Two days ago, a friend came to visit me.
He runs a niche commodity trading firm as a side business. It’s been about 18 months now, and in the first full year he made around 20k profit.
For a small, side trading operation?
That’s actually not bad.
He’s enrolled in all our programs at Shipping & Commodity Academy, and he asked me a question that stuck in my head for two days:
“Damien, what do you wish you had known when you started your own commodity trading firms?”
On the spot, my answer was… meh.
But the question kept looping in my head, and I ended up filling pages of notes.
So here it is — 9 things I truly wish I had known before starting my firms.
1. Understand the Game You’re Actually Playing
Not all trades are the same.
You’re not “just trading commodities”.
You’re playing a specific game, with its own rules and dominant risk.
A few examples:
- Black Sea grains:
You’re in the speculation game.
All the big houses are there. They take positions, they hedge, they speculate. To compete, you need to take positions too. No speculation = no volume. - Sourcing crude from South America:
You’re likely in the relationship / bribery game.
I’ve never done it personally, but you can imagine: access to the barrels is controlled. Without “arrangements”, you probably don’t even get to the table. - Foodstuffs into West Africa (my early days):
Sugar, cocoa, milk powder, palm oil.
Here you’re playing the financing game.
Your clients don’t have good banking lines. Or if they do, it’s expensive and tiny. If you want to grow, you need to take credit risk on clients. That requires equity and guts. - Chromite / chrome ore (what we do in Chromatic Dragon):
Here, the dominant game is quality and logistics control.
Are you actually loading the material you paid for? Are you being scammed? Is the quality in spec? Are your logistics air-tight?
So ask yourself:
What game am I playing?
- Is it a financing game?
- A quality control game?
- A speculation game?
- A relationship/bribery game?
- Or a messy mix, with one dominant risk?
If you prefer, replace the word game with risk:
What is the main risk I am getting paid to carry?
Once you name it, everything becomes clearer:
what skills you need, who you should hire, what systems to build, and where you absolutely cannot be naive.
2. Business Development vs Trading (Know Your Type)
Most people say they “trade”.
In reality, many of us are doing business development.
Business development means:
- Finding new buyers
- Finding new suppliers
- Finding new logistics solutions
- Finding new financing structures
- Assembling a completely new trade flow from scratch
That’s what I love. I’m honestly one of the best in the world at this part: taking nothing, and building a flow that can run for years.
Trading, on the other hand, starts after you’ve built that:
- You already have a portfolio of clients and suppliers
- You know the logistics bottlenecks
- You have financing in place
- You know typical problems and how to fix them
At that point, your job is not to invent new flows every day.
Your job is to optimize the portfolio: pricing, timing, risk, margin.
That’s where the big, predictable money is.
And here’s my confession:
I get bored. After 2–3 years of managing the same flow, I’m mentally done. That’s one reason I now run multiple companies, educational projects, etc.
In big trading houses, these are two different roles:
- The business developers / originators: they open new doors, build new flows.
- The traders / relationship managers: they manage and optimize those flows long term.
When you’re small, you do it all.
But know which one you are naturally good at, and don’t lie to yourself:
- Starting new things gives you a rush (BD).
- Optimizing existing flows makes you rich (trading).
Ideally, you build a business that lets you do one, and hire for the other.
3. A “Lack of Funding” Is Usually a Lack of Skill
I hear it all the time:
“Damien, I have a great deal, but nobody wants to finance it.”
Brutal truth:
A lack of funding is usually a lack of skills.
There is plenty of money in the world.
Funds, banks, trading houses, family offices, private lenders — they all exist to deploy capital against risk.
Your job is to:
- Structure a deal so the risk is understandable and acceptable.
- Match the right deal with the right financier.
What people usually do instead:
- They bring terrible structures
- “We prepay a supplier in a war-torn country…”
- “…and then also finance the buyer in another risky country…”
- “…and we have zero collateral, but trust me bro, it’s a great deal.”
No serious financier touches that.
The only person who might do it is you with your own money.
On top of that, beginners don’t know who to talk to, depending on their stage:
- Stage 0 – No capital, no balance sheet
You try back-to-back trades (no inventory risk) or do deals where a larger trading firm takes the main risk and shares profit. - Stage 1 – Some equity (you can put 20–30% in)
You can now approach trade finance funds / banks that will lend against collateral (goods, receivables), with you putting skin in the game. - Stage 2 – Developed client base in decent countries
You can add credit insurance, factoring, structured facilities, etc.
If you don’t know these tools, it looks like “no funding available”.
In reality, it’s you who still needs to level up.
4. If It Doesn’t Kill the Company, Chill
I lost so many nights of sleep in the early years.
Stress, anxiety, health issues — all because of problems that, in hindsight, were just normal business issues.
Delays.
Short payments.
Small losses.
Angry emails.
Disputes.
Now, my rule is simple:
If it won’t kill the company, relax.
That doesn’t mean you ignore problems.
You deal with them. You learn.
But you don’t destroy your health over them.
Stress doesn’t solve anything.
Thinking clearly does.
