Monthly Archives: February 2019

Common Terminology in Futures and Commodity Trading

Commodity Markets

A commodity market is a market where generic movable products are bought and sold with contracts. Examples of commodities are: corn, wheat, coffee, pork bellies, cocoa, soya beans, oats, live cattle, crude oil, natural gas, gold, silver and so on.

Contract

Buying and selling of commodities is done with contracts. These contracts state exact rules, including descriptions, quantities, unit price, and delivery times.

Trading

Trading means buying and selling contracts.

Futures trading vs Commodity trading

Commodity trading and futures trading is the same thing. When you are trading in commodities you are trading in futures.

The Commodity Exchange

Commodity exchange is a central place where the buying and selling commodities take place. The biggest commodity exchange in the world is he Chicago Board of Trade (CBOT). There are also quite few around the world.

Mini-Contracts

Trading mini-contracts is an alternative to trading standard contracts and is smaller in quantity, ranging between one-fifth and one-half the quantity of a standard contract. Mini-contracts are traded in Chicago on the MidAmerican Commodity Exchange (MidAm).

Standard Contracts

Standard sizes of futures contracts are most of them related to the specific product. Example:

– a contract of corn has 5,000 bushels

– a contract of gold has 1,000 ounces

– a contract of lumber has 160,000 board feet

Contango

Contango describe the carrying costs inherent in different price months for the same commodity. For example a commodity to be delivered in eight months has more overhead costs (due to storage price) compared with a commodity be delivered in two months.

Trading Months

Every commodity has specific trading months and is not all the same. For example: Crude oil has trading every calendar month. Soya beans have in January and every second month.

Spot Market

It is also known as the cash market in futures which means delivered and paid for “on the spot” or immediately.

The spot month is the present month.

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Drop-shipping A Great Way Of Making Money Online

Using the Internet to sell products and services to ever increasing number of net users is a good way to start your own business. If you are not taking advantage of this great opportunity you are just missing the boat! Consider this: e-commerce, contrary to popular believe, is thriving and increasing at a double digit growth rate.
Drop-shipping is an interesting concept, you might think that this is not your cup of tea; and you still prefer to work with some tangible products. In ideal scenario, probably, you want to sell a product of your choice but don’t want to carry your own stock and don’t want to handle the shipping. Is there a way of doing this? Yes,there is! It’s called Drop-shipping .
What is drop-shipping?
When a manufacturer, wholesaler, distributor or importer, after receiving an order from their retailers, individually pack and deliver the product to the customer of the retailer with retailers address as shipper, this selling technique is called drop-shipping.
Select a product to sell
Once you decided to go with drop-shipping you need to find products to sell and find drop-shipping suppliers for those products. According to the same report from Jupiter following are the most favorite categories for online shoppers: Books; by far the most popular category, after that comes clothing and shoes, music, toys, video tapes and DVDs, gift certificates, consumer electronics, accessories, videogames, bed and related items, and bath items. You should also consider that this year, total Internet sales of consumer electronics are expected to rise 32 percent to $7.5 billion, making it the fastest growing group among all retail sales categories online.
You might think that the easiest way of finding a drop-shipper is just to buy one of the numerous lists on the Internet for sale. I will recommend you to use them for number of reasons. Often, these lists are outdated or carry wrong information. Even if you find the companies through the lists, since many people use these lists, you get into fierce competition for market share not even starting to sell.
Use the following approach instead:
Online search
The first step is, naturally, to use the search engines. Using various combinations of the keywords of your product with words: manufacturer, wholesaler, drop-shipper, dealer, see if you can find the original source of the product.
If several online retailers are already selling this product, do some detective works! Check out the sites thoroughly. May be, you can find a clue, which will help you track down the supplier.
If it is an imported product go to the sites like aliexpress dropshipping websites. Locate the manufacturer and get in touch with them to find who you should contact in your country to retail sell their products. If the product is manufactured in North America, the best source to find them is Thomas register.
Trade exhibitions
You should definitely attend the trade shows related to your category of products. This is an easy way to find a number of suppliers, who might be willing to work with you.
Trade magazines
Trade journals and publications are also a good resource for finding suppliers of your products. Although, you might have to go through a sizable quantity of them before you stumble on the right supplier.
Conclusion
Drop-shipping has some inherent drawbacks too. The biggest of them is you have to totally rely on the drop-shipper to fulfill your order and get the product to your customer on time. The others are, you do not have any control over the price or availability of the product. However, a good drop-shipper cares for his reputation since his drop shipping business for sale depends on retailers like you. Thats why you have to be very careful in choosing the right drop-shipper.