International Trade Brokers
International Trade Brokers are the really big guys (and women!) in the global trade industry. They are the people who makes the really big deals, who sign the multi-million dollar contracts between two companies in different countries.
In the modern era women are also busy stepping up to take their well-earned place on this podium. Trade Brokers are the people who are under the top 5% of income earners in the world. They earn millions every year.
Best of all, you can get into this industry without having a degree. Don’t be fooled by advertisements stating this as a pre-requisite. Of course every company wants the best qualified person for the job, but the most important qualities you need are excellent people’s skills and a very good general knowledge of several different topics and countries. Convince the company looking for an international sales representative of that, and you got yourself a stunning dream job. Of course, experience in sales will be a pre-requisite, since a successful salesperson have most of what it takes to spread his wings across borders.
Before we go any further, note that there is a slight difference between being an international sales representative and being an international trade broker. On some points the two overlaps, thus only a few companies distinguish between them.
As a rule international sales representatives specialize in one industry or product, and part of their work is to travel to several different countries around the world to find and meet up with potential buyers for that product line for just one company. To be able to offer the best deal to buyers they are employed by the manufacturer of the product or producer of the raw materials. Their buyers range from wholesale companies to other types of distributors to corporate clients who are looking for sophisticated and expensive machinery for example. You will often find that these sales people have really fancy titles, like ‘International Sales Executive’ or ‘Global Sales Manager’.
There's a clear difference between a broker and a sales representative
An International Trade Broker is a notch higher on the food chain.
His job is to broker deals between two different companies in different countries, one being the direct manufacturer and the other the buyer that expressed the need for such product.
Where a sales representative represents just one company (except when freelancing) and have to find buyers, a trade broker can also identify a buyer and its needs first, then starts out to find a solution in a form of the right supplier with the right product.
By reading this some potential company owners’ nostrils might start flaring, fumes around the mouth appears, etc. They know very well that these ‘middlemen’ as they are often referred to make a bucket load of money every year. Since they have to get a product or raw material as cheap as possible, cutting out the middlemen is the logical step to take. Using the Internet to find suppliers is – supposedly – making that easier, is what most decision makers like to believe.
Importing a small trial order after finding a potential supplier themselves via the Internet are often tried the first time by companies themselves, and with the second – bigger – order and shipment the cake falls onto the ground. The ship doesn’t sink, the plane doesn’t crash, but exactly a million other things are waiting to go wrong too often.
There are numerous and real horror stories about a company importing some goods themselves the first time and everything goes well from product quality to delivery time to price, but with the second and bigger order the ‘supplier’ disappears with the money, or the goods that arrive are of much more inferior quality than the merchandise in the first shipment was, or guarantees aren’t met, etc. And trying to get that money back is virtually impossible and more time consuming than it initially took to learn the ropes to do some imports yourself. The legal loopholes when dealing with the laws of two different countries can get a ship not to leave port at all.
It is like going to the doctor and be told you have a small brain tumour. Since you want to save money and the G.P said it is still small, you order him to remove it himself. Will you be that stupid, (okay doctor, remove that greedy brain!) or rather fork out extra money – and save yourself later from restorative operations - and get the job done by somebody that focus only on that field?
Clever companies – thus large companies, or small but ambitious companies planning to get large – focus on performing their core business well and leave the specialist work for the specialist.
Using an International Trade Broker have a second and decisive advantage for companies who want to import products for resale or for own use when they are thinking long term.
It is difficult to estimate how many factories there are around the world, but it must be millions when taking the small ones that doesn’t export yet into account as well.
By putting out a lead on the Internet that you are looking for something specific you surely will get flooded by proposals from average-size to large manufacturers and fly-by nights around the world, and be spammed with offers for not-related products. It won’t just take days, but weeks to go over all of these proposals and select the right one. Hundreds of calls will be made and hundreds of emails will be exchanged if you want to do a proper job, and all of it needs to be filed and kept record of. But from the small 10 or 50-man factory with an ambitious owner that want to grow and thus producing a quality product you won’t know, and he neither from you.
It is the broker’s task to find you the exact and right supplier to do the above, and eventually to physically go out and visit the ones that ends up on the shortlist. It’s his task to find that small factory and consider them too, with your specific requirements foremost in his mind. It is his task to build a long-term relationship between you and your new supplier that will last for years.
An important aspect that a sales representative first must consider - probably the most of them all - is to identify if a need for his product exists in a certain country.
