I wish this was the first time I’ve heard this story…but it’s not.  Please accept this story as a warning of all the things a barter exchange should NOT do. In case you are not familiar with what a “barter exchange” is please check it out here.

I just got off the phone with a former member of an exchange I’m in.  I say former because he tells me that he told the exchange that he was closing his account over 6 months ago.  The reason I was calling him was because the exchange had recently sold me a gift certificate for his services (that he will not be honoring).

Mistake #1
The vendor says that he was led to believe that there were many members in his immediate area when in fact there were not.  I’m a firm believer that a member’s success (or lack there of) is directly related to the volume of members in their geographical area.  If you are recruiting a member that isn’t in an area with a lot of other members you have to be up front about that.

Mistake #2
The vendor says that the exchange does not police member pricing.   Over pricing is a major industry problem and I don’t see it going away any time soon.  I think the solution is for exchanges to police pricing and kick out gouging members, but honestly I don’t think most exchanges have enough staff to stay on top of this.  What I told this particular person was that if his exchange won’t watch out for over-pricing then he’d have to do it himself.

Mistake #3
The vendor says he was given poor customer service in general by the exchange.  He says they didn’t do any training with him and weren’t particularly helpful when he ran into problems.  From his point of view the only time they ever called him was after he decided to sever the relationship and even then it was just to harass him for monthly fees.

Please note that what I’m telling you is all from this former member’s point of view.  The conversation I had with him was lucid and cordial and I tend to believe what he said.  That being said I’m quite sure that his former exchange would have a different take on the events.

Every likes to be liked but when it comes to barter there is extra incentive to be lovable.  As we’ve discussed in the past, everyone has a limit as to how much barter they should engage in.  That’s even true for us barter fanatics.  What I’ve learned however is that when folks have to cut back on barter, they will often times still trade with their “favorites.”  So my advice for you is to be one of those favorites.

Contrary to what you may think, being a “best customer” does NOT mean spending the most money with that vendor.  Usually it simply means that you have a relationship beyond a financial transaction.  It’s as easy as asking how somebody’s kids are doing.  Being a best customer means showing up for appointments.  It means not grinding vendors on price.  It means valuing and following the advice of consultants that you hire.  It means being flexible about the product/service you are interested in.  It means understanding that your deals need to be advantageous to both parties.

Of course it probably wouldn’t be a bad idea to live your life like this every day, however, as I mentioned earlier, there are extra perks in the barter world for being a favorite customer.

If you are one of those lucky businesses that have a low incremental costs for additional “units” sold then barter can be a gold mine for you!  There are some businesses where they have to outlay a certain amount of resources to keep their doors open and (for the most part) their expenses don’t vary greatly based on the volume of customers served.  Examples would include movie theaters, gyms, martial arts dojos, etc. etc.  For a yoga studio there is literally no additional cost to add a new barter customer to their class.  As such the barter earned is like free money!!!  To those people I say….BARTER MORE!  I’m am at a loss as to why I can’t barter to go to the movies right now.  Ug…but I digress…

Unfortunately many of the folks reading this right now are not in the lucky situation to be able to earn barter credits free.  That being said I would encourage you to take a look at what your real costs are to barter.  It’s probably lower than you think.  For example, I have a barter partner that operates a mini-golf/arcade/go-kart racing facility.  Other than a little gas for go-kart racing barter is pretty much pure profit for them.  They would still have to have the same number of employees, maintenance, electricity, etc. with or without their barter clients.  I ran into a frustrating negotiation with a laundromat a year or so back.  They already had a manned location where they would wash and fold your laundry for you if you want.  Their current staff had free time on their hands so they could have provided this service on barter and their only cost would have been soap and electricity.  And for all that they couldn’t see the value of barter.  PEOPLE… get a clue here.  Why would you not want to have a sale that’s 95% profit?

I would like to encourage you to look at your business and see how much of your expenses are “sunk” and can be allocated against your cash business.  I think you will find that if you do so your incremental costs will be low and your barter profit will be shockingly high.  Now go out there and make some trades!  Also remember…every barter client that you add will tell their friends about your service.  You WILL gain new cash clients because of your barter business.