What is a SCO?

A SCO is a Soft Corporate Offer.

This is a document issued by the supplier detailing what he is offering.

So it generally has the product name, specifications, payment terms and a FOB price (without shipping). It may also contain pictures.

This document is not addressed to any specific buyer because it is a document that can be handed to any buyer.
The contents wont change because the offer is the same from the supplier to all buyers.

It’s designed to give an idea of the product and price and terms which the supplier is offering.

This SCO should already be sitting on the supplier’s hard drive ready to hand out like candy to whoever asks for it.

Now, if your buyer asks you for a SCO, you can obtain the suppliers SCO and cover up the details and alter the price before you give it to the buyer.

Alternatively, you can copy all the details from the supplier’s SCO and paste it into your own letterhead changing the price to include your commission. Of course you wont include the suppliers name and contact details either.

I have attached a SCO which I received long time ago.
Take a look and see what kind of info it can contain.
But generally, SCOs are not so long. It can be just one page.


How to Converse with Diplomacy

Many of you have been having issues with talking to buyers.

To get something out of the buyer, it takes tact and diplomacy.

Buyers are international, and they have different cultures. Saying something one way may offend them while you think it’s perfectly fine.
The tone you use in your written word also plays a part.
Learn to keep it friendly and transparent.

If you say something that doesn’t sit well with him, he probably wont respond to you.

Here are some potential problematic situations…

  • Initial cold contact
  • Initial conversation
  • Pushing for a LOI
  • Asking for his maximum target price
  • Dealing with ridiculous demands

I’ll go over the type of language I use with buyers, below. Feel free to copy and use this with your buyers.
But remember, it wont work 100% of the time. You may have to adapt the words you use for the situation you are dealing with and the buyer’s temperament.

Initial Cold Contact

When you find the contact details for a potential buyer on Google or on a tradeboard, your first message to him is crucial. You need to craft your message in such a way where it compels him to respond to you. So there are certain psychological triggers which you can use to make this happen.

At the same time, you need to keep in mind that no matter what you do, some buyers just wont respond, and that is usually because they have lost interest in importing that product or it’s not high on their priority list or they made the RFQ post as a passing interest. So these types of buyers probably wont respond anyway.
The genuine and interested buyers will respond but you’ll probably get a 5-10% response rate, simply because the other 95% don’t check their messages or have become too busy to reply.
So if you receive a 5-10% response rate, you’re on the right track and there’s no need to worry. It’s quite normal.

Keep in mind that these buyers probably receive many replies from different suppliers and/or brokers.
They may be tired of receiving the same type of message and price that they have been receiving all along. Maybe that’s why they have lost interest.
So the question is, what are you going to say that will make you stand out and make them respond?

Whenever a buyer receives an email from a typical supplier, it usually goes like this…

Hello, my name is Xiao Lee. We produce and specialize in blue widgets. Blah blah blah.

The same typical boring email will not trigger a response from a buyer.

So you need to make sure you are different.

I usually get straight into the meat of it ,so the first few words they read heightens their interest, instead of having them wade through lines of unnecessary text.

My standard email goes like this:

Hi, I just read your request posted on the B2B portal. There’s a large amount of XXX available for supply on a continuous basis at a reasonably low price, quite possibly with a much better deal than you are receiving at the moment.

The specifications can be made to match or exceed what you require.

Are you still looking for this?

Amin Sadak

Lentrica Ltd
London, UK

Skype: webkept
Email: admin@lentrica.com

Depending on the product, I change the XXX for the product name.

This text mentions low price. It mentions a better deal. It mentions specifications. It mentions all this in as little text as possible.
The sole of aim of this text is to get the buyer to respond. That’s all it’s supposed to do.
Don’t add any unnecessary words or lines in there that you don’t need to, unless its specific to the product or price.

So if you were to make it more personalized for the buyer, you’ll have greater chances of a response.
For example, it you tailor the text to say something like…

I have the blue widgets you asked for at a lower price than you have seen up till now. Do you want to deal with the shipping yourself of do you want me to have it delivered to Florida? I noticed you live there so I’m assuming you want it delivered there. Let me know asap so I can start arrangements.

