Why Is Barter Good for Small Businesses?

Why Barter is Good for Your Small Business

"If I had my life to live over again, I would elect to be a trader of goods rather than a student of science. I think barter is a noble thing."
Albert Einstein  

If you've seen interesting posts about all the advantages of bartering for goods and services and you've wondered if what you do could apply....If you're asking yourself, "Could I make money bartering?", well, then read on. I'll examine that question with you and hopefully by the end,  you will be able to draw a positive conclusion, whether barter is something that will work for you, or not.

Sound fair? Good! Well...let's get rolling.

Okay, if you read the last post, you know a bit about how barter works. Maybe you're beginning to see how it may or may not be helpful to growing your business or slowing the rate of speed at which your cash flows out of your pockets and your In Column. Maybe you've got your doubts or maybe you're waiting for just the right moment and inspiration to spring it on your spouse or your business partner.

Let's say it's the former. Let's say you and your spouse discuss every big decision, including the ones involved in your business. You're tight that way. Okay...so, you're thinking you're interested...you're thinking that you have been looking for ways to rein in spending, to stop the trickle out of cash from your books and bartering for business seems like it could be just the ticket.

In some cases, YES, it can. In other cases, sometimes trade is not what we think it's going to be.

If, for instance, your business is retail. If you've got hard and fast costs, including shipping and wholesale costs that come out of your pocket, trade MAY not be ideal for you. I say MAY because there are exceptions, for instance, if you have an overstock of certain items. Trade them! Or if you have extra inventory just sitting in a storage unit somewhere, costing you storage fees, Trade them! And if you're business has a retail outlet, but it's not your sole revenue source, then you may be perfect for trade.

And believe me when I say that 'perfect for trade' means that is you and your company, who will be satisfied, that it's you who will profit from it, either by experiencing reduced cash outlay or by improving and broadening your customer base! So, let's break it down. How much will it cost versus what are the benefits, right? So, let's look at this scale as a guide and ask ourselves the key questions:
    Ask yourself, "Will the benefits of joining a trade exchange be equal to or, hopefully, greater than the costs of joining?"
     And to answer that, let's explore it....first, well, the costs. 
 

Fast Company, "Where Ideas and People Meet"

Based on all the trade exchanges I've visited online, the costs are fairly typical across the board. You can take a look at this article in Fast Company magazine , which contains the best breakdown of the myths about barter, and why it actually works so well.

As you'll see in that article, depending only on how well suited your business is to trading, for instance, businesses with a narrow profit margin, such as national food supply organizations, are really the only ones not ideal for trade. If you are a lumber supplier, for instance, with inventory that doesn't or hasn't moved, or if you're a service provider, your business is ideal for trade. If you are a restaurant with some empty tables or a hotel or inn with empty rooms on occasion, your business is ideal for trade.

               Other ways joining a barter is good for your small business is that when members are in need of certain products or services, the first one they call is the Barter Exchange to see if it's available by trade through the exchange, so they are constantly being referred by the exchange, or by other members of the exchange. And if the item or service is not available, the exchange member can request of the exchange that it be added. After which, once a supplier joins, they will have the ability to trade for this item or service.

Often, exchanges will help businesses with their advertising and promotional needs. One such example is The Crescent City Trade Exchange in New Orleans. When a new member joins the Exchange in New Orleans, an advertising email is sent out to all members, informing them of the goods and/or services supplied by the new member. The ad is put together with images from the company's website and detailed, pertinent information supplied directly from the company. In fact, any time a company in the exchange has something to advertise to the membership, a flash email can be sent out on their behalf.  Many trade organizations offer such assistance and support

                Additionally, many exchanges offers a helpful form on their website for when a member has a particular need, they can then be referred by the exchange to the needed supplier. If that need can't be met by existing members, the business development team is put on the task of seeking out a suitable supplier to meet their membership's needs. Two such exchanges are Southern Barter in Arkansas and Barter Systems in the Washington D.C. area.

Moving inventory, filling rooms and tables, expanding your customer base and reining in cash expenditures are great reasons to join a barter exchange and having an exchange work for your business. Each business's success becomes the focus of the exchange.









After all, Successful businesses working well together, successfully is the desire of every barter and trade exchange or network.