New Realm Can Improve Your Success in Commodity Trade Transactions
Our research (via surveys of buyers and sellers) and practical experience in the course of transactions revealed some the key reasons that commodity transactions fail:
- Significant level of fraud and deception (e.g. non-existent buyer or seller, spurious documents, circumvention of relationships, failure to pay)
- Lack of trust between the principal parties and refusal to disclose pertinent details regarding financial capability, deliver required documents
- Inappropriate leveraging of counterparty’s documents in order to secure financing, take and hold title to product, or resell in a ‘back to back’ arrangement
- Negative experiences with failure to perform on contracts – this is particularly true of buyers and sellers located in certain countries
- Long intermediary chain between the buyer and seller increases confusion, makes communications inefficient and indicates a weak buyer or seller with limited experience and contacts
To address and resolve many of these issues, NRI seeks to build trust between the principal parties by:
- Being ‘direct’ or, at most, one intermediary removed from the buyer and / or seller.
- Working only with buyers and suppliers / sellers that have been introduced by known and trusted contacts