How would you like to fill up some un-booked dates or get some value for products that are excess, unsellable merchandise?
Maybe you would like to start using your products/services to help you build for the future?
Barter is one of the best ways that you can leverage your business/offering for what you want. In a world where “Cash is King” unless you are doing all the business that you can possibly do, you should look at potential different ways of gaining new business and get some value as opposed to none. Look at it this way, by offering to do barter, you may be able to build more name recognition and still get a benefit from it. There are particular benefits to using barter, as using barter can be another way to market your business. If you have been following me, I am all about the marketing of your business, as nothing will happen until your marketing works.
Here are 5 fantastic different methods of using Barter to enhance yourself and your business.
1. Direct trade. This is a transactional situation. You give “x” and then receive “y”. You give your “stuff” for the “stuff” you want with the person providing the stuff you want. Let’s say you are a florist and you need a DJ for one of your kid’s birthday parties. You find a DJ who is willing to do direct trade and will take $1000 worth of flowers for them DJ’ing your kids party. This type of trade requires you ask people who sometimes, well, don’t think outside of the box. They are used to cash/ immediate payoff in traditional monetary measurements. When you use this type of trade, you are availing yourself to basically getting the stuff you want at your rate of wholesale. If you have a 50% margin in your product/service and you barter away dollar for dollar your product/service towards something you want, the cost involved is what your cost is –your margin- and you are able to get stuff at a substantial discount.
2. Partial trade. This is where you barter away your “stuff”, for partial trade + cash. This is a great way to trade away only your margin and pay for your “hard costs”. This is a great way to get some business and not have it cost you cash, green dollar bills. (Remember- Cash is King). If you have 40% “hard-costs” on your stuff and you can get that 40% in cash and trade out the other 60% of your profit towards the “stuff” that you want/need. The temptation to inflate your hard costs may be there, but be fair about things. Once had a hotel double their rack rate to do trade with me. They rarely got their rack rate, and then to try to double it was simply not fair, and it was a rip off. Fact is, at midnight each night, their empty hotel rooms would have a value of absolutely zero and very few hotels have a 100% occupancy rate. Needless to say, I didn’t do business with them.
3. Associated trade. This is where you trade in an association or a third party group that brings together many different businesses and you trade into a bank. You sell your “stuff” to someone who wants to buy your stuff, but you don’t necessarily want their stuff. You may want an accountant or a restaurant that may be on the trade group list. These groups usually charge a brokerage fee of 10% cash. You need to be careful that you don’t spend your money on all fun stuff as they do report to the IRS and you will be taxed for the trade you do as though it were cash. Many times with these groups, you can buy advertising for your business which , depending on what the advertising is, is something you want to look at (you trade out for your advertising which brings in cash customers).
4. Conjoined trade. This is where you mix your products/services with other products/services to trade together (either partial trade or full trade). Again, this is a little trickier, but we’re thinking outside of the box here~! I once saw a DJ, a photographer, a Videographer and a caterer come together to trade a man for his boat in exchange for them providing their services for his daughter’s wedding. Just knowing that a trade of this manner can happen, will allow you to open yourself to it if it is possible. I once put together a trade of services for promotion where we collectively received $75,000 in advertising for giving away a $25,000 wedding. There were limited hard costs and it was a Thursday wedding, so none of the vendors had to turn away business. Conjoined trade can really have some power, but you need to cross your “t’s” and dot your “i’s” to make sure everything works well.
5. Investment trade. This is where you invest your services with no expectation of getting an immediate payoff, but instead getting referrals and building relationships which will pay off for years to come. I regularly suggest that one of the best ways to build relationships is to help the other person to do their jobs easier and make them a hero. If you are a DJ, offer to DJ the annual Christmas party for free for the big reception venue, if you are a photographer, offer to come and take head shots of people at the next wedding professionals meeting, if you are a videographer, get to the venue early or arrange to go the night before and put together a promotional DVD. There are multitudes of ways you can help your fellow vendors and they will reciprocate.
I regularly barter my services and products. I usually can’t use a DJ or need a wedding dress, but many times there are other things I need/ want such as hotel stays or restaurant certificates. I have several levels of services that I can barter out. For example, my top package of 2 years of coaching with weekly check in and goal measurement costs $15,000. I would trade that for the right “stuff” that someone may have to offer . (btw- I am in the market for a 2nd vehicle, so if you have something along that, give me a holler). Further, I could arrange any level of trade to suit someone’s needs. It is all about being flexible and figuring out a way to do more business with what you have. Check in with me and put out an offer- we may have a match~!
You should NEVER do barter before you do a Cash deal (when I say cash, I mean any deal that is bringing you real money, not traded services or products). Always set your sites on Cash deals and fill in your empty spots with Barter. Barter has the added benefits of keeping you out there doing your “stuff”, helping you from special relationships with other businesses and using your “stuff” which may not otherwise be used.
Until Next Week, Here’s to your success!