Worry only about things that truly threaten the survival of the company — and even then, keep your head cold.
5. Focus Is Your Biggest Superpower
This one is massive, and it’s where most beginners fail.
You must focus:
- on one geography, or
- on one niche product, or
- on one specific type of flow.
What most rookies do:
- 2 months on palm oil → “Too hard.”
- 1 month on sugar → “Too many scammers.”
- Then rice, then charcoal, then copper scrap, then gold, then fuel…
Every time you switch, you reset your progress to zero.
To close a deal, you need:
- Enough skill
- Enough belief
- Enough network & trust
These compound in a specific niche.
If you keep jumping, nothing has time to compound.
If you want to take regional risk, fine — then maybe you trade multiple products into the same region (because your edge is local knowledge).
Or you stick to one product and go global with it.
But don’t try to “do everything”.
The market punishes generalists without a moat.
6. You Only Need One Good Client
Commodity trading is relationship-based international trade.
It’s not just price and payment terms.
It’s: “Who am I really dealing with?”
Over time, everyone’s roughly at the same price.
Everyone offers similar payment terms.
What’s left?
Trust.
- Will this counterparty be there when there’s a problem?
- Will they try to fix it, or disappear and say “not my issue”?
That’s why I say:
You can build a whole business on one good client.
I know SMEs doing hundreds of millions of turnover with three key clients that basically pay for everything. The rest is “extra”.
I still have old buyers in West Africa I can call and say:
“I have a container of fat-filled milk powder. You want it?”
If the product checks out, they’ll buy.
Because we have history.
So:
- Protect relationships.
- Don’t be cheap or petty.
- If you need to lose some money to keep a key relationship, do it.
- Think in terms of lifetime value, not one deal.
In this game, the lifetime value of a client can be infinite.
7. Once You Know Your Stuff, Go Bigger and Bolder
Important nuance:
- If you go big and bold too early, you will expose your ignorance and look ridiculous.
- But once you know what you’re doing, staying small is just fear.
Once you’ve:
- Mastered your product
- Built relationships
- Closed smaller deals
- Understood the logistics and risks
Then it’s time to scale up:
- Larger volumes
- Longer contracts
- Bigger clients
- Deeper commitments
You don’t get rich by staying at “tiny side deal” level forever.
But timing matters:
First competence, then courage.
8. Karma Is Very, Very Real
This one sounds metaphysical, but I’ve seen it so many times that I treat it as a law.
Do good, consistently, and:
- Opportunities appear from nowhere
- People help you when you’re in trouble
- Doors open that you didn’t even knock on
My first boss, Vanessa, was my mentor.
She was always helping everyone — even competitors.
I used to tell her:
“Why are you helping this guy? He’s competition. Let him drown.”
She’d just smile and say:
“Damien, you’re young. You don’t understand yet. You always do good. It always comes back.”
And she was right.
Years later, when she was in difficult situations, people went out of their way to help her. She had accumulated so much goodwill that reality bent in her favor.
I try to operate the same way.
Recently, I flew to Singapore just to introduce two people I knew could do great business together. No commission, no deal for me. Just connecting them.
What do I gain now? Nothing.
What will it do for me long-term? A lot.
It works in reverse too.
There’s a trader I know who’s… let’s say, not a good person. Always selfish, never helpful. I had a major opportunity that he could have done.
Did I call him? No.
I called someone else — someone competent and decent.
Here’s the point:
- When you’re an ass, opportunities quietly disappear.
- You don’t even know what you’re missing.
- On a long time horizon, your life gets worse and worse.
Karma exists in business.
It’s not magic — it’s just the compounding effect of reputation and behavior.
9. Everything Starts In Your Mind
Final point. The most “woo-woo”, but maybe the most important.
If you don’t believe it’s possible, you will never even try.
I know people:
- who worked in trading firms,
- who had contacts,
- who had potential financiers ready,
- who talked for years about “starting on their own”…
…and never did.
Why?
Fear, yes.
But beneath that: they don’t really believe in themselves.
When you attempt something difficult, you need a strong internal belief, almost a delusion:
“This is going to work. I will make it work.”
That belief leaks into:
- how you talk
- how you negotiate
- how you pitch
- how you handle problems
Other people feel it.
They lend you their belief when yours is strong.
Can you train belief? I don’t have a neat framework for that.
But I know one thing:
If you don’t believe in what you’re doing, nobody else will.
And nothing big will ever happen.
Closing Thoughts
If I had to summarize what I wish I’d known when I started my firms:
- Know the game you’re playing — quality, finance, speculation, relationships.
- Separate business development from trading — and know which one you’re good at.
- Funding problems are usually skill problems.
- If it won’t kill the company, relax.
- Focus on one geography/product until you’re dangerous.
- One good client can change your life.
- Once competent, go bigger and bolder.
- Karma compounds — in both directions.
- Your belief is the ceiling of your results.
If you want to enter this world of physical commodity trading, learn properly, and maybe one day build your own niche firm, you can check out Shipping & Commodity Academy.
Some of our students now work for the biggest trading houses in the world.
Others run their own trading companies.
You might be next.
Ciao.