The more personalized you make it, the better.

Notice that I asked a question in the text which often prompts a buyer to respond to that question.
Also notice that I didn’t say anything about being a Contract Manager. Instead I acted like I was the supplier but I didn’t lie about anything.
The whole purpose is to get a response, after which we can iron out the finer details and reveal everything.

Initial Conversation

After the buyer has responded, he will most probably answer your question or he may ask for more details.

The aim of this conversation is to keep him interested enough to have him work with you and be ready to give you a LOI for your use.

I’m assuming this conversation will take place in real-time on Skype or Whatsapp.
So start off by responding to whatever he says. If he wants to talk about queen and country, then oblige him. If he wants to get straight into business, then follow his lead.
Don’t jump straight into business if that’s not how he wants to start (remember different cultures work differently).

Once you start the business conversation, focus on his requirements and ask him more in-depth questions about his requirements.
Show him that you are interested in the actual item that he is ordering. Don’t focus on anything else.
Ask questions like: what size? what colour? Where does he want it delivered?

Once you have the basics ironed out, then ask him about his payment preference. How would he like to pay?
After that, ask him what ‘s the maximum price he is willing to pay.

When you have all this information, then you need to sell yourself to him.

Let him know that you are not the supplier but you will contact 100+ suppliers for him to find the best deal with the lowest price. Depending on how the conversation is steered, you may have had to disclose this a little earlier. But you need to let him know now that you will do what you do best to make sure he receives the best deal while he continues his business at home.
Sell it to him and make him believe that you will do what is necessary to finalize the deal for him.

Once you have built this rapport and he believes you, now it’s time to ask for the LOI. I’ll cover the words for this below.

If you find that the buyer does not get back to you after this initial consultation, then that means you may not have done a good job in convincing him. Or it may be that he’s just wasting time.

Pushing for LOI

After you have asked for the LOI, he may respond in one of three ways.

  1. No, I don’t work with LOI, or I won’t make one.
  2. Yes, I’ll make that for you.
  3. I need your price and terms first before I make it.

If he’s not willing to make the LOI, determine if it’s because he is lazy or because his type of business is so fast moving and their culture doesn’t normally deal with paperwork as much. If it’s the 2nd reason, then it may be worth continuing without the LOI. If he’s just lazy, give him the words below.

If he promises to make the LOI for you, great. Wait for it. If he still hasn’t sent it by the next day, ask him again politely. Push 2-3 times. If he still hasn’t made it, then leave him an ultimatum and move on to the next buyer. It would seem that he doesn’t have enough interest to purchase the product urgently, thus ending up wasting your efforts.

If he wants the price or terms first (or he’s a bit lazy as above), then you need to explain your part role and how the system works.

You can use these type of words:

I will be contacting 100+ suppliers for you to get you the best possible deal and the lowest possible price, specifically for the requirements you have mentioned.

Now most of these suppliers want your requirements written down on your letterhead (known as LOI) before they will take you seriously and give a price.

So without the written LOI, it will be very difficult to get the best deal for you and fast.

How soon can you write down your very own requirements on your letterhead for these suppliers?

This text explains the situation while urging them to write it at the same time. It also ends with a question, indicating that he has no choice. His answer has to be a timeframe, thus making him commit.

Do you see how this text is not blasting him by being angry, but rather encouraging and pushing him while being nice about it. If he still doesn’t send the LOI after pushing him 2-3 times, dump him.

Maximum Target Price

Sometimes, when you ask for the buyer’s maximum target price (the max amount he is willing to pay for the product), he will ask you to quote him first.

The psychology behind this is, he doesn’t want to give you his max price because if you have a lower price already, you may just raise it to match his maximum price.
So he wants to take advantage of the lowest possible price available (naturally).

The problem for a Contract Manager is, you may contact one supplier and he gives you a price. Then you spend time finding out about that supplier’s terms and conditions and quantities etc… You then relay this price to the buyer and he rejects it saying “it’s too much“.
So then you go back to the drawing board and do the same thing over and over again.

If you had the maximum target price already, you could have spoken to hundreds of suppliers and rejected those that didn’t fit the max price set by the buyer. You could also negotiate with them to lower their prices and you would know how much commission you can play around with.

