Why Exchanges Won't Accept Some Businesses

A big part of successful bartering is your ability to recruit new barter partners.  If I only traded with existing members of my barter exchanges I would be bartering a lot less (more about barter exchanges).  I decide what product/service I need, then go check out my existing exchanges.  If they don’t have what I want, then I strike out on my own starting out with CraigsList and expanding my search from there.  Often times when I find a new potential barter partner, I try to recruit them into one of my barter exchanges.  I have no problem with trading direct, but there are a lot of limiting factors with direct trade that barter exchanges can remove.  It came to my attention a while back that there are simply some industries that my exchanges have no interest in.  This post is to help you understand why some businesses are more attractive than others to exchanges and what you can do about it.

There are a couple different spins on why an exchange may not want a new member but they all come back to money.  Specifically it has to do with the exchange’s estimate as to how much volume they will most likely be able to trade.  An exchange has to put resources into adding new members so it simply is not profitable for them to sign up a lot of members that aren’t trading.  I spoke to an exchange recently that told me they really try to avoid signing anyone up that they don’t think can earn/spend a minimum of $3,000 to $4,000 annually.  I’m in California so that number may be lower in some less expensive parts of the country.

Here are some common reasons for not signing up a potential member:

  1. Based on past experience, an exchange may simply close particular industries because they have been low volume in the past.  They may have tried multiple times with this industry and found it unprofitable.
  2. The exchange may already have another member in the same industry as the potential member and the exchange may not feel that there is enough business to support multiple members in the same category.
  3. An exchange may think that some industries are simply more trouble than they are worth.  This could mean that there are industries that generate a lot of complaints and are big eaters of time and resources for the exchange.   A perfectly legal industry that I’ve noticed exchanges shy away from is firearms.  I’ve bartered for firearms directly many times without a hitch but (especially out here in California) I think it’s viewed as an industry that will create paperwork/legal headaches for exchanges.  I’ll come back and post another article later about why this is totally wrong and exchanges should allow barter for firearms.

So….as an exchange member who has a new potential barter partner that you want to join your exchange, what can you do about this?  Here is my advice:

  1. Check with your exchange before you put a lot of resources into recruiting a new member.  If you know you are going to have to barter direct with with this new partner, it’s better to know that earlier rather than after you’ve told them how wonderful your exchange is.
  2. You’re more likely to talk your exchange into accepting the new member if they sell a product/service that can be provided/shipped nation wide.  That way you can explain that it’s not a problem that they have another local vendor in the same industry.
  3. The best way to talk your exchange into accepting a new member that they feel is borderline is to tell them that you will be using the vendor a lot.  A while back I recruited my kid’s martial arts dojo into my exchange.  They already had another dojo in the exchange and I think they were unsure as to how much business the new member might get.  When I told the exchange that I’d be paying for all three of  my kids to go on an ongoing basis, that made all the difference.

Bottom line here is that sometimes you have to exercise some salesmanship, not only on a vendor that you’d like to barter with but also your exchange.  You won’t win every time but the more you understand the dynamics the better chance you have.

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