Precautions Necessary for an Online Brokerage Business

Precautions Necessary for an Online Brokerage Business

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 NonCircumvention and NonDisclosure 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 TMs 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 TMt 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 TMs company TMs letterhead shows the seriousness to purchase the product. The BCL, issued on the letterhead of the buyer TMs bank, demonstrates that there are enough funds to cover the payment. Your bank will check the availability of funds from the buyer TMs 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 TMt 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 TMt 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. Virusinfested mails abound these days. You must therefore protect your computer and the valuable data stored on it with the latest antivirus 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 LomeTogo 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. I started as Executive Secretary and ended up five years later as Manager. Then I founded my own company in 1987 which I ran parttime. The activities of the firm having increased dramatically in three years, I diversified into imports and exports. I am married and have 3 children.

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