Bartering: Your Expertise and Services are Worth Big Bucks

Bartering is not negotiating! Bartering is “trading” for a
service, or for the goods you want. In essence, bartering is
simply buying or paying for goods or services using
something other than money (coins or government printer
paper dollars).

Thus defined, bartering has been around much longer than
money as we know it today. Recent estimates indicate that at
least 60 percent of companies on the New York Stock Exchange
use the principles of bartering as a standard business
practice. Congressmen barter daily to gain support for their
pet projects. U.S. aircraft manufacturers barter with
foreign airlines in order to close sales on million dollar
contracts. Perhaps you have experienced at one time or
another in your life a friend saying, “Okay, that’s one you
owe me…” Basically, that’s bartering.

The reason bartering enjoys renewed popularity in times of
tight money is simply that it is the “bottom-line” method of
survival with little or no cash. In times of high interest
rates, cash in anyone’s pocket is indeed a very precious
commodity, and bartering is even more popular. Bartering
affords booth the individual and the established business a
way to hold onto cash while continuing to get needed goods
and services.

In addition to saving a business borrowing costs, bartering
can improve its cash flow and liquidity. For anyone trying
To operate a successful business, this is vitally important,
and for individual families in these times, it makes
possible the saving of cash funds for those purchases where
cash is necessary.

To start and successfully operate a bartering club, YOU MUST
THINK IN TERMS OF A BANKER. After all, that’s precisely the
reason for your business – to receive and keep track of
people’s deposits while lending and bringing together other
people wanting or needing these deposits.

So your first task is to round up depositors. As a one-man
operation, you can start from your home with nothing more
than your telephone and kitchen table, but until you get
helpers you’ll either be very small or very busy (probably
both).

You can run a small display ad in your local newspaper. A
good ad would include the following ideas:

NEW BARTERING CLUB!

Trade your expertise and/or time for the
merchandise or services you need. We have
the traders ready – merchandise, specialized
skills, buyers too! Call now and register.
ABC BARTERING (123) 456-7890

When respondents to this ad call, you handle them just as a
banker handles someone opening a new account. You explain
how your club works: Everyone pays a membership fee of $100
to $300, and annual dues of $50 to $100. The depositor tells
you what he wants to deposit, perhaps $150 worth of printing
services, and what he’s looking for in return – storage
space for his boat over a three month period. If you have a
depositor with garage space for rent and needing printing
services, you have a transaction.

But let’s say you have no “perfect match” for this
depositor. On your list of depositors you have a dentist
who’s offering $500 worth of dental work for someone to
paint his house. A woman with a garage to rent in exchange
for dental work for her children. An unemployed painter
willing to paint houses in exchange for a side of beef, and
a butcher who wants to trade a side of beef for advertising
circulars.

Remember, when a new member joins your club, he makes a
deposit and states his wants or needs. In the above example,
you have a typical bartering club situation. Your service is
to spend or line up those deposits to match the wants or
needs of the club members.

An affinity for people and a good memory are vital to this
kind of business, especially if you’re running a “one-man
show”. Generally, when you have a buyer for one of your
depositors, you notify him or her right away with a phone
call. You simply tell her that Club Member A wants to rent
your garage. She tell you fine, but she doesn’t want any
printing services. You simply tell her to hang on because
you are currently in the process of contacting the dentist
who will do the work on her kids’ teeth. And so it goes in
the operation of a bartering club.

Some of the larger bartering clubs (with several thousand
members), simply list the deposits and wants or needs on a
computer, and then invite their members to come in and check
out the availability for themselves. Others maintain
merchandise stores where the members come in to first look
at the computer listing, and then to shop, using credit
against their deposits. The smaller clubs usually publish a
weekly “traders wanted” sheet and let it go at that.

These methods all work, but we’ve found that instead of
leaving your members to fend for themselves or make their
own trades, the most profitable system is to hire commission
sales people to solicit (recruit if you will) new members,
specifically with deposits to match the wants and needs of
your present members. These sales people should get 20% of
the membership fee from each new member they sign, plus 3 to
5 percent of the total value of each trade they arrange and
close. This percentage, of course, to be paid in club
credits, spendable on merchandise or services offered by the
club.

You’ll need a club charter, a board of directors or
officers, and in many areas, a city or county license. Check
with your city or county clerk for more information on these
requirements. You should also have a membership contract,
the original for your files and a duplicate for the member.
In most cases you can write your own, using any organization
membership contract as a guide, or you can have your
attorney draw one up for you. You’ll also need a membership
booklet, or at least an addenda sheet to your contract,
explaining the rules and bylaws of your club. It’s also
suggested that you supply your members with consecutively
numbered “club membership identification cards” for their
wallets or purses. Some clubs even give membership
certificates suitable for framing. You can pick these up at
any large stationery house or commercial print shop.

Two things are important to the make up of the membership
package you exchange for membership fees:

1. It must be as impressive as you can make it

2. It must be legal, while serving your needs almost
exclusively.

Basically, you should have at least 100 members before you
begin concentrating on arranging trades. As stated earlier
in this report, the easiest way to recruit new members is to
run an ad in your newspapers, and perhaps even on your local
radio stations as well.

Follow up on these inquiries with a direct mail package,
which would typically consist of a brochure explaining the
beauty and benefits of being a member of your bartering
club, a sales letter, and a return reply order form. After
you’ve sent out the direct mail piece, be sure too follow up
by phone, and if necessary, make a call in person as any
other sales person would do.

