In order to thrive within your respective industry, it’s essential to establish a mutually beneficial relationship with your supplier. When striking up a deal, it’s important to appreciate there’s always room to negotiate favorable terms.

Many gold buyers choose to source gold from low-cost countries like Ghana and other African countries, where the price of the gold you’re buying is rarely a concern. However, have you ever considered negotiating payment terms?

If not, you could be disadvantaging yourself through a simple lack of awareness of options. Though the seller has the ultimate say, that doesn’t mean to say there won’t be wiggle room to get better value on your deal.

Some opt for a 30:40:30 configuration, paying gold sellers in instalments after particular terms are met; 30% after preliminary assay report 40% upon shipping and 30% after the final assay report at buyer’s destination. This type of arrangement will offer you peace of mind that can easily be achieved via clear communication.

Ultimately, your gold seller will be relying on your custom, so will do everything within their power to satisfy your requirements. If you negotiate payment terms, you’ll indicate to sellers that you’re prepared and well-equipped to build a fruitful relationship.

You should highlight your expectation so your seller can plan accordingly. You’ll want to prove your readiness to engage with the sourcing project via the willingness and professionalism shown through negotiation.

Mutually beneficial payments terms will protect both parties from financial risk, cashflow implications, and provide leverage if problems emerge. Negotiations are based around choice of payment method and timing of payment, which should be agreed in advance. By doing so, you’ll avoid complications that can arise if there are delays.

Now, let’s break down some useful tips you can leverage to broker favourable payment terms:

Negotiating Different Terms for Sample, Trial Runs, and Large Purchase

It’s important to negotiate different terms depending on the nature of your purchase. When you’re exercising a sample run, you should consider putting 50% down and paying the rest if the sample is approved. The nature of this arrangement involves the gold seller taking most of the risk, investing time and effort on a new customer where a deal may never come to fruition.

If you are happy with the gold sample and decide to engage in a trial run, you can safeguard your investment by paying less upfront. For example, a typical structure of 30% down after preliminary assay report and the rest paid upon shipment is common to ensure you don’t take on as much risk. For large purchase, the 30:40:30 arrangement is a great configuration for payment or 50:50 in some case. By doing so, both parties will be protected,

Having paid 70% or 50% of the total purchase before you’ve received your gold, the seller will be incentivized to stay on their toes. After all, they’ll need to remain vigilant and ensure they continue to uphold standards process to receive the final payment.

If your seller insists on receiving payment in full prior to shipment, make sure your gold have been fully inspected, tested and meet your requirement.

Win By Negotiating Favorable Payment Terms

As a gold buyer, negotiating favorable terms is definitely worth the time and effort, especially when you consider the following positive implications:

Risk Protection

By paying less upfront, you’ll reduce the risk of things going wrong later down the line. Protecting yourself from risk is a prudent business strategy that will pay off in the long run, because you can never predict the outcome of a given situation.

Leverage

Agreeing to pay your final installment after final assay report at your destinationat gives you significant leverage. By doing so, you’ll gain control over the arrangement, since it will be in the seller’s best interest to ensure the gold they ship matches your expectations. If it doesn’t, they won’t receive the final part of their payment.

This type of leverage is a big reason for never paying 100% upfront.

The Three B’s

Establishing a mutually beneficial arrangement with your seller involves building a solid relationship with them. To obtain their trust, you should capitalize on the three B’s:

Be Upfront

With all due respect, when it comes to anything to do with your business, you should exude confidence and take command of every situation. No one knows your business like you, especially if you’ve done research. You’re more likely to know the price point of your gold, implications on paying100% upfront etc, so you’ll appreciate the type of payment terms you’ll need to maximize efficiency.

With that being said, when you buy gold from Africa, you should put yourself in the driver’s seat and be upfront about what you need. By doing so, your seller can work on meeting your terms.

Being upfront will avoid the inconvenience of deals falling through, which can be a nightmare for both. Being upfront is often the best way to build trust with your seller, because they’ll know what’s required of them and realise you won’t mess them about later down the line.

Be Flexible

If you’re looking to buy gold from Africa, you should be flexible with payment terms to increase the chances of receiving a discount on your purchase. You’ll be surprised by what you can achieve by adopting this approach.

For example, you could offer to pay a larger down payment in exchange for a discount on your purchase. This will offer a great incentive for your seller to reduce their price, where they’ll be motivated by reduced risk and the prospect of having more cash in hand.

A flexible approach will help you negotiate more competitive pricing, which will help you secure a larger market share over time. By gaining your seller’s trust in situations like this, you’ll establish a win-win scenario and gain more flexibility with them. If in future you require a special arrangement, they’ll be more receptive to your needs if you want to renegotiate different terms.

Be Patient

Building trust with a gold seller in Africa can take a different approach, depending on the native origin of your seller. For example, trust is built differently in Africa than in other countries, where cultural differences often arise.

With this being said, it’s important to exercise patience and try to understand the culture of the country you’re doing business with You should consider embracing positive actions over a prolonged period.

After all, actions speak louder than words, so if you negotiate in ways that benefit your seller, you’re more likely to receive their trust. This can take time, so patience is often required.

When communicating with your seller, you should give the impression you care about how the outcome of the deal. Offer feedback in a courteous manner, communicate your expectations clearly, pay on time, and always be a man of your word. By adopting this approach, you’ll earn the trust of your potential seller and build a successful relationship.

Buy Gold From Local Miners With Iszy Gold

Building trust is no easy task, but your path to building a successful relationship can be made significantly easier by working with a gold sourcing agent like Iszy Gold. Our main ambition is to help gold buyers successfully buy gold from Africa in a cost-effective way, where we leverage credible relationships to add value to your business.

At Iszy Gold you’ll receive a one-stop, risk-mitigating solution to sourcing gold from Africa, one that safeguards your best interests, prioritizing sourcing, inspection, purchasing, and shipment.