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Make the Most of Every Bushel
by Sherry Lorton

Ever notice that there are some people who seem to always make better sales? They have a knack for getting the buyer to pay a few cents more, or they have sales made before everybody else at a better basis. What do they know about selling that others don’t?

To answer this question, I went to several merchants in the industry that I know to be very good sellers. They shared some interesting observations and advice about what it takes to consistently make good sales. These discussions related to selling from the standpoint of an elevator selling to an end-user or other reseller. Here is what they had to say:

“Make your objectives clear and the actions come easy.”

Clearly defining goals was at the top of each merchants list. These goals were specific in nature. First, you need to have a precise number in mind as to what basis you would be willing to sell. To do this you must have a good idea of what grain is worth in terms of basis for current and forward delivery periods. You shouldn’t have to wait for someone else to tell you what a good sell basis is, you should be the expert of your local market and know its real value. A good seller is always able to quote a basis to a potential buyer for any delivery period.

It is also important to think about the total amount of bushels you have to sell. Good sales don’t come along very often but when the opportunity arises you need to make the most of it. The key here is having a plan for selling all the bushels you intend to handle over the course of the season - not just what you own at the moment -- and structuring the sales to coincide with your logistical needs.

“Disconnect the sale from the purchase.”

Another common trait of top merchants is that they take a broad view of selling. Most people think of selling in terms of reselling something you already own -- you buy a bushel of grain, sell it and make a margin. But these sellers I spoke with were not so much focused on selling a position but were more interested in capturing a good basis for a particular delivery period.

For them the point of selling is to secure an attractive sell basis. Only after the sale is made do they consider where the bushels will come from, and this may change depending upon what the basis is at the time of delivery. The bushels may come out of inventory, be delivered direct off-the-farm or moved from another source. There are a lot of possibilities but it all starts with making a good sale. Mentally disconnecting the sale from the purchase keeps your mind open to explore different alternatives.

“What you spend your time doing has a direct impact on your results.”

Merchants that routinely make the best sales also share a passion for selling. They are proactive in their selling efforts and spend a good portion of their time on activities that will produce good sales. They monitor the basis every day, talk with buyers, identify their needs and develop relationships with them. They make sure potential buyers know that they are a good source of grain year-round and can personalize sales to meet their individual needs. These actions are what earn them premium bids.

Elevator managers have to wear a lot of different hats and it is not unusual for selling activities to take a back seat to the pressing issues of the elevator’s daily operations. But, it is selling where the margins are made. Successful merchants recognize the impact sales have on the bottom line and make it a priority in their business.

The short-sighted merchant looks at his position and says “I am long-the-basis 300,000 bushels of corn and will sell it when I can make a 30¢ margin.” In doing so, he gives little thought to the additional bushels he will purchase in the weeks and months to come.

The big-picture seller considers his total needs and says “I have a million bushels to sell over the course of the year and will make sales at +10 for any delivery period. Margins will vary depending on when the bushels are bought but, nevertheless, a million bushels has to be sold and it’s my job to secure a good sell basis on every bushel.”
It’s all in the way you look at it.

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