Another way of recruiting new members is via the Amway
Introduction Party Program. Allow a certain number of club
credits for each party a club member arranges for you.
Insist on at least 10 couples for each party, and then as
the “Attraction of the Evening,” you or one of your
salespeople give a motivation-benefits available recruiting
talk. Be sure you get the names, addresses and phone numbers
of everyone attending, and be sure that everyone leaves with
your literature.

If all those in attendance at these parties do not join, the
follow up on them, first by phone and then with personal
sales presentations. Once you’ve got them interested in your
club, do not let go or give up on them until you have signed
them as members. Another thing – take a page from the
Party Plan Merchandiser’s Handbook, and look for those who
would be most likely to want to promote a similar party for
you. Offer them an item of merchandise they might be
particularly interested in, and club credits if they’ll not
only join, but also stage a party for you.

A bit more expensive, but just as certain of success are
free seminars. Rent a large meeting room, advertise in your
local papers, and then put on a hard-sell recruiting show.
Such a plan is very similar to the party plan idea, but on a
larger scale. An inside tip: Whenever you stage a recruiting
party or seminar, always “pad the audience” with your own
people, who will of course lead the way for those you’re
trying to recruit.

As stated earlier, you can start operations out of your
home, but working out of your home has a number of growth
inhibiting factors. After a certain period of time, the
growth of almost any kind of business is retarded when itís
operated out of a home. So just as soon as you possibly can
afford to, move into an office of some sort. Keep your eyes
open and consider the feasibility of sharing an office with
an insurance agent or real estate broker. Check your
newspaper classifieds for businesses willing to share office
space or to rent desk space or other office amenities.

This is the kind of business that demands an image of
success. You just can’t keep people from “dropping in” when
you’re operating strictly on a local basis. And when you
attempt to hire sales people, a place of business to work
out of is just as important to them as how much commission
they’re going to receive. Image is super important, so don’t
neglect it!

Ideally, you should have one salesman for every 50,000
people in your area. Run an ad in your local newspaper, and
also list your needs with your state’s employment service.
Hire ONLY commission salespeople. Give them a percentage of
the membership fee for each new member they sign, plus a
small commission on each trade deal they close.

Assign each of your people specific territories, and insist
that they call on potential commercial accounts ranging from
the “hole in the wall” rubber stamp shop to magazine
publishers and commuter airlines. There’s plenty of business
available in every city or metro area in the country.
Encourage your sales people to be creative and imaginative
when calling on prospects. Then, be sure that you keep an
open mind and listen to their wild trading proposals (some
“wild” proposals have been known to become “wildly”
successful)!

Schedule “open discussion” sales meetings every morning
before your sales people “hit the bricks”. Have each of
them report on their selling efforts from the day before,
and present to you a written list of prospects they plan to
call on today. Set up sales motivation workshops to be held
at least once a month, and at least once a week schedule a
motivational speaker or play one of the widely available
success/inspirational tapes as a closing feature of your
morning sales meetings. Stock sales success books and
encourage your people to borrow them, take them home and
read them. Your sales people will make you rich, but only
if you turn them on and keep them flying high with personal
motivation.

Should you or should you not accept installment payments
from new members? Yes, by all means! But only when you’ve
got their signature on a contract drawn up for your benefit
and deemed legally binding by your attorney. What about bank
cards? Yes indeed! In fact, you’ll find that your capability
of handling bank cards will double or even triple your
sales.

Precisely how much are you going to need in actual start-up
costs? We should estimate a least $500 for your printing and
legal fees, unless you can trade charter memberships in your
club for these services. Timewise, you’re going to be
putting in 18-hour days, and 7-day weeks, until you get
those first 100 people signed up. And there won’t be any
money for salary of long-deserved vacations from these first
100 members you sign. You’ll need it all for advertising,
membership packets and office set-up. However, if you can
really work at it, you should be home free in six weeks or
less. Then you can set up your office, hire a couple of
girls to handle the paperwork, and take on a salesperson or
two.

Reputation and success in matching offers to wants will be
just as important as image, so give it your all. Don’t give
up; stand behind the implied, as well as the real promises
you make to your members.

A couple of final notes: Should you offer a guarantee of
satisfaction? Only so long as it makes money for you, and
you can back it up. There’s not a person in business
anywhere who enjoys refunding a customer’s money. But don’t
forget that the existence of your business depends on
service. The more you project an image of a “people
pleaser,” the greater success you’re going to achieve. This
is definitely not a business for someone who doesn’t enjoy
“waiting on” people. You’ve got like people, enjoy helping
them, and want the inner satisfaction that comes from
selling new ideas.

This is definitely a growth business. Bartering Clubs in
metropolitan population areas of 300,000 or more are
reporting incomes of over a million dollars. The average in
cities of 100,000 population is about $150,000 per year.

Actually, no experience or special training is required. The
operation of a Bartering Club is equally suited to women or
men. Both do equally well as salespeople. It’s a business
that fills a need, and a kind of membership program people
will stand in line to be a part of, once they’ve been
introduced to the benefits.

This is the plan. It’s going to take your time and effort to
get organized, but after your initial work to establish
this business, you can become quite wealthy in a relatively
short time. Read over this plan again; determine if this is
“the one” for you, and then go all out. It’s up to you, and
all it takes now is action on your part.

One of the best of all the available sources of ongoing help
and knowledge about bartering is a quarterly publication
entitled Bartering News. Write and ask for a sample copy.
The address is:

Bartering News
P.O. Box 3024
Mission Viejo, CA 92690

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SMB Reviews
SMB Reviews 473 posts

SMBReviews is committed to providing small and mid-sized business owners with the information and resources they need to select the best service or product for their company.

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