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.

---

Selling From Your Website

Greetings!Friends and relitives ask us all the time " How... Read More

Web advertising e-Marketing Places!

Overview:What is web advertising?Internet Advertising is popularly known as web... Read More

Set Yourself Apart From The Ordinary

I have written at length about the need to anticipate... Read More

Is ECommerce Right for Our Business?

If your business features products or services for sale, undoubtedly... Read More

How to Receive Payments for Your Online Sales

Once you decide which products you are planning to sell... Read More

Effective Management Of Your Customer Services

With a third party merchant account you will have a... Read More

The Top 10 E-Commerce Ways to Follow up with Clients - Part 1

Did you know that 80% of all sales are made... Read More

Google Catalogs - Old Gashioned Mail Order Meets High Tech Search

In addition to Google's Froogle shopping service (still in beta),... Read More

Prompt Delivery Rules ? Internet Product Sales

The Internet is the fastest growing source of mail order... Read More

The Clickbank Crash of 2003: Lessons Learned

I had a rude awakening recently. I checked the days... Read More

Electronic Commerce and WTO

The Internet may not be useful for all businesses, nor... Read More

How To Implement E-Business Solutions Successfully

Pitfalls of E-business solutions installation processA large distribution company has... Read More

A Tale of Two Revolutions - Ecommerce: A Historical Perspective

The World As It Then WasThe dynamic economic growth of... Read More

Content Ever be Profitable?

THE CURRENT WORRIES1. Content SuppliersThe Ethos of Free ContentContent Suppliers... Read More

The Essential Christmas Web-store Makeover

Ten great tips to turn online holiday shoppers into eager... Read More

Intranet Portals ? Collaboration through Team Rooms

Knowledge Management for beginnersKnowledge Management (KM) can be defined simply... Read More

Shopping from Your Cell Phone with Froogle Wireless

Many surfers already know about Froogle, Google's shopping portal that... Read More

How To Sell Websites Fast !

This article will explain in depth the steps needed to... Read More

How E-commerce Web Site Design Differs From Normal Web Design

When it comes to e-commerce everything is a little bit... Read More

Starting An E-Commerce Business

The development and expansion of the Internet has made business... Read More

Online Shopping: Legal Challenges for Taxing Authorities

E-commerce offers customers the chance to eliminate many stages in... Read More

Online Payments Make It Easy For Your Customers To Buy

In the last column we discussed the process of credit... Read More

How Do You Make Money Online?

If you learn how other people make money online, I... Read More

Saving Money On Your E-commerce Site

After building and transferring many e-commerce sites it still amazes... Read More

Grow your Business with Emarketplace - Part III

Increase Company ProductivityAfter years of hard work, finally your business... Read More

Shopping Online: What You Should Know

For some people, shopping online is as normal as driving... Read More

The Lowdown On ECommerce: Making All The Pieces Fit Together

The Lowdown on EcommerceEcommerce is truly the most confusing aspect... Read More

Why Arent People Buying From Your Ecommerce Website?

Your stock is tempting, your prices right - your ecommerce... Read More

Your Affiliate Web Site Is Built ? Now What?

When I first got my web site built, I thought... Read More

Chinas Online Shopping May Be Booming In The Next Few Years

Data from China Internet Network Information Center (CNNIC) shows that... Read More

Shopping Cart Usability

Usable Shopping Carts Increase SalesE-commerce has been around since 1993... Read More

The Plain Man?s Guide to Making Money Online

I'm a plain man who uses plain thinking in devising... Read More

10 Compelling Benefits of Having A 3rd Party Merchant Account

If you have been wrestling with the idea of applying... Read More