Can Barter Help Increase Cash Sales and Visability for Your Small Business?

Barter is becoming an increasingly popular method of commerce. The U.S. Department of Commerce estimates that 20 to 25% of world trade is now barter. Corporate barter is now a 20 billion dollar industry. It seems as though everyone from the big corporations on the New York Stock Exchange to small home-based businesses are jumping on the barter bandwagon.

I never thought about barter as a tool for building my businesses. That changed in April when I joined a local barter network in Vermont. For a small membership fee and a small commission on each trade, I now have access to almost 200 (and growing) local merchants' products and services including everything from popular restaurants, to spa services, electricians, hotels, rental cars, landscapers, and yes, even flying or sailing lessons!

How does it work?(Most of the big networks function in this way.)

  • When you join the network, you receive a no-interest line of barter credit. Barter credit is similar to the credit line on your credit card. You can use the credit as you please and when you trade your company's goods or services, you receive barter dollars (par with US dollars) credited to your account.
  • Your business is listed in the network membership directory. The listing provides basic information about your business and buyers contact you directly.
  • When someone in the network wants your product or service, you authorize the transaction according to the agreed price and the system keeps track of the details for you. It isn't necessary to purchase goods from the person who purchased from you. Your trade dollars can be used to purchase from any other network members.
  • You receive a computer-generated monthly statement showing your barter activity. You pay a small commission based on the amount of barter dollars transacted. Think of it like an interest rate on a credit card only it costs much less and has more benefits.

Benefits include:

  • Barter increases new business: Attract customers and referrals who wouldn't have known about your business otherwise. Members of the network are likely to choose you over the competition if there is no outlay of cash. This in turn, will increase your cash sales, simply because your product is gaining exposure and referrals.
  • Barter expands your customer base: Expand your market while maintaining your existing cash customer base. Please your barter customers and they are sure to tell other potential customers all about you.
  • Barter enhances your lifestyle: Use your barter credit for whatever you want in the network without using credit cards or spending cash. If there is a service or product that does not exist in your network, recruit a business that provides that service. Many barter networks pay you a referral bonus in the form of barter credits if you recruit a business they accept into the network.
How does one choose a barter network?
  • Do an Internet search on Google to find a reputable network. The beauty of the Internet is that you don't have to live in the state where the network is administrated.
  • Talk to the person administrating the network. Make sure he/she answers all your questions to your satisfaction and doesn't try to hard-sell you.
  • Make sure all of the conditions are in writing and be sure you understand all network trading rules and limits before you sign or pay anything.
  • Check to see what other businesses participate in the network. Are they businesses you respect, admire, and with whom you'll want to do business?
  • Tell your friends and other business owners. Spread the word about barter. You'd be surprised at how little people know about this method of conducting business.
  • Get involved. Go to meetings or mixers. You get as much out of the experience as you are willing to put into networking. Remember, networking and sales are all about creating relationships.

Barter has created new power for my businesses. I feel good that I am supporting small companies like my own who I may have never met otherwise. Could barter work as part of your marketing plan?

Copyright 2005, Ann Zuccardy, All rights reserved.

Ann Zuccardy is a freelance technical and copy writer with 17 years of industry experience in marketing and technical communication. She currently consults with IBM in Essex Junction, Vermont where she writes software user manuals, training guides, and release notes. Ann is also the owner of Vermont Shortbread Company. She can be reached at Wordbrains.com.

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