So it’s important you get the buyer’s maximum price before you start searching for a supplier.
When he gives you his max price, he may make it lower anyway just to try his luck.
So if he gives you a max price of say $170 per ton, then ask him, “if I find a great supplier who meets your payment condition and is verified, but he quotes $180, should I reject him straight away?”
If the buyer starts thinking about it, then that means his max price was not $170. You need to dig deeper and find out his absolute limit. Or you could contact suppliers anyway and report back any price just above his max price (including your commission).

If he just doesn’t want to give his max price, try using the following words…

I will be contacting hundreds of suppliers for you and each of them will be giving me different prices. I can’t keep running back to you after each price.

So I need to know which ones I can reject straight away according to your maximum target and terms.

If I don’t have your absolute maximum target, I will be wasting many many hours which would be counter-productive for us.

So give me your best price and I will try and find you something even lower for you if I can.

If the buyer just doesn’t want to give you his maximum price, even after giving him the pitch above, then you can play a smart trick on him in order to extract his max price.
Contact him again the next day and quote him one of the higher prices you find on Alibaba listings. Once he refuses that, he will say something like “That’s too much. The max I can afford to pay is $xxx.”
Works many times.

Ridiculous Demands

During your initial conversation with the buyer or when you receive his LOI, you may notice that he is asking for something which could be very hard to find.
For example, he may ask for payment to be accepted after he checks the goods at the destination port.
Hardly any supplier would accept such a condition on the first shipment.

So you need to convince him to change this request and accept a more reasonable condition.

The way to do that is with social proof of your experience.

Generally, I would use a pitch like this…

I have spoken to hundreds of suppliers from across the world that exist on the database. And I do mean hundreds of them (not just a few). After conversing with all of them, I learned that none of them, and I mean not a single supplier anywhere is willing to accept such a condition from a brand new buyer on the first shipment.

So I know that if I spend a few days of my time looking for the best supplier with the lowest price just for you, I will probably find a few, but I know that none of them will accept this condition that you are asking for. So then I would have found some great verified suppliers but I would have wasted a few days of my time for this simple issue.

Knowing this, are you willing to negotiate on this term? Are you willing to make a small change to make this deal go forward?

This text has some psychological triggers built in. Try it and see if it works.

When he starts wavering, you can push him some more in order to make him change that condition for a more favourable one.

In conclusion, the words you use are very important.
Words contain psychological triggers which can make people change their mind. If you use certain power words or dramatic words, these can alter the perception of a buyer.

If you find that a certain way of talking works for you, use it again and again.

Learning how to read your buyer is a skill. When you become good at it, you can manipulate them (in a good way) to your advantage.

Hope this helps,


Dealing with Suppliers and Commissions

At what stage of the process should you discuss commissions with the supplier?

Initially, you will talk to the supplier about the product and the price and the terms of payment etc.
You will relay all of this back to the buyer and then if the buyer has additional requests for pictures, certificates etc, you will go back to the supplier and ask for these things.
This way, you will be liaising between the buyer and the supplier without disclosing any name/contact information of one party to the other.

If you do have to pass a document such as a LOI to the supplier, or pass the SCO from the supplier to the buyer, you can simply blur the contact information before you pass it on.
Alternatively, you can copy all the relevant info on to your own letterhead and pass that on.

At some early point in this process, the buyer will want to know the price.
So take the price from the supplier and add your commission on top and then quote that to the buyer.
Once he accepts the price, then now is the time you need to be crystal clear with the supplier regarding the commissions.

You will inform the supplier…

You have given me a price of $xxx and I have carefully calculated a commission for myself and my company to be added on top. So I have quoted the buyer $yyy. This means that my commission from you will be $zzz per ton.

If the buyer does negotiate the price with you, feel free to change the price but please keep my commission amount intact. Also remember to quote him my price in all communications.

I have already spoken with the buyer and he is happy with my price, so we may proceed with the deal.
Are you happy to sign an agreement for the transfer of commissions to my account after you have been paid by the buyer?

You may have just sprung the commission discussion on him suddenly but 99% of suppliers have no problem with paying commissions. They know that there are many agents in this game and it’s quite normal to be paying commissions to anyone who brings them a deal.

