not hesitate to ask us for a FOB quote or offer accordingly. Please specify Delivery, Grade, Quantity and final port of destination. PIA uses only safe trading applications and rules as defined under Incoterms 2000 and UCP600 Banking rules as a minimum safe trading application.

Kind Regards
PIA Import Export

The Intermediary now elaborates further on the above simple premise only to start with- within six months the intermediary should be able to write excellent letters of inquiry always in support of the above underlying simple premise -

If the Intermediary receives a request from an outsider I.e: “May we please have a quote for Ethanol” type of e-mail - then the intermediary asks the inquirer to fill in a “RFQ” (Request for a Quote Form) - But when the intermediary is actually approaching end buyer directly or indirectly via other intermediaries , the the above type of letter will do . One way or another the Intermediary SHOULD not provide the details of specification/grade or any other information, because the intermediary NEEDS to conduct DUE Diligence on the information it receives to establish if the inquiry is real or a fake.(Use offered website reference advice given later) What’s the point of giving all such details to an inquirer? The Inquirer MUST know what specification he requires for the goods being asked for thus if such are advised incorrectly , the inquiry is simply trashed is a typical example on how an intermediary can determine the difference between a real deal and one that is false.

“I Have an end buyer could you please provide an offer form ethanol”

No you cant. If the end buyer is real then the intermediary would have the details of his buyers order; accordingly the intermediary should be able to provide matters of the specification of the goods being sought and other vital information as to port unloading, shipment sizes and the likes. The answer to the above inquiry then applies- “Sure we can provide you with an offer for ethanol , please fill in the details of the RFQ form advised. Thank you”. The Intermediary selling offering goods for d sale MUST have the details of his own VERIFIED supplier in hand, thus the Intermediary seller knows what the specification/grade of the Ethanol is -

The above letter defines the matter at hand clearly. It's straight forward, and uncomplicated. It's not an offer or a quote, just an invitation to others who may be interested to buy goods you have secured. PIA is unsure if the person being contacted is a real End Buyer or not, thus you are not providing a great deal of information about the product being implied, because a good trader would wait and see the kind of response being advised. A good reply will define a great deal about a real End Buyer or end user of Ethanol. Such information will immediately indicate to PIA if a potential deal prevails outright or if the information it received is simply treated “RF”.(Rubbish Fodder)

Even corporate giants who know very little about Ethanol, may attempt to buy such goods from PIA hoping to “Flip” the contract over quickly, defining that PIA would not be selling to an End Buyer but another Seller/Buyer, a situation that must be avoided at all times, as PIA can only sell to an End Buyer taking possession of such goods and nobody else is the assumed position outright. So don’t give too much information when securing an End Buyer, use an informal approach, and wait for them to give you information accordingly.

A real Ethanol buyer knows what they want, hence would reply with a request in where further due diligence could be applied on such a request to test the buyers veracity.

Once a deal begins to prove viable then PIA should concentrate on such until failure or success is recorded. Each enquiry, quote or offer made by PIA to each End Buyer or Intermediary chain, carries with it a separate transaction code, as created by PIA that cannot be changed once implied. This enables PIA to track the offers, as it pertains to each string contract until viability of a potential deal begins to eventuate.

E-mail is the main communication device used, which is allowed to apply with all inquires, quotes and offers. Other means such a facsimile may also be used, but don't underestimate the power of hardcopy mail out, which is still believed to be the superior application, albeit slow. Experience implies mailed letters sent directly to a named CEO of a company would get closer to the attention of a principal, than a facsimile or e-mail by virtue of its application. This is certainly true in the sending of such to either the End Buyer or even a Supplier, and even more assured if the same language of such is used in translation however rudimentarily implied.

So you have a close association with others who you can trust in where you are heading the team as Buyer/Seller- One who can write Chinese ? Then advise that person to write a translated copy of YOUR letter to TO YOUR End Buyer that you have found, on YOUR behalf. A Send both the chinese and English copy to the potential end buyer . Ask the translator to interpret such matters on your behalf if indeed a reply is forthcoming. If you have your own team of trusted intermediaries in where you are heading and are closing and the deal as well as securing commission for everyone who assists you , then that’s how a good team operates-



Page 361: FYBR TI

When “John” the Shipper/Supplier sells goods to “Harry”, John’s title to the goods must to be transferred to Harry. Harry is selling the same goods to Mary endorses the BOL to Mary. Mary signs and accepts the BOL without endorsing it further to anyone else, to which the BOL is said to be “Blank Endorsed”. Thus the term endorsed has a different application to the term “Blank Endorsed”.

