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How to Start a Crude Oil Brokerage Company – Sample Business Plan Template

Have you been looking for a way to tap into the ever-lucrative oil and gas industry? Have you been misled into thinking that the oil and gas business is solely for big money players? Well, the truth is that, you can venture into the oil and gas industry with little or even zero capital. And that’s by starting a crude oil brokerage business.

Crude oil brokerage is very lucrative, as it offers a high and fast income earning potential. In fact, it is the best opportunity for a beginning wealth builder to start a petroleum products marketing business without capital investment. I guess you are now wondering how that is possible. Read on to learn more about what the crude oil brokerage business entails, and the steps involved in starting the business.

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Crude oil brokerage simply involves scouting for buyers and end users of crude oil products on behalf of one or more major independent petroleum products marketers that you have already established a sales contract with. (Call it the offline version of affiliate marketing and you would be right).

For example, if you are able to connect a buyer who needs 30,000 liters of AGO or DPK with a marketer who has agreed to pay you a commission of 50k per liter, you will earn N15,000 from that deal alone. This way, you can make money without investing anything except the time spent in scouting for buyers. The more companies you have deals with, and the more customers you can attract, the more profit you will make every month.

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However, you must bear in mind that the business goes far beyond the description above, as there are certain intricacies and trade secrets that are known only to Veterans in the business. This article will only explain the basics that you need to understand about the business. You will have to learn the rest on your own or on-the-job.

With the above in mind, let’s now look at the steps involved in starting a crude oil brokerage business.

Starting a Crude Oil Brokerage Company – Sample Business Plan Template

1. Learn the basics of the business

The first step you should take is to learn the various terminologies used in the crude oil trade. The following are some of the most commonly used terms and their meanings:

  • FOB (Free on Board)

This classic maritime sales term means that the seller must load the goods on board the ship nominated by the buyer. The costs of clearing the goods for transportation or export are shouldered by the seller.

  • TTO (Tanker-Take-Over)

This is a situation where a buyer takes over the hiring of a loaded tanker along with the product it contains.

  • TTT (Tanker-to-Tanker Transfer)

This refers to a situation where the buyer hires his own vessel and uses the same to purchase products from the seller.

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These terms describe the various forms of delivery arrangements between buyers and sellers of petroleum products. There are still many other terms used in the trade, which you will have to learn before proceeding into real business.

2. Connect with genuine oil marketers

After having understood the terminologies used among oil marketers and sellers, you will need to find genuine oil marketers with mouth-watering sales deals. You can search the web for reputable major oil marketers around you. Once you find their contacts, you can proceed to call them on phone or send them an email to inquire whether they work with brokers and how much commissions they offer, if they do.

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3. Search for buyers

Once you have found oil marketers that you can work with, you will start searching for buyers. You can approach big consumers of petroleum products and offer to link them up with your marketer. Most consumers will be reluctant to buy through you at first, but you can lure them into doing that by offering a slightly lower price than what their current oil suppliers are offering.

Convincing sellers to buy from the marketer you are promoting is not an easy task, as most consumers are skeptical. But if you are able to land a number of large-scale consumers, you could become rich overnight.

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Once again, never feel tempted to take a plunge into the crude oil brokerage business without taking your time to learn more about all that it entails. This is very important, especially if you intend going into the business for the long term. There is much more to learn about this business than the information you have learned in this post.

With hard work, diligence, and proper implementation of working market tactics, you will start raking huge profits soon after starting your crude oil brokerage business. And that might just be your gateway into bigger oil businesses.