When you add your own commission on top of the supplier’s price, they don’t usually have a problem with that because it’s not their money.
However, if you ask for a commission from within their price, they may try to limit that to a certain percentage.
I always add my commission on top. That way, you have free reign to add as much as you want. It’s no skin off the supplier’s nose.

But sometimes, some suppliers don’t want you to add too much on top. It could be for a couple of reasons. Either they don’t want you making more money than them (sometimes they ask you to share that overprice with them – cheeky gits) and sometimes they don’t want the price to change too much in the market for some reason.
Whatever the reason, if they limit the commissions, I generally try to find another supplier who doesn’t have a big ego.

If your buyer is willing to pay a large price and you can comfortably fit your own commission in between his price and the supplier’s price, then I would generally take all of it (while giving a small discount to the buyer) and expect the supplier to be ok with that since it’s not part of his money.
When they try to dictate how much you can put on top, I really dislike that. However, sometimes you have to accept it when there aren’t many suitable suppliers around.


Supplier Verification Elements

Ok, so we know that our income depends on genuine suppliers.

If the supplier has set up a presence just to con buyers, then they are not likely to pay us either.

Therefore, in many situations it’s important to verify the supplier before you connect them with your buyer.

If the supplier is offering a LC payment method, then this is a good indication that they may be genuine. But it’s not foolproof. Even with LC payment terms, suppliers can con buyers by sending poor quality goods, or faking the paperwork to get the money released by the buyer’s bank.

If you come across a supplier who is asking for a percentage upfront (as an advance payment), then this is common business practice done with TT.
Typically, the supplier asks for 30% upfront to arrange and prepare the goods, and then they accept the remaining 70% after the ship has been loaded and the Bill of Lading (BL) has been issued. Some of them even accept the remaining 70% after the shipment arrives at the destination port.

But this request for advance is also the most abused. There is a chance that the supplier is not genuine and all he is after is the 30%. 30% or even 10% of say a $100,000 order is still $10,000. Enough for con men to thrive.

Once they receive this deposit, they run and you’ll never hear from them again.
I’ve heard that story a million times.

So if you do have a supplier asking for an upfront payment, you need to check and verify this supplier to the best of your ability.

The first thing to do is ask for their business documents.
This would include:

  • Business Registration Certificate
  • Tax or VAT Records

If you receive either of these two, then look for any signs of alteration.

Having said that, these documents mean very little. Any con man can set up a company to scam someone and then dissolve it. Tax records, yes, that’s a bit more convincing.

The best type of proof I look for is a past shipment record. Usually, this is a previous bill of lading (Past BL). It shows that they have indeed shipped the product before, and thus, they are genuinely in this business.

But what tends to happen when you ask for a past BL is, the supplier refuses.
His normal excuse is, “we don’t want to disclose our buyer information” which is printed on the BL.

When he says this, ask him to sanitize the document by covering or blurring all the sensitive data on the BL and then sending you the document in that state. It’s called a sanitized document.

Then, they may come back and say “No sir, our company policy doesn’t allow us to give these types of documents out. It could be mishandled and misused over the Internet“.

This may be a genuine concern but my gut tells me that they are hiding something.
So in this case, if they haven’t shown me other adequate proof of a legitimate business, I would most probably forego this supplier.

If they do provide a past BL, then look for signs of doctoring the document. Sometimes you may see darker print or different font where their own name is compared to the rest of the document. Also go to the shipping company website and punch in the BL number. See what shows up.
If you can’t do that, email the shipping company and send them the document. Ask them if all the data on that document is genuine or altered.

The next thing you can ask the supplier is… “Can I visit you before I make the initial 30% deposit?
The main reason for asking them this is to determine if they are hiding something or not.
They may be scamming people out of their bedroom for all we know.

Then ask them for their address.
When you get the address, check that address on Google Maps, satellite mode and do a street view.
This will put you in front of their building.
Check to see if it’s a house or an office/building.
I’ve caught many South African scammers this way. The address they gave me showed me a residential house.
Yes, they may have a home office, but it’s not likely.

