Ludovic Vuillier from LiveRates Feeds
It’s been 3 months since we’ve unveiled the tradable diamond index. I feel as though I’ve lived a lifetime during these three months. Calls have been had with so many different types of financial institutions – from small new WL, to large international banks. I admit that when I first started I thought it was the small brokers who would show the most interest in the beginning and that only later the large institutions, the financial behemoths, would join. I feel blessed to see that it is not so. From day one, everyone has shown an interest including the biggest of the big.
As anyone who knows me knows, my background is sales and negotiations. An age old habit I have is to write down every objection that comes my way and then to figure out a thousand and one ways to answer it.
Some of the objections forced us to become better and I am thankful for them. Other objections taught me more about the way many people see the industry and for that too I am thankful as it allowed me to better work on the offering and its presentation.
The first companies I contacted were the smaller brokers. Here are the things I heard from them and how we dealt with it.
Objection: Your fees are too high.
Answer: Really? 30 USD per Million for a brand new exotic. Again let’s compare if we must. Go to a liquidity provider and ask them for the cost of the EURUSD. You may be able to get it down to 10 USD/ Million if you do a lot of volume. May. But here’s the kicker. The cost for the EURUSD has to be low. Because there are MANY LPs for it, so they have plenty of competition and so do you as a broker. Meaning they need to keep the price low enough for you to be able to tack on your margin and still be competitive. So again comparing apples to cars.
Objection: It’s not yet popular.
Answer: Of course it isn’t. This has not existed until NOW. Early adopters are the ones who benefit the most from anything new. Take for example the ones who got bitcoins for just a few cents when it first came out.
Without having to wait until it reached it’s high of $2700 they still made a killing. A friend of mine bought 10 bitcoins when they were about $10 each and sold them over the years for a profit of close to $13,000. Look at the FX brokers who started when FX was still new to retail. It was easier for them to expand and continue to grow compared to new brokers who have to fight harder to get a piece of the market.
Objection: The spread is too big.
Answer: It is an exotic. If you’re going to compare it to the EURUSD then that is like comparing an apple to a car. There is no comparison. Let’s use another commodity as an example. A well known commodity whose daily trading volume is around 250 BIL USD. Gold. The spread on gold changes throughout the day as we move from one session to another (from Tokyo to London to New York. Do you know what the spread is for the XAUUSD? Based on what’s going on in the market it goes from 1 pip all the way up to 44 pips. And that is with 250 BIL USD traded every single day!
When I spoke with the larger institutions these objections never came up. On the one hand I was relieved of this since it showed me that the institutions with decades of experience in the field saw that we built something good, with a lot of potential and at a very good price. The objections I got from them forced us to build something better.
Their one and only objection was regarding the Clearing and Settlement. Larger institutions requested that we outsource that to a specialized entity in a very well regulated jurisdiction. And we did just that. It took us time but we did it.
Two things that everyone asked us with more or less concern was:
1) How easy it is to connect?
So let me reassure you – it is seamless. As they say in the movies, get your (tech) guys talk to my (tech) guys and they’ll see we’ve made the process seamless.
2) My sales team won’t know how to promote it.
That’s why we offer our help. For years I was a sales advisor to companies. I still am. I’m still a partner in call centers, some of them related to the industry. I will help your sales teams learn how to promote this to their clients. You will receive my help with this.
It has been one heck of an experience. In these three months I have learned so much and it was incredible! I’ve shared with you some of the objections and answers/ solutions.
Now let me share with you why you should add the IDXUSD to your offering:
- Because it’s something new with a lot of potential
- It’s an untapped market that will only grow with time
- As with everything, it’s the ones who take it on early that will get the most market share
- The big financial institutions are adding it, are you sure you want to let them have more of an edge
than they already have?
- It’s built for you to customize the offering to your needs
- An entire ecosystem is being built around it
- One day in the not too far off distance, clients will ask you if you have it and if you don’t – your competitors will have the advantage.
- Do you really want to give your competitors an advantage that is so easy to mitigate?