If you represent a Canadian diamond mine, you will have real trouble finding buyers in Botswana for it. Not only is their population too small, but far worse is that since they are already the biggest producer of it worldwide you will be laughed at.
After you determined that your product will have a market in a certain country (that means the need for it exists), look at what similar products to yours are already there, or worse, established there.
People like brand names and build a loyalty towards it, so are you sure you can grab some of the market share? Even if your price is better that doesn’t mean your product will make an impact, except when it have a really significant cheaper price and the quality is the same. How about added value that your product might offer, or that you can work into the deal to get wholesalers’ attention?
International Trade Brokers can be described as super salesmen, the people that really are at the top of the sales profession. Not only did they perfected the craft of successful negotiations to a fine art, they also have an extensive knowledge of the political and business climate of the countries they operate in, the commercial and legal aspects that have to be adhered to before a product or material can be shipped out in the first place.
Forget about expecting a greyish 55-year old, some of them are in their late twenties.
They can be described as the ultimate ambassadors for the companies they represent (not the manufacturer, but the brokerage company they works for), therefore diplomatic skills is crucial. For example, when you’re in some African countries don’t say something like: “Yeez, I wish I could import you some brooms to clean up your dirty roads!” Of course, the successful broker will keep silent and have the first trial shipment of brooms underway by then instead of broadcasting it for all the competition to hear…
In this regard, the international trade broker is like a modern-day James Bond, who sometimes have to jump on a plane at a moment’s notice to go and save a deal. The ability to work independently far away from the support system at home and to think on his feet is essential.
In international trade the number of successful transactions can range from just one per year to many more, depending on the type of product involved. With some transactions a broker can easily put millions of dollars as reward in his or her pocket for just one deal. That doesn’t mean that the broker only works a month or two a year however; the bigger the deal the bigger the stakes of losing it to the competition due to the short- and long-term profits involved. A lot of preparation and identifying both weak and strong points from the competition goes into every deal, sometimes several personal visits to a buyer in his country before the buyer is convinced.
Luckily, (all brokers smile please) this also involves social functions and meetings and get-togethers. Not without reason that more deals are concluded on a golf course than in a board room. A broker with a passion for his product and the countries he are visiting for prospective clients is a marathon ahead of a broker who are homesick. As Earl Nightingale have said, the strangest secret in the world is Attitude. Successful brokers make sure they master the control of theirs.
At the end it is still the buyer who have the final say. Selling on price only is a big no-no for successful brokers, with many buyers that will rather pay slightly more when the extra value added to the deal in the form of extended guarantees, better product quality, assistance with market proposition for launching the product in its new markets and other ‘trade secrets’ beat the competition’s offer.
There is one important aspect of international trade you need to learn before you even think of selling even a box of matches. (Yes, even that can be exported, in its millions though.)
Brokers deals with companies, right? Wrong. Yes, the company is the buyer who have to fork out all that money. But in reality just a few people in that company have the powers to makes the decision to buy, and only one or six of them will be signing the contract. A broker always deals firstly with human beings who have emotions, and only then with their company. That is why companies have bought before from the ‘more-expensive-deal’-broker instead of the ‘better-deal-but-less-favorite’ broker.
Buyers want the best product for the best price, but they also want the best broker. You are their link to a factory far-far away that most of them probably will never personally get to see, or only once in a blue moon. But you get to see both parties regularly and make sure everything goes smooth. They expect that from you. And when you can arrange a better deal for the buyer much later – even with another factory in another country – or for another product they can also resell, they will want to know about it.
Being an international sales representative or trade broker is all about building personal and business relationships and keeping it going. Heck, how cool is it to say: ‘Hey, that guy from Peru on the television is a client of mine!”
In short: An international sales representative finds markets for his specific product line, while an International Trade Brokers first identify a need that a buyer have and then sets out to find the right supplier.
**This is a modified excerpt of one of the chapters in one of Climate World Trade’s Training Manuals that our advanced agents and brokers-in-training receive. Climate World Trade offers the opportunity to people around the world to start out as agents for us working from their homes doing marketing of some of our products online, while they receive training for this at the same time and gradually work themselves up to became International Trade Brokers for us with accompanying training. With CWT our Trade Brokers’ expenses like flights and accommodation are paid for by us and they have the support of agents in the countries where they operate in and who can assist them with certain tasks.**