Then I would ask for a website.
Many of them may not have one, but if they do, check the address on there. Check the phone number matches their country.
Do a WHOIS lookup to look for any inconsistencies.
Also check to see if they are using their website email to contact you or a gmail/hotmail type of email. Ask them about it.

Ask for their Alibaba page. If they don’t have one, then how did they contact you? They must have some presence on the internet. You can use that presence to do a google search… “company name + scam” and see what shows up.
If they are on Alibaba, how long have they been on there? If they are say a 5 YR Gold Supplier, then that’s a good sign. Or if they have been vetted by Alibaba under their Trade Assurance checkbox, AV Check, Assessed Supplier, that’s a very good sign. This shows that this is a genuine supplier.

Check the scam sites that some of our members have kindly put up. See if they exist there.

SGS is a third party company that many suppliers use to check the goods on behalf of the buyer.
Ask them for a SGS report. If they provide it, contact SGS and ask them if it is genuine. This shows that they have provided goods for a buyer before.

You can also ask them for various other certificates that generally accompany the product, such as organic certificate, health certificate and so on. A genuine supplier should have these handy.

Ask them for pictures. If they send you stock images, that could be a red flag. Look for real pictures which they have taken themselves.

If they supply many different types of products, then they could either be a trading firm or a simple scammer. If they only supply one product, that’s a good sign.

Whatever document or certificate they give you, check to see if you can spot any alterations. Darker print or changes in font are usually tell-tale signs.


Letter of Intent

Many members have posted issues with LOIs.

So I wanted to go over a few details regarding LOIs in this post.

Reasons for LOI

There are two main reasons for requesting a LOI.

  1. To collect all the information necessary from which you can accurately get a quote from any supplier.
  2. To see if the buyer can be bothered to write his own requirements.

The LOI must be on the buyer’s own letterhead. Ask him to write it on his own letterhead which contains his logo, company name and address.
Some new startups or companies in third world countries don’t use logo letterheads. They just write their name and address at the top. So if they say this to you, then you can accept that they write down their company details at the top to simulate a letterhead.
At the same time, explain the importance of having a letterhead and lecture them on it. Let them know you can get a professional letterhead made for them for $100 which they can use for all business transactions.
If you don’t know anyone who will make it for you, let me know and I’ll sort it out.

Time Waster Check

When you ask for a LOI, don’t just hand them the template I have given you in the members area. That template is only to be used when they don’t know what a LOI is or what information should go on there.
Remember, you want him to make the effort and write it by himself rather than take the easy route. You want to see if he will use enough energy to write down his own requirements.
If he can’t be bothered to write down what he himself wants, then you can’t expect him to draw up the contract or make payment. I would classify this type of buyer as a time-waster. He will probably get cold-feet when it comes time to making payment, thus wasting your time and effort if you worked for him.

Maximum Target Price

On my template, I have written down “Maximum Price”. This should not be on there. This is something you need to get from the buyer but you cannot leave it on the LOI. You need to have it written down elsewhere or contain it in your head.

The reason why you shouldn’t have his maximum price on the letterhead is because some suppliers will ask you for the buyer’s LOI.
If you hand them this LOI with the maximum price written on there, the supplier may change his lower price to the maximum price to gain max benefit.

Instead, find out the supplier’s lowest price and calculate the difference between that price and the buyer’s maximum target price.
If the difference is large, then knock a little of the buyer’s max price to make the buyer happy and quote him that price. This means, everything in between is your commission.

To Blur or Not to Blur? That is the Question.

When you receive a LOI with the buyer’s company name and address and contact details on there, you may have to blur that information before you hand it to potential suppliers.

If you are contacting suppliers for the first time and they ask you for a LOI before they can quote you, have a copy of that LOI ready with the sensitive data blurred out.

So as soon as they ask you for a LOI, just drag that LOI into the chat window immediately so you can get a quote without any additional effort.
Since it’s a brand new supplier, you don’t want to expose your buyer to them just in case they decide to steal your customer.

What if it’s a supplier who you have been talking to for some time?

If you have been talking back and forth for some time with a supplier, but you haven’t signed a fee agreement with him yet, then he also deserves a blurred copy of the LOI.
When you have concluded a fee agreement with him and received a signed copy, then you can immediately send him the non-blurred LOI.

