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Working as a Broker

Started by crtreedude, November 03, 2004, 07:02:00 AM

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crtreedude

First of all, let me state, I don't want to do this job, so if someone wants to tell me I am crazy, PLEASE DO IT.

Okay, because my website is getting so much traffic and because I live in Costa Rica, I am getting lots of inquiries wanting to know if I would be willing to help them find Teak for purchase and shipping out of the country.

Normally, I would be thrilled. But I am busy and I only know about half of what I should know about the whole business. One company wants me to find them over 500 cubic meters of teak per month.

So, instead of just turning it down (I tried to gently tell them I probably am not qualified) I thought, perhaps my good buddies on the forestry forum can help me out.

What say you? I have questions, bunches of them. Think it could be a good thread?

After a lot of hard work, I have managed to find some teak and some very good teak at that. Supply is really tight, but with work, it can be located.

Here are some of my questions:

1. What should I charge for my services? I will not be cutting, hauling or doing much of anything except making sure all of the parties are doing their job. Also, arrange the contracts with the buyers is part of what I would expect to do since I speak and write Spanish, and the customers don't.

2. How do you ensure that the money will be paid to the owners of the trees and those who worked at getting them to the ship?

3. What should I be worried about (except for lack of sleep) ?

4. What is your honest opinion? Should I run for the mountains, or try to see if I can provide this service? I do have people who work for me who are forestry engineers, etc. so we do have much of the skill in house.

Thanks,

Fred
So, how did I end up here anyway?

Tillaway

We sell timber to brokers, usually they pay for the logs then market them to other mills.  It is a bit risky, and requires good contacts with reputable people.
Making Tillamook Bay safe for bait; one salmon at a time.

SwampDonkey

As Tillaway suggested, its risky business being a broker. Our local marketing board is a broker of wood that sometimes pays for wood volumes several weeks before they recieve their money from the mill. They also pay the truckers who haul the wood so they don't have to chase the producers for thier pay/fee. I've seen the marketing board front as much as $200,000 in wood deliveries, then end up holding the bag if the mill goes under. One board was fronting close to $2,000,000 as the mill was several months behind payment, but it was a reputable mill or the brakes woulda been put to her long before that. The fee you charge would depend on the volume of wood you broker. My local board only charges 2.2 % of sales, and 0.5 % goes back onto the ground with silviculture and developing Plans and courses for woodlot owners. They do $10-12 million in sales annually and that levy/fee supports 6 full time positions, plus 2 seasonal staff during silviculture season. If your doing small volumes of wood, I'de expect 10 % of sales for your time and efforts. As your business grows you may adjust that fee, but remember its good to buffer the wallet against risk. Also, look into some kind of insurance in case of the buyer going into receiver ship. The insurance may be too costly, but I think its based on your annual revenues. I'm in a dark as to what contacts you have available at your disposal for wood markets, but if your a member with an organization such as The Maritime Lumber Bureau, as an example, it will give you a jump or keep you on par with the competition and the market trends. It certainly is alot of work and sleepless nights. Not a career I dream of. ;)

cheers
"No amount of belief makes something a fact." James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

rebocardo

I would not let ANYTHING leave the country or be loaded onto a ship without CASH being in my hands to pay everyone. That means a money transfer (not a check), empty the account of money, and transfer as cash to the people that need to be paid so nothing can be with drawn or attached one day later, including your own paycheck.

People pull many international scams, having cash in everyone's pocket before the product leaves is a good buffer.

crtreedude

Totally agree. You all are echoing my concerns with the whole deal. Unlike conventional wisdom, I am very prone to look a gift horse in the mouth - I might have to pay for the dental work and braces!  :(

Thanks for all the feedback. Any more words of wisdom out there?

Fred
So, how did I end up here anyway?

sprucebunny

Life is too short to deal with all that aggravation and worry.
MS193, MS192 and an 026  Weeding and Thinning. Gilbert Champion sawmill

customsawyer

That sounds like one of those jobs where you would rather be fishing. So with that being said if these companies want you to give up on your fishing time than they should have to pay you dearly!!!!!!
Two LT70s, Nyle L200 kiln, 4 head Pinheiro planer, 30" double surface Cantek planer, Lucas dedicated slabber, Slabmizer, and enough rolling stock and chainsaws to keep it all running.
www.thecustomsawyer.com

crtreedude

Now that is a word of wisdom! There is only so much hours in the day, and working all the time is not they way to spend it.

So, how did I end up here anyway?

Buzz-sawyer

I look at this situation two ways.
1) it is a fantastic opportunity that will require you to strech and grow as a buisiness person,  
 2) it will take you out of your comfort and change your lifes direction.
On the up side I have made great sums of money when I deviate from the norm and take the challenge....(though it usually consumes my life and alters my course)

on the down side it is at times VERY difficult and challenging.
,
As you probably know , life only presents a limited amount of oppertunities to each person........this is what many call luck. The real LUCK is what we do or dont do with each given oppertunity.
Risk taking is key to advancement, in all areas of life.........deciding which ones are worth while , is what makes us or breaks us.....

     So you are the middle man . providing 162,000 bdft a month of teak, a difficult to obtain and costly wood. Your are a AMERICAN who has in country connections, and CAN sniff the stuff out.You have a miriad of responsibilities, containers, shipping customs, supplier costs, travel.........
I think I would AT LEAST mark up between 50 cents and a dollar a board foot.$80,000 a month gross profit .(minimum.)........The real key as a broker is what you can find it for, what the going wholsale rate is and keeping the producer away from the buyer. :D
Don
    HEAR THAT BLADE SING!

crtreedude

True enough, but I also have to admit I have entered the time in my life where the amount of money I might make has less of a draw than it once did.

Not that I am rich, but  I do have enough trees planted and doing very well thankyou, so that I don't have to worry much about the future. And, even though I am not old, I have been fighting the battle of business for more than 25 years already. I have to admit, it doesn't interest me as much as it once did.

Therefore, I am still checking it out, but moving very carefully and slowly. It might work out, but only on my terms. Nothing more is worth it.

Fred
So, how did I end up here anyway?

Buzz-sawyer

I have certainly pased up more than I have taken....cause as I said it takes my life in different directions.......I have traded many valid oppertunities for what I value most FAMILY.

So let me re- phrase, ,"Fred, are you CRAZY!" Why take on all that hastle and BS dealing with buerocracy and peoples non sense.....Go sit on your volcano and have a margarita ride horses watch your trees grow..you have enough cash, and have faced enough challenges in life to prove you can do it!
You have what you want ..so live life.... ;)
    HEAR THAT BLADE SING!

crtreedude

Yep, that is getting to be my take on the whole thing. Often we think we need something else when we have what we need in front of us. Besides, it makes me wonder, why come to me? It may be true, you should not look a gift horse in the mouth, but then again, bad horses have a way of eating all of your hay.

It has been intriquing though, which is why I have been investigating it.  It has been very interesting too, digging out all of this information. The nice thing is, if it turns out to be real, I will hire one or two people to do it full time, instead of me.

However, nothing I am willing to bet the farm on.

Fred
So, how did I end up here anyway?

Fla._Deadheader

 Well, just hang in their, Fred. I'm a commin :D :D :D

  Is there a better time for you, that I can schedule my visit???

  I'm looking at 3 weeks. There are a couple of other things I want to check out, while I'm down there.

  Start Shingling tomorrow.  8) 8) 8)  Mid January Ok ???
All truth passes through three stages:
   First, it is ridiculed;
   Second, it is violently opposed; and
   Third, it is accepted as self-evident.

-- Arthur Schopenhauer (1788-1860)

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