"Why can't Frank write down the terms and conditions for
the sale and purchase of diesel?" Khin Khin asked me a
few times today July 21, 2010. "He is the Seller's agent
and should provide the info in writing."
Khin Khin wants to be a successful businesswoman doing
big deals. She had stopped being an employee veterinary
technician for the past two years. But the mega deals
seem to be elusive. Meetings after meetings are a common
occurrence in commerce. She would invite me to attend
some meetings to help her close. But for the past two
years, she had no mega deals in commodities. In
business, performance counts. There must be a deal
closed. Otherwise, time would have passed and there
would be no income for the year.
"It is possible that Frank does not write or know how to
write the terms and conditions," I said. "I will phone
him and ask for the details." I don't get involved in
this wheeling and dealing as it takes up too much of my
time. But it seems that Khin Khin does not know how to
close. The first thing is to know what is the problem.
THE PROBLEM
The Buyer wants to buy diesel at the lowest price, far
below market rates monthly at a fixed price every month.
THE SOLUTION
The Buyer's wishes cannot be fulfilled. "Walk away from
this deal," I advised Khin Khin. "It is a waste of time
and I get fat when you order oily food for me to eat
when I attend your meetings."
PERSEVERANCE
But Khin Khin would not give up. If the deal is closed,
she gets commission. At least 40 times more than a
veterinary technician earning $2,500 a month. That is
for one deal.
MY SOLUTION
I wrote the following sales procedures for Khin Khin's
buyer after talking to Frank who was lamenting and
cursing that Khin Khin's buyer keeps asking for old
prices. "If the Buyer had bought 2 months ago, the
prices were much lower and he could have made
US$150,000!" I provided a listening ear as Frank who is
around my age had 4 heart by-pass. I noted that the scar
on his left hand where a vein was taken for his heart
had healed almost 90%.
This is my e-mail to Khin Khin:
1. If you want
to buy at a fixed price every month for 12
months, but pay only by monthly payments when you
receive the diesel, the Seller does NOT do
business this way.
2. The Seller wants a 12-month contract and a
Letter of Credit (LC) which must be paid to the
Seller's Bank in the full amount of 12 months. The
Bank will only release the money to the Seller
monthly when the Buyer takes delivery of the
diesel.
3. If you want to buy diesel one month at a time,
you will have to pay spot prices) depending
on market prices. You will not get a fixed price
as it is given only for a long-term contract such
as 12 months with pre-approved LC.
4. When the LC is shown to the Seller, then the
terms and conditions of the contract will be given
to the Buyer. For example, how long the diesel
will arrive at Yangon and any other questions will
be answered.
5. The problem here is that diesel prices keep
going up monthly but the Buyer's agent in
Singapore wants to buy at old prices 2 or 3 months
ago saying that they can get the price at such low
prices in Myanmar.
6. If this problem can be resolved, then there
will be business for both parties.
To: The
Buyer
If you want to buy diesel at a fixed price for one
year, the following procedure from the Seller is
as follows:
1. Open a transferable LC with (XXX - Name of
Company) in a Singapore Bank.
2. When the price of diesel is agreed by the
Buyer, XXX will transfer the LC to a Singapore
Bank of the Seller.
3. A contract of sale will be given to the Buyer
only when the LC with XXX is shown. This is to
make sure that the Buyer is serious.
4. The Seller's Bank will release the money
monthly to the Seller only when the documents of
sale are in order. If not, no money will be
released.
5. The Seller's Bank holds the one-year amount for
this one-year fixed price locked-in contract.
6. If the price is not agreed, XXX keeps the LC or
returns the LC to the Buyer.
7. In this situation, the LC costs around $4,000 -
$5,000. This will need to be paid by the Buyer and
will be his loss if there is no transaction.
8. Without proof of the LC in XXX, no other
paperwork will be prepared as the Seller considers
that the Buyer is not serious in this purchase.
I hope the above will be easy to understand.
If the price is lower in Myanmar, the Seller is
not agreeable to lower or to match the price in
Myanmar. Therefore, it will be a waste of time
negotiating for previous low prices. Diesel prices
have gone up a lot and so the Seller will not be
selling at old prices. |
THE BEST
SOLUTION
Direct oral communication with the real Buyer in Yangon
to know what his worries are as the money to be given to
the Seller is in large amounts. Writings can be
mis-interpreted.
DOG ATTACK
 I
was at the apartment of Khin Khin's friend and business
partner to type the e-mail during lunch-time. The friend
had adopted a Chihuahua given up by the first owner.
The Chihuahua had stayed in my Surgery for some time in 2009 when he was
ill and was neutered. He kept barking at me with the
full force of a lion, knowing that he had a big mama to
protect him. Khin Khin's friend had to take the dog away
from me but the dog persevered in barking at me.
As I left the apartment after writing the e-mail, the
dog found his chance, sprang up and nipped my right leg
trousers just as I stepped out from the main door.
"It is lucky that I wear long pants," I said to Khin
Khin's friend. "Otherwise I will get a nasty bite." Both
businesswomen had no sympathy for me nor do they
reproach the dog. They simply laughed at this little dog
who had exacted his revenge on a vet who had injected
and neutered him when he was younger. It was no laughing
matter for me. Such are the hazards of being a free
lance unpaid consultant to Khin Khin and in going to a
apartment of a Chihuahua who dislikes me. The image
shown here is the Chihuahua with his first owner. It is
good to know that he is well loved by Khin Khin's friend
in Toa Payoh. To the extent that he is allowed to bite
the vet!
|
TOA
PAYOH VETS
