Barter Is A Guaranteed Sale

Someone recently asked how barter actually saves me money as a business owner. I was thrilled to answer her question because the subject of barter is one of my favorite topics! In fact, as a business coach (I coach residential maid services in business growth), I have a popular workshop on that very subject called, of course, “Barter Is A Guaranteed Sale”. Business owners who get stuck in a rut and stop thinking “out of the box” don’t always “get it” at first. It takes a while to sink in. I know, because I was one of them, for too many years. I argued “why would I barter with you; I’d rather have the money”. Here’s the deal, when you barter you are bartering with someone who won’t hire you for whatever reason (can’t afford you, not sure they need you, uncertain of your skill level). A barter client is supposed to be someone who was not your client in the first place and are not planning on hiring you. In other words, you never convert a “cash” (“cash” meaning “paying client” whether by check, credit card, or real live greenbacks) client to barter, that’s a mistake and evidence that you don’t understand barter. You convert those “no thank yous” to barter! If they have what you want or need, you’ve just made a guaranteed sale on your light days! Now, if you barter for something you don’t need, don’t want, or can’t use then you’ve wasted your money as it will cost you something to deliver your portion of the barter. Also, if you pay more than “regual price” for the barter then you will also waste money unless your margins are extremely low. If you are in a labor driven business (a business like maid service) your margins are pretty high so you can only barter for goods and services you need and at prices you would have paid. (by “margins” I mean the cost associated with delivering your part of the barter–your labor costs)
Let me illustrate for you:

If I’m in need of about $1,000 worth of printing (brochures, business cards, stationery) and I have no money in the bank to pay for it, I know I’ll have to sell about $2,000 worth of cleanings to pay my printer (because my direct labor cost on the cleanings will be a little more than 50%, I can’t sell just $1,000 worth or cleanings. I’d only have about $450 of profit to buy my printing). But, if I knew another printer in town that will match the price I was quoted by my existing printer (who, by the way, won’t use my service because “he lives in an apartment and doesn’t need cleaning”) and who lives in a big house (the new printer, that is), has kids and pets and “would love to have housecleaning but can’t afford it right now” I have the perfect barter opportunity! He’s not a client any way. Your not his customer because you’ve been using the other guy for years. That is the perfect barter contact. If he’s been getting cash out of you he’s not likely to barter, but since you aren’t his customer he has very little to lose and his wife will be thrilled with their new maid service! The best part of all, you only clean their house on your “light days” so for a maid service that would be a Monday or a Tuesday, never a Friday. He gets $1,000 credit for maid service (or mail him 10 $100 gift certificates) and you get your printing NOW! You’ll deliver your $1,000 worth of cleanings over the course of 10 weeks or 20 weeks, depending on whether they go with weekly service or bi-weekly service. So, you just got your $1,000 worth of printing on “credit / no interest”! And now, the best part–if they fall in love with having their house cleaned every week (and who wouldn’t!) they will either hire you to continue or you will come up with more printing projects for them to do! You sold that work on a light day, so you didn’t turn down any “cash” clients for his spot, your employees got more work on their schedule, which makes them more happy with their paycheck, and you didn’t write a check out of your checking account for the printing. You paid approximately $500 plus payroll taxes for that $1,000 print job!

Barter is a guaranteed sale! Once you really “get it” you will ask every single prospect who inquires about your service, “so, what do you do for a living…………” If they do not convert to a cash sale, keep their name and number an contact them later if they have something you can “trade” for (and only if they did not convert to a client)! I have a full two-hour workshop on navigating barter relationships. There are many, many ways to deliver your barter jobs in a more profitable manner than you think! There are also pitfalls and perils you MUST know about before becoming a “Power-Barterer”! I do about $20,000 in barter a year through an organized barter association called ITEX. You can get burned or you can leave money on the table, and you can get in trouble with the IRS if you don’t know what you’re doing. The safest way to manage barter is through a “trade” organization. I have a terrific broker (Gary Smith) who is very helpful. For information on my “Barter Is A Guaranteed Sale” Audio CD, visit my website. If you enjoyed this post, please comment! I welcome your feedback. Or visit http://www.themaidcoach.com/

Comments

  1. Melissa Muraira says:

    Hi Debbie. I love bartering and am becoming more confident with it. I have bartered for printing and advertisement in our area. Thanks for taking the time to share your amazing ideas and tips!

  2. Leif @ BizX says:

    Debbie,

    Thanks for the great post on barter. Many people don’t understand it’s power. You did a great job of explaining it clearly.

    One thing I would like to mention is that some of the problems you talk about (finding a trading partner who has what you want and wants what you have, tracking and recording, reporting for tax purposes, etc.) can be eliminated by bartering through an organized trade exchange, such as BizXchange.

    All the same rules you talked about still apply. You never convert a “cash” relationship to trade, members have to charge the normal retail value of their product or service and you don’t turn down cash business because you are too busy with barter.

    Bartering through an exchange simply makes the barter concept more powerful because it allows you to trade with thousands of members in your area who don’t necessary meet the “double coincidence of wants” situation that is required for direct barter. It also makes it much safer.

    Thanks again for the great article!

  3. Debbie Sardone says:

    Thanks Leif! You are so correct. I am a member of ITEX Barter exchange and I trade my maid service consulting services with businesses nationwide, as well as my cleaning business gift certificates locally. I can use a printer in Georgia because there’s another ITEX member somewhere in my location that needs maid service! I will look into BizXchange as well!

  4. Susie Wulf says:

    Great advice! I’m getting ready to expand and also checking into getting some shirts, I think I’ll give it a try.

    Susie Wulf

  5. Anonymous says:

    Great advice! I’m getting ready to order shirts, I think I’ll give it a try.

    Susie Wulf

  6. Hi Debbie ,what a great post. I never really thought about bartering ,so this was avery eye opening article for me. I would love to hear more about it as it seems you could lose out if not careful.But what a great way to get what you need.
    Thanks Tonya

  7. Debbie Sardone says:

    Tonya:

    You are welcome! Too many business owners are not tapping into barter. It saves money and generates new income. I do a Teleworkshop on barter, if you send me your email address I’ll let you know when I’ll be doing another class!

    send it to: debbiesardone@gmail.com

    Thanks so much

  8. Patricia Myers says:

    This really up my eyes. I never looked at bartering this way. I always see people put ads on craigslist and think no way. Now I have new outlook on this.

  9. Hi Debbie! It never occurred to me to barter… ever… until I read this blog! You are full of fabulous ideas and I would like to try this one too. I put it on my to-do list to try for weeks, but I’m too chicken! Please put me on your list for your next workshop on this topic!!!
    Thanks again for the great article!
    Rhonda
    Dynamic Maids

  10. Debbie – great post! I’m in ad sales and have been using bartering to fill unsold inventory. I even have made some deals with smaller startups in which I gave ad space in return for equity in the company! there are good marketplaces to do this (in my case I used http://stock4services.com). Anyhow, totally agree with you, have to be innovative this year!

  11. Debbie Sardone says:

    You are welcome. Glad you enjoyed it! Thank you for your post and happy bartering.