From that point onward, you can continue to send him non-blurred LOIs for the same product from any new buyer.

Having said all this, if you have built up a good relationship with the supplier and you trust him, then there is no need to blur the LOI even if you still haven’t signed a fee agreement with him yet. But you should get that done asap (since you will be working with him often).

Added Advantage

After the buyer has handed you the LOI and it has unrealistic demands on there, then you can tell him straight, “this is impossible” or “I have spoken to hundreds of suppliers across the world and not a single one accepts.…”

Once you say these words, he may feel more pressured to change his demands since he took the effort of writing that LOI. He doesn’t want that to go to waste, and so he may be willing to compromise on his demands.

Getting a LOI from a buyer is like squeezing water from a stone

After reading many of your posts, I see a common complaint regarding the frustration of trying to get a LOI out of a buyer.

When you ask for it, all you hear is crickets and you may see the occasional tumbleweed drift by.

There are two scenarios that I can think off.

First, no matter what you do, no matter how much you ask for that LOI, you will not get it because the buyer is a real, bonafide, lazy, time-waster. If he doesn’t hand you the LOI, you should be happy that he has saved you hours of time (contacting suppliers). Be glad to get rid of him. It’s not your fault and you didn’t do anything wrong. You simply came across a time-waster. Learn to remove him from your memory and swiftly move on to the next buyer, without being frustrated. And that is the key – don’t become frustrated when he doesn’t respond.

The second scenario why a buyer may not instantly respond to your request for a LOI is because of the way you came across to him.

Making deals is all about human interaction. Many buyers play it by feel. If they sniff a whiff of bullshit, they’re outta there. If they doubt you in the slightest, they’re outta there. If they don’t feel comfortable with you because of the words you have chosen to address them with, they’re outta there.

Although you should be professional at all times, that doesn’t mean you should speak to them like a robot or in a stern way.
On my initial contact, I would keep it formal but also light-hearted and friendly.
When they respond, I like to talk to buyers in the same way they come across to me. If they speak slang or poor English, I grade my language to match (so they understand better) while still remaining professional in what I say.

If you are business all the time and they are more interested in finding out about you as a person, then that is one way to break a new relationship. Engage with them. Talk with them. Be friendly. If they want to talk about your age and your country, oblige them. When the friendly banter has finished, you can casually bring the buyer’s requirements into the conversation.

Golden Rule: Never ask for a LOI straight out of the gate!

Engage your buyer first and establish a bit of rapport. When the fire is kindled, and you have spoken about his requirement, then just before you leave, you should ask him for the LOI at that point – right at the end!

During your conversation about the commodity which he wants, you want to impress upon him how you will find him the best deal at the lowest price and at the most favourable terms. Keep reminding him in different ways.
If you do this, you are subliminally creating a sales pitch which is convincing him that you are on his side and you have his best interest at heart.
You’re not asking him for any money either.

So at the end of the conversation, when you ask for that LOI, you should have him eating out of your hands. Your chances of getting water out of that stone will have risen drastically. He will feel obliged to make one for you soon.

So next time you talk to a buyer, try this tactic.
If it still doesn’t work, it may be that he is from the first scenario I have explained above (a genuine time-waster).

Your Decision

Having said all of this, the final decision rests with you.
Strictly speaking, you don’t need the LOI to make a deal. You can just as well complete a deal without the LOI. But having a LOI will keep you safe and avoid you wasting countless hours (unless suppliers ask for it).

So if you feel that the buyer is genuine and he wont waste your time, or maybe you have received the LOI but with the letterhead missing, or some other information missing, ask yourself, “what do I think of this buyer“. If your answer is positive, then you may decide to proceed with what he has given you and not push him for the rest.

If you are not convinced with what he has given you, then by all means, ask him to complete the rest of the LOI with specific pieces of information and then send that to you.

If they still don’t respond, push them a couple of times (just in case they were genuinely busy) and after that, dump them and move on. There are plenty more fish in the sea.

I hope this article has helped clear up some LOI issues. I may add to this article from time to time depending on the questions that arise.

Good Luck,