Trainee to Trader: The Road to the Trading Floor
What Does the Training Process with SMT Look Like?
At SMT, we are dedicated to producing successful commodity traders. Our paid training program has been streamlined for 50+ years to educate new traders about commodity trading and the lumber industry. During a candidate’s time in the training program, the candidate will learn every component of the office. They will dive into the logistics department first, move into the credit department, continue into the inventory and invoicing department, and conclude with the first day on the trading floor. Once a candidate has “graduated” from the training program, the candidate will partake in a sales program and weekly rookie meetings. The newly trained trader will embrace a new mentor and accountability partner. Every constituent of the training program is essential to the success of SMT’s future.
What do you learn in Logistics?
A trader’s life starts in the logistics department. Here they will begin to learn the basics. This includes terminology, proprietary computer programs, and building over-the-phone relationships. They get to see what happens after a trader makes a sale. They will see firsthand how the product moves through the system until it reaches the customer. They will begin to see fluctuation in market rates, particularly trucking, and how those correlates to supply/demand.
After a trader shows proficiency, they move to making outbound calls, negotiating rates, booking freight, and the occasional troubleshooting that comes with the job. By the end of their training in the logistics department, they will have a thorough understanding of how to fill-out order forms, follow-up with calls, industry terminology, booking loads, negotiating rates and our in-house computer program. From there, off to inventory and invoicing they go.
What do you learn in Inventory/Invoicing?
The next step in a trader’s journey is the inventory/invoicing department. Some may think that this process is unnecessary, but this gives a clear perspective of how a sales order is completed in its entirety. The trader will be trained to understand and process a sale to the customer, the payment to our vendor, and the profit that was made on the order. The trader is also trained in the processing of payment to the vendor for material or freight services. The inventory/invoicing department processes a large volume of invoices daily.
The final step in our process is Inventory management. Here at SMT, we have a variety of reload and warehouse locations in which we store inventory such as lumber, shingles, plastics, plywood, etc. Each warehouse has their own unique system of managing the inventory at their location, and it is our job to manage accurate records to maintain the inventory that we have stored in the various locations until we are ready to ship the material to our customer. Training includes receiving material, committing material to the proper sales order, shipping the order, and most important is keeping an accurate inventory count of the material.
If the trader will give full attention to the inventory/invoicing process, they will have a greater understanding of the “in depth” process of their order.
What do you learn in Credit?
The credit training portion will teach you the basics of credit and collections.
You will be taught what is needed from your customers to help expedite the processing of their application. You will have hands-on experience of working up credit files, making decisions to release orders, and the fun of interacting with your peers as you negotiate with them what credit lines are needed for their customers currently being reviewed.
In addition, you will be shown how the cash received by the company is posted and the different ways customers can submit their payments. You will also witness firsthand how we handle delinquent accounts and the types of communications that take place between the credit department and your customer to resolve unpaid balances.
Once you have learned about the world of credit, you will begin your transition to the world of trading. This portion is the most important to you (as many of the traders who have survived the credit training will tell you). In the final lessons - you will learn about how to research for new customer accounts in our customer assignment database, how to use the various tools that are available to you to help establish a solid customer base, and finally you will be given one-on-one training to prepare you for the trading floor with a list of customers to call from criteria you have chosen during your training.
What does your first day on the floor look like?
As a new trader on the floor, you better have piles and piles of research ready to go. You must be organized. Do not wait until the first day of trading to compose your research. The time you spend in traffic is when you should start preparing research for when your first day on the floor comes. Doing this will make you ready. The trading floor should be aware of who they are getting in a trader when you start. Also, Sue is extremely good when it comes to research. Utilizing her knowledge and expertise will allow you to get a step ahead.
Once you are settled in at your desk, you may find yourself afraid to make your first call because you do not want everyone to hear you make a mistake. Experienced traders encourage you to push past that fear so that they can share with you their advice on how to fix it early on. Every trader makes mistakes in the beginning, but that is what makes you a better trader in the end, the lessons learned.
Your first day will be overwhelming because everyone is on the phone, you do not know where mills are, you do not understand the lingo, you are cold calling, and everyone is selling but you have zero customers and zero sales. Be patient and be persistent. Trust the process and stay on track.
You should be making a minimum of 50-70 phone calls a day. This is a relationship business. However, it is also a numbers game. The more calls you make, the more comfortable you get on the phone, and the better you combat your customers when getting rejected. You come with better offerings, but ultimately, you get better all around. It boils down to how bad you want to succeed and how soon you want to get there. It is up to you to succeed.
You are knowledgeable of credit and inventory, now it is time to put the selling cap on. Do not get distracted on how to buy, just sell. Sell. Sell. Find the top trader and make it your goal to beat them. At SMT, we push everyone to be the best. You can make as much money as possible. SMT has the tools to make you successful, but it is up to you to go and retrieve it.
What will I gain from the sales program?
The sales program will aid in tailoring your selling abilities. At this point you will have begun trading and are starting to grasp the concept of selling in the industry. You will have built some connections and maybe even attended some shows. This sales program takes place throughout your first year as a rookie trader. In the first quarter of your sales course, you will learn the basics of how to become an experienced seller. You learn everything from “selling in The Digital Age” to how to overcome objections. In the second quarter you will learn how to sell a program and how to sell in volume. In the third quarter you will learn about the psychology of sales and human communication. In your fourth and final quarter, you will learn sales management and efficiency. Throughout this entire sales program, you will have one-on-one meetings and end reviews. Every one of our traders at SMT have participated in this sales program and are quick to mention how positive the program was for their business.
What can I expect from the rookie meetings?
The weekly rookie meetings are a bonus to SMT’s way of building a successful trader. Now that you have completed the training program and have a feel for the industry, the first step to your first rookie meeting is to create and present a business model. Once you have created a game plan for your prospective future at SMT, you will be strategically placed with a mentor and accountability partner. These two will ensure you stay on track and create a successful path for yourself. Each rookie meeting, the floor is open to any questions you may have. Whether it is about the market, rail, or product knowledge, this gives you the opportunity to fully grasp the concept. You can ask for mock cold calls or how to leave a voicemail that ensures a response.
At SMT, this is who we are. We take the time to create successful traders. We put time into your growth. We are a team at SMT. And this is what a team does, we create a game plan to win. We make sure our fourth string becomes our first string. Your wins are our wins. At SMT, we are family, and we pride ourselves in that.