Friday, November 5, 2010

Beware, it’s in the detail.

The internet has made it easy for legitimate companies to buy and sell petroleum. The problem is that it has also made it easy for illegitimate companies to operate. It has gotten to the point where buyers and sellers are wary of anyone who deals in petroleum products.

However it is possible to find real sellers, if one is prepared to look. But, as the heading warns, the traps are in the detail. Always be on the guard because the illegitimate buyers and sellers out there have more tricks up their sleeve than a circus magician. Here are some tips to stay ahead of them.

1.      When you get the SCO check the procedures. Be on the lookout for requests for fees/charges in addition to the actual cost of the product. Commonly this will be fees for contract registration or transfer of title. These should be included in the cost of the product already and is a good sign that this deal is one to be avoided.

2.      When you receive the FCO check the wording against the SCO. Many buyers will assume the wording to be the same. Often this has been changed in small but important way and they will also set a tight turnaround time for a buyer to return the FCO, giving a buyer less time to check.

3.      When you get the Draft Contract again check the wording, and not just the main parts. These documents are often 10-12 pages long and it isn’t hard to slip something in hoping that the buyer will not check every page. Of course you have to sign every page so if you don’t check you have no-one to blame but yourself.

4.      Finally check the Final Contract before you sign it. Until you have established a relationship with the seller, including the completion of a successful transaction, be alert.  

Written by Haydn Leseberg, Trade Manager, Sutlet Group.

Sutlet Group provides professional trading services via our contacts of buyers and sellers all over the world.

Contact us for pricing on coal, petroleum, rice, urea, chemicals, iron ore and sugar.

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