In our last article we talked about many reasons mixing barter and cash can be a bad idea. That being said, there are some situations where it makes sense to make hybrid barter/cash deals. Here are some that make sense to me:
- Taxes/tips/shipping etc.
This doesn’t need any explanation does it?
- Using barter to get a new cash client
I’ve had a bunch of times where I’m cold calling a potential client and I use barter as a really good differentiator to win the project. For example, I may be calling on a potential client for cash business and as an added bonus I will say: “If you want I can accept some of the payment in trade for your product/service.” This approach has worked successfully for me on multiple occasions. The ultimate goal was to win a new cash client but taking part of the payment in trade in order to sweeten the deal made the difference. I then do part of the job in trade and bill cash for the rest. Of course, you can only do this when the product/service that the potential client deals in has value to you. Obviously this only applies to potential clients that are not in your barter exchange.
- When a long-term cash client is a member of your barter exchange
I have only had this happen once, but seeing that it happened to me, it could happen to you. I had an existing cash client that I’d been doing business with for years. When I joined a barter exchange I found out after the fact that this existing client was in the same exchange. After a while he realized this also and approached me about switching from cash to barter. Now as much as I like barter, I would ALWAYS rather have cash so the last thing I want to do is switch existing cash clients over to barter. Seeing that he was a cash client of mine long before I ever even knew that barter exchanges even existed, I would have been well within my rights to refuse his request outright. That being said, that approach would not have done much to encourage our ongoing relationship. Honestly I felt a little trapped and even though I didn’t have to start bartering with him, I felt like I had to do something or else it would appear that I had no interest in my client’s best interests. So…I struck a deal to switch him over to a 50/50 cash/barter deal. That way I’m still getting a good chunk of cash, but I showed a lot of “good faith” to the client.
- On larger trades with barter currencies that are not in demand
This last example is actually a deal I’m working on right now. A potential client approached me through one of my barter exchanges. I currently have more credits than I need with this particular exchange so I was politely turning this person away. In the course of the conversation, the prospect asked if I was interested in the job if he paid me 50% in cash. Most exchanges do not allow this type of deal so without thinking I turned him down on this offer also. After hanging up the phone I remembered that this particular exchange only requires that the first $3,000 of a trade be barter and after than it can be cash. Seeing that the whole project was around $6,000 the exchange would allow for a 50/50 deal. I immediately called him back and we’re working on putting together a deal now. I don’t really need more credits with this exchange right now but if I’m getting 50% cash it’s a viable deal for me anyway.