Bartering Comes To Life In Business
James Harvey Stout (deceased). This material is now in the public
domain. The complete collection of Mr. Stout's writing is now at
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offers various benefits for businesspeople.
- Barter is
popular among big businesses.
is popular in international
are many ways in which we can profit from bartering.
offers various benefits for businesspeople. Those benefits are
explored in later chapters.
- It allows us to pay for many expenses without spending cash.
We will see how we can barter for specific needs, e.g.,
advertising and employee benefits.
- It attracts customers who do not have cash (or would hesitate
to spend it) but who can give us something which we can use: goods
or services or barter-club units. Store owners -- who might not
have a spare nickel -- finds that bartering makes each item on
their shelves as good as gold, because they can barter them away
in a tight-money economy. After all, money is a lousy lubricant
within an economy: it can run short in the midst of plentiful
goods (i.e., shelves and warehouses full of goods), and in the
center of eager, would-be workers (who cannot find a moneyed
employer). Our money system is worse than a failure; it is a liar,
because it makes paupers out of inventory-rich businesspeople, and
it makes lazy losers out of empty-scheduled people who want to
popular among big businesses.
- Bartering has been done by many corporations,
including Xerox, Shell Oil, Hilton, Ramada Inns, Chrysler,
National Semiconductor, Pan Am, Continental Air Lines, General
Motors, General Electric, Remington Rand, Union Carbide,
Westinghouse, McDonnell Douglas, Pepsico, Dow Chemical.
- "Sixty percent of all companies on the New York Stock Exchange
who manufacture consumer goods use barter." (Moreton Binn,
president of Atwood Richards, quoted for the first edition of this
book, in the early 1980s)
- Ten billion dollars in corporate deals were bartered in 1980.
- "At least one-half of all the large companies in America have
set up a barter division within their own company to help them
move merchandise more effectively," said M.J. McConnell, president
of Business Exchange, in 1982.
- Many deals are handled by professional barter brokers, such as
Robert J. Murley, president of Full Circle Marketing Corporation,
who described some of the trades which he has managed:
- M.J.M. owns a restaurant, a motel, apartment houses, a
ranch, a farm, hundreds of acres of land and a multi-million
dollar business -- all of which were acquired within a few
years by barter.
- D.G. owns a dozen different publications, a large
pharmaceutical firm, a large mail order firm, two printing
plants, and several other multi-million dollar businesses. All
were secured through barter.
- M.B. acquired five of the world's largest cruise ships. The
entire company, which now grosses $6 million per year, was
originally built through barter.
- Bartering allows small companies to trade with large
corporations. Some members of barter clubs are using the clubs to
band themselves together so that they have enough assets to catch
the attention of large companies; then those large companies can
pass along some of their surplus inventories through the clubs.
For example, Xerox joined a barter club (Barter Systems) to sell
$2 million worth of difficult-to-sell equipment; Xerox had tried
to barter the copiers on its own, but then found that Barter
Systems could do the job more effectively to get goods and
services in return.
is popular in international commerce.
- In the early 1980s, when the first edition of this book was
published, experts were estimating that 40 percent of all
international trade was being done on a barter basis. General
Motor has its own Motors Trading Corp., a subsidiary which
negotiates countertrades in foreign countries and then markets the
received goods, such as metals, machine tools, agricultural
products, etc. General Electric and Sears also have their own
- It avoids the problems of currency exchange. M.J. McConnell,
president of Business Exchange, says, "Countries are bartering as
a routine way of doing business today because of currency
problems. The dollar used to mean something in world currency
markets, but it's become less valuable. So have other currencies.
The trend is for countries to accept goods and products instead of
money in international trades." (Passages. September, 1978.
'Bartering: A Bird in Hand ... Is Just the Beginning," by Arthur
- It can be used for many goods. U.S. companies have traded
rice, tobacco, rye, cotton, wheat, barley, corn, and grain
sorghums for materials like aluminum, tin, asbestos, bauxite,
magnesium, and oil from other countries. One of the most
frequently bartered items is oil; for example, Iran has traded its
oil for aircraft (including U.S. F-16 fighters while the Shah was
still in power), other military equipment, entire industrial
products -- and the construction of a $2.1 billion naval base at
are many ways in which we can profit from bartering. In other
chapters, this book explains how to set up our own trades, or start a
barter club. We can also consider these possibilities for profiting
- Specialization. For example, some real-estate brokers
specialize in real-estate trades.
- Employment with a barter club. Barter clubs need people who
are skilled in management, sales, public relations, secretarial
work, etc. A salesperson might earn 50 percent commission on the
membership fee of each new member; at some clubs, the membership
fee is about $300. At one barter club, the management positions
included General Manager, Franchise Director, National Sales
Manager, Corporate Manager, and Vice President (Marketing).
- A consultant for new barter clubs. If we have had
experience in operating a barter club, we can explain the
process to people who are starting their own club.
- A consultant for people who want to barter. Some people
don't know how to do it; we can explain the ideas from this
book and from our experience.
- A consultant for businesses. In 1982, Robert C. Newman was
charging $1,500 for a one-day, one-time consultation. When the
actual exchange took place, he would charge a fee equaling the
value of 15 percent of the bartered goods or services. Newman
said, "In addition to showing you how to increase your sales,
we'll show you how to operate your expanding business at a
fraction of your current costs. We'll show you how to buy
advertising in national and regional media (television, radio,
and publications) at little or no cost. Buy printing, art,
office supplies, transportation, medical and legal services,
employee benefits, and whatever your particular business
requirements demand, again at little or no cost. Personal
requirements including vacations, cruises, dining in the finest
restaurants, entertainment, etc., are also satisfied by the
same means. Build your personal estate and enhance your
investment program in real estate, business, precious stones,
precious metals, etc. Reduce your accounts payable and personal
debt. Reduce your unwanted or excess inventory by bartering
them at full value -- or more. We'll help you pyramid your
corporate and personal wealth and reduce your debt to little or
nil -- and you'll vastly improve your standard of living in the
- Public speaking. As an expert on bartering, we can sell our
knowledge through seminars, after-dinner speeches, workshops, or
- Multiple memberships. If we join two or more clubs, we will
have to pay for the extra initiation fees and yearly dues. But we
can use the multiple membership for a profit; we would stay alert
for any shortages or needs within one club or another. For
example, if Jack needs some tires for his tractor and he can't get
them from Club A, we would use our units from Club B to buy them
from a Club B member; then we would sell them to Jack for his Club
A units (and we would charge a commission).
- Brokering. As a broker, we would set up one-to-one deals
between other people or other companies. For example, a hotel
owner might call us to trade some rooms for advertising; we would
contact a newspaper or radio station which could use the rooms for
its out-of-town visitors. Then we would set up the trade, and take
a 15% commission from both parties. One broker offers this option:
instead of receiving a 15% commission in cash, he will
accept a 30% commission in the company's goods or services, with
which he can set up his own deals; for example, instead of taking
$1,500 in cash, he would take $3,000 worth of hotel rooms.
- General contracting. As a general contractor, we would create
a large project, and then find individual contractors who would
perform aspects of the job; we would be paid in cash, but we would
pay our contractors by bartering (plus cash to cover their
cash-only expenses). This type of contracting is possible in any
project which requires more than one type of skill; for example,
home-building, home-restoring, ad campaigns, and public events
(such as a seminar series, an art or music festival, etc.).