How Greed Can Cloud Common Sense in International Trade and Exporting

Over the years, I have vivid memories of numerous interactions with charlatans who wanted to get in the business of trading big deals. Greed often clouds common sense in interational trade and exporting.

Sometimes the allure of easy money targets the commodities of sugar and cement. However, I haven’t seen a single successful transaction involving huge sugar or cement deals. But, the fantasy of making big money keeps these supposed deals alive.

The Anatomy of a Trade Deal

Usually, the proposed deal involves a string of middlemen, each claiming to have direct contact with an authentic buyer or seller. Moreover, the middleman’s expertise is usually in an unrelated industry such as real estate or automobile sales.

The alleged buyer offers to provide a letter of credit, designated as "transferable, divisible and assignable." These descriptions are usually dead giveaways of a nonexistent transaction. Although I handle these calls politely, my eyes glaze over because the story always sounds the same, and I know the poor guy in the middle will lose money and time chasing these nonexistent deals.

I remember a call from a gentleman in a remote mountain location in Colorado. I had previously met him and remembered him as a reasonably successful manufacturer’s rep.

"Roy, have you heard the British intend to build a tunnel to France?" he asked. The rep realized the British would need a lot of cement, and he claimed that Saudi Arabia had huge quantities available. He requested my assistance in his effort to buy cement from Saudi Arabia and sell it to Great Britain, making millions of dollars in the process.

Having heard the details of the scheme, complete with how much fee income my bank would earn, I asked an obvious question: “Wouldn’t the British know where to find the cement and how to buy it? Why would they need help from someone remotely located in Colorado?”

“I hadn’t thought about that before,” he said to my surprise. He agreed the plan would probably be futile to pursue.

The English Channel tunnel was built many years ago, but the Colorado man who considered making fast money by brokering cement remains a valuable lesson in international trade and exporting:

Always know who you’re dealing with, and stay within your core competencies.