Possibly the most important key on the ring: Humility

A few weeks ago, I was on a skype call with an associate of mine discussing African gold deals. In a nutshell he was telling me that I have to get one of my African contacts to travel with gold to his refinery without issuing a financial instrument and without paying any transportation cost whatsoever. While this might seem like a reasonable way of doing business I am here to tell you that it is not. For any commodity transaction, you receive an offer or a draft contract and it states where the commodity is located. That means the buyer has to go and get it. If it is a CIF transaction then the buyer has to proof up. No one is going to risk not being paid for their goods.

In any case, my associate could not see the light of reason no matter how many times I explain it to him that it is at best extremely difficult to find someone in any part of the world that will do business like this with their goods. Especially if the goods in question are extremely valuable like gold happens to be. His eventual response was that I didn’t know what I was talking about and that he now knows more than I do about the gold business even though he has spent less time working on gold deals; never having closed a single one might I add.

This brings me to the main point of the article. My response to this was simple and dismissive. I will not get into a pissing contest with another broker it is just a waste of time. I have stated this in other articles, if you want to be in this business then plan on being in it for the long haul. It may take you years to develop the right contacts on both sides of a deal to get one to actually close. You will not maintain nor create new relationships if you go into a conversation thinking that you know more about anything than anyone.

I have seen deals go right to the brink of closing and fail because of this. Buyer and Seller mandate on a conference call and someone sets the other one off because of an off comment and then hangs up the phone. Deal dead.

I will say that it’s mostly the brokers who have this holier-than-thou mentality. I have seen broker chains 12 brokers long and someone in the middle says he has to have .5% or he will not pass on the documents to the next broker. Deal dead.

I have had the same experiences with short broker chains where there is only 1 or 2 other brokers before the seller. I have even had these kinds of disagreements with a seller mandate who had to get paid on the buyer side. Deal dead.

Needless to say, most disagreements are about commissions.

If you want to close a deal in this business you have to be easy. You have to work at it too. You have to do everything in your power to get everyone else involved to be easy too. There is no reason to squabble about commissions or whose paymaster is going to be used or whose name is on the top of the LOI or any other aspect of any of these deals.

Push the docs through when they come in, split the commissions evenly, don’t pretend to be or act like something you are not and don’t claim that you are more knowledgeable or more experienced even if you are and maybe, just maybe, you will be on your way playing this game effectively.