The Carrier will deliver the goods to the person holding the “Blank Endorsed” BOL.
This has to happen to satisfy the terms and conditions in meeting with the issuing bank delivery documents and “presentation” requirements but the handing over of the actual goods is still dependent on the Carrier first being paid for freight, because Maritime Shipping laws define that the carrier has not earned such freight until goods have been physically delivered to the buyer’s destination port. Thus in effect a lien is held over the goods in the possession of the Carrier until such freight is paid.


Page 615: FYBR V - COFI

<sup>Commissions: Crude Oil/Fuels: Buyers side USD$5.00 dollars per Bbl, Sellers side $5.00 dollars per Bbl- Really! Don’t be silly!- and what is the End buyer taking possession of goods going to get? Banana’s!

From what planet are you from! Do you really think that an end buyer will accept an offer in where all the misguided intermediaries enacting on a deal have cleaned up on the $10 dollars per Bbl discount by grabbing at such to imply some kind of commission regime payment. Your commission comes from the End buyer funds and nowhere else- The Commission that the whole intermediary string deal on the buyers side and the sellers side -comes from the end buyers funds. Have you got that! Everyone’s commission, who are involved in the selling of goods from a supplier, obtains such commission payment from the end buyers funds-

EVERYONE!

Thus look a how confused many intermediaries are- Sometimes we get a deal here perhaps 2 or 3 intermediaries on the “Sellers” side have given to FTN exporting an offer in where such a side has already allocated for themselves selves most or part of the commission, thinking that their “Seller” is going to look after such, without understanding that the intermediaries on the End buyers side working with FTN exporting are the safest group in the whole string deal. As already stated FTN will not transfer a DLC to another reseller unless they step back. If such does step back, then FTN exporting direct payment is to the supplier and protects ONLY the sellers (Remember ? FTN is both the buyer and seller) ) commission as a lump sum, who is supposes to ensure that his intermediaries get paid-(All intermediaries on both sides get paid)

In effect as per our example Re; 10 dollars commission- that’s not going to happen and circumvention is assured. FTN often asks all such intermediaries to “Step back” in return for commission protection, but what often happens is that the “Seller next to a Supplier ” will not “step back” or will step back for a large slice of the commission,(a part of which was supposed to go to his “protected” intermediaries) resulting in the deal collapsing- as FTN Exporting will not entertain nor tolerate such bad intent. YOU as a Buyer/seller have to build a relation ship with the people you work with, if you do that others will begin to trust you and open up to you with potential deals for you to look at, without wasting time on ambiguous pay order and NCND agreements. Being a tough shrewd business person is one thing, being an honourable business person, that's’ something else- You are not just protecting the deal for yourself, but for who have placed their trust in you- I’ve read the works of Machiavelli “The Principe” of which one moral code of conduct could be applied in greater application than the “Machiavellian” way of doing business- “Integrity” will always win over doing business “at any cost”</sup>


Page 633: FYBR V- COFI

<sup>Margins such as applying a buy price against one benchmark without a discount being offered in where you sell such crude oil at another benchmark in where a discount is formed - ie; Nymex versus Brent's at times can differ by as much as 3 dollars per Bbl- PDVSA FOB against Dubai at FAS could also imply an even higher margins- Russian Ural’s 32 API grade against West Texas Intermediate 34 API grade could produce a huge differential. A few dollars differing between FOB and FAS sales could earn the intermediary a commission it it’s own right. FOB versus CIF could apply the potential of extra commission earnings- Very Low API grade and high Sulphur many seen an attractive deal compared to the opposite in where a few dollars more could be made could be made apparent as commissions.

Dollars or a few cents more? In crude oil 1 million bbls with 20 cents commission per bbl equates to $200,000 dollars in commissions that could be reasonably made apparent on any deal. Trying to earn $20.00 per bbl commission is best said to be a useless approach.

7 people in the total trading string deal in where 80 cents per bbl is available in where the buyer /seller keeps 20 cents per bbl for himself and protects 10 cents per barrel to it intermediaries is indeed a promising application.

Lets return to our deal-
Are you saying that the buyer gets no indirect discount pays USD$130.00 dollars per Bbl on crude oil, then forks out another lets say 20/30 dollar per MT in CIF costs? and a further $15 dollars plus in added transport and processing costs- So if the bench mark is $130 dollars at DME, and the Saudi’s FOB Physical sell futures prices is $100 dollar per BBL at FOB, then YOUR poor buyer is expected pay $150 dollars per Bbl for crude oil that everyone else has purchased , landed at around USD$120/30 per Bbl- give or take-? Are you serious? Do you think an end Buyer is so stupid as not to know what he needs to pay for crude oil to meet gross operational and personal profits margins- The said gains are not immediately apparent. The true gains won’t become apparent until the goods arrive at destination port- by which time there could be a huge difference in purchase price when compared to a current rising price application- (As demonstrated perviously)</sup>

^{COMMISSION PAY ORDERS - SLC AND IPG}

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