Discover the secret of Making money from agro commodity trading

There are different agro produces in the country that  one can go into marketing especially for companies that have used them as raw materials. These agro produces are Corn (maize), Sorghum , Guniean Corn , Soya beans , Wheat , Millet , Cotton seed and several other. What I have mention here  is mostly grains.

There are several ways to make money from agro commodities especially if it involves supplies:

Broker: One can visit companies that are involve in production that have need for these agro produces and sources LPO( Local Purchase Order)  from them. Now you bargain with companies or individuals that can supply the order and get commission from them. Usually these commission is always consider on the number of tons , how frequent the supply will be needed and the payment method. For example , if a company need say 100tons of corn at a certain price, you can strike a deal with a supplier to take N1,000 per ton and that amount to making N100,000 as a broker with no risk on your side .

 Supplier:  One can decide to supply the company directly and make money.

Before you venture into supplying of grains directly that certain things that you must be aware, so that you don’t loses your investment.

1.     Term of payment: what is the terms of payment of theses companies that you want to supply,  some companies pay after 24 hours, 48 hours , 7 days, 2 weeks and even 45 days .Note that Companies that pay from 2weeks must have a slight higher price.

for example if   company A is buying corn for say N60,000 per ton and pays after deliver 24hours, Company B must pay at least N63,000 per ton if payment is after 2weeks or 45days .

2.     Offloading & Scaling  : Most companies(if not all) won’t tell you that you will pay for offloading and Scaling  the goods that you bought if you are venturing into the business for the first time.

3.     Discount: there are companies that charge 1% to 10% of the amount supply  as tax , again most of them won’t tell you except you have an insider that gives you the hints before time.

4.     History of the Company: it is important that you also do background check on the company that you are supplying, how do the treat their suppliers ? what other relevant information do you need? These will help in determining if it is worth your time and investment.        

Part B of this article will on the Mathematics of supply