Bartering Can Increase Our Sales Volume
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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helps us to sell more goods and services.
businesspeople say that bartering attracts customers.
might attract too many customers who want to barter.
barterers do not attract new customers.
helps us to sell more goods and services. It does this in various
- It attracts customers. Whether we use a barter club or
one-to-one deals, we might get these types of customers:
- Customers who could not afford our goods or services if
they had to pay cash.
- Customers who could afford our goods or services, but they
would rather barter, so they come to us instead of going to our
competitors who do not barter.
- It allows us to do more advertising.
- We can barter for advertising. In the chapter
regarding "bartering for advertising," we see that we can
acquire ads from many sources without cash.
- With the money we save by bartering for our other needs, we
can afford to pay advertisers who must be paid in cash. In the
early 1980s, the Mattel toy company had $12 million worth of
electronic games which were stagnating in its warehouses. When
Mattel asked Deerfield Communications Corporation to take the
games, Deerfield paid $5.5 million in cash plus $6.3 million in
barter-units. Those units would be spent to advertise Mattel's
- We can use the special programs which are offered by some
- National or international territories. If we join a
nationwide or worldwide barter club, we can receive orders from
any city which has a franchise of that club. When members from
those other cities visit our city, they will know about
us because we are listed in the club's directory.
- Affiliations. Usually, we can spend units only within our
own club. But some clubs create affiliations with other clubs,
so that we can spend our units in the businesses of those other
- "Trade fairs." Some barter clubs conduct trade fairs, where
members can exhibit their wares. Trade fairs are particularly
popular among non-profit barter clubs.
- We can use barter brokers. These brokers will find the goods
and services which we need -- and then either (1) arrange a
one-to-one deal between us and another company, or (2) trade
directly with us from their own inventory.
businesspeople say that bartering attracts customers.
- The co-owner of a health club said, "We get people who
probably wouldn't spend the money to join for cash. We've had some
real big- ticket items -- memberships, pro shop purchases, and
restaurant bills -- on barter." (Irvine World News. "This
Orange County Resident Runs a Different Kind of Trade School.'' by
- Charles and Diana Marr got $5,000 worth of orthodontics for
their son by earning units through Charles' appliance store and
Diana's telephone-answering service. "We drove all the way from
North Hollywood to Santa Monica to deal with the orthodontist,"
Ms. Marr said. "We wouldn't have driven that far normally, but he
was a member. The same thing happens to us; you've got people
outside your own community who'll do business with you."
(Moneysworth, Feb. 14, 1977. "Work-Swap Firm Swings.")
- When Hanson Galleries, a wood-specialities store in Houston,
was getting $1,000 worth of barter business each month, it opened
a second store, using $12,000 worth of the club's units to pay for
the office furnishings and supplies.
- In one of its ads, Business Exchange lists its "Century Club"
members, who have had over $100,000 worth of trades. The list
includes a jeweler, dentist, attorney, a tire store, a few
clothing stores, and other businesses. Some of the Business
Exchange members reported their successes:
- "Thanks for the new profits. As we work on about a 40
percent margin, the $70,000 in new sales has meant $30,000 in
new profits. We recommend it highly."
- A towing service reported: "I notice that it has been just
four years since we signed up with you people. And we just
passed the $10,000 mark. That's a lot of extra income for any
- "Business Exchange helps fill vacancies," said Gamma
News (the official publication of the California Apartment
and Motel Management Association).
- In the San Francisco Chronicle, a member said that
his membership "has really helped me. I get business from
people who never heard of me before, because they checked the
[barter-club] directory ..."
might attract too many customers who want to barter. Bartering will
not pay for all of our expenses. If we know how much cash we need
each month, we can set a limit on the amount of bartering so that we
are still receiving enough cash. (Refer to the section regarding
"controlling our balance of cash and barter" in the chapter regarding
- We can have a variable policy. Depending upon our cash
situation at any moment, we might have to say: "Sorry, I'm low on
cash right now, so I can't barter with you." We might be less
willing to barter during our peak season, when we have plenty of
- We can set a limit based on a percentage of gross. Some
experts say that we should limit our barter-income to about 10% to
15% of gross -- but this would depend on our ability to barter for
the goods and services which we require (so that we don't need as
- We can set a limit based on the number of barter-club units.
For example, we might decide that we do not want to have more than
$1,000 worth of units in our account at any one time. When we
reach that limit, we can refuse to make further sales to other
members until we have spent enough of those units to reduce our
account to less than $1,000.
- We can convert our excess units into cash.
- We can sell some of the units to the club's management.
Some clubs will not buy units from their members; others will
buy them -- but at a reduced price (perhaps 70 cents on the
dollar, which would still be profitable if we acquire our
merchandise at less than 70 cents on the dollar, or if
we provide a service rather than merchandise).
- We can sell some of the units to other members. Again, we
might have to sell them at a reduced price -- perhaps 70 cents
on the dollar.
- We can spend the units on goods and services which we can
re-sell. For example, if a friend needs a new lawnmower, we
would use our surplus units to buy it from a club member, and
then we would sell it to our friend for cash.
barterers do not attract new customers. Some of the possible reasons:
- Problems with the barter club.
- Not enough members. For example, if there are only 20
members, we might not have enough barter-income to justify the
fixed expenses, e.g., our annual dues.
- Too many other members who offer the same goods and
services which we offer. Many clubs limit the number of members
within any field, e.g., computer sales.
- No publicity for the members. The club might not have a
directory or any other easy way by which the other members can
- Lack of negotiating skills. If we are conducting one-to-one
deals, we need to know how to bargain. (Refer to the chapter
regarding "how to barter.")