Full question:

Since reading your book I have begun searching out providers of scrap metal and located a guy who has over 170 suppliers globally. My concern is that he might be trying to secure a commission for himself beyond the measly one percent he offered me after he handles product details and delivery – on an IRDLC.

Does this sound like he might be trying to leverage the buyer and supplier for further fees for himself? Due diligence shows him to be cleared alright. I would appreciate your opinion based on the meager information I was able to provide you.

Answer:

“Ostensible Authority” – Currently are you in possession of an offer from a product provider that actually has product? This is the basis of any transaction.

FIRST YOU LOCATE THE PRODUCT – WHEN YOU ARE SURE OF THE PRODUCT MAKE AN OFFER WITH CERTAINTY.

You present as the purchaser. You are on the hunt for product. If you cannot find a source of product straight to you, then there is no product or source for one. At this stage you could only mull over any offer presented through an intermediary – IF THAT AGENT IS WILLING TO REVEAL HIS PRODUCT PROVIDER AND IF THIS IS NOT THE CASE – MOVE ON, DROP THE TRANSACTION AND LOOK ELSEWHERE.

You have to be sure of your product provider and that they truly do have product in their “pocket”
It could be the President of the United States telling you he has secured product but business is business and friends are secondary to the transaction.

If he requested a TDLC from you – then he is not a product provider.

Hence, you could just request that he present an offer and state your primary concerns – YOU HAVE TO MAINTAIN MANAGEMENT OF THE TRANSACTION AS THE PURCHASER AND THE PROVIDER –
UPON MAKING THIS APPEAL FOR A BID YOU MUST DEMAND:

• We are requesting an offer for – [what mt per month? at FOB from a product provider who has secured product]
• YOU ARE GOING TO BE RESPONSIBLE FOR COVERING A NON TRANSFERRABLE IRDLC
• YOU WANT THE INITIAL DELIVERY TRANSPORTED WITHIN NINETY DAYS
• RULES OF DELIVERY USING INCOTERMS 2000. RULES OF IMBURSMENT UCP600

Now you include your commission fee to the price and present the offer to your final purchaser.
If everything just described actually occurs and the offer is from an intermediary who in turn has revealed the provider to you then offer to pay him a commission fee that is in accord with URPIB rules of trade or even higher.

Then, Paul – whether you have secured a product provider or you have not is the single question that you need answered. It appears to me that this is not the case. I think he is seeking a commission while asking you to make the imbursement; therefore, he is the one who maintains power over the transaction – not you – he is working to develop into the purchaser and the seller both.

IF IT WAS YOU WHO HAD THE POWER IN THIS TRANSACTION, THEN THE PROCEDURE WOULD BE UP TO YOU AND THERE WOULD BE NO NEED TO EVEN ASK THIS QUESTION.

Try out what was just discussed and see what you can do with it.