I was contacted by the folks over at Yahoo Finance the other day looking for some quotes for an article they were writing about…..you guessed it…..BARTER. So here it is a week later and they included a couple of my comments and a link to our site.
What is your favorite thing to barter for? Personally my favorites are:
- Food (restaurants or groceries)
- Staff for my business
- Cleaning/Maintenance (house, yard, etc.)
- Activities for my kids (karate, music lessons, camp, etc.)
This important thing here isn’t actually what my particular favorites are, but WHY they are my favorites. If we can figure that out we can hopefully help you to find new/better favorites for yourself.
Looking at this list there are a couple things that jump out at me:
- The top three are necessities. I have to eat. I have to staff my business. I have to clean my house and mow my yard. Anything that you HAVE to do are great things to barter for. It stands to reason that if you don’t barter for them you will either have to pay cash for them or….. (shutter) do them yourself.
- Paying employees and contractors is a huge part of my businesses cash expenses. Any time I can barter to have my bookwork done or have graphic design done for one of my client’s websites, it’s the same as putting cash in my pocket. Please note that it’s perfectly legal to hire staff on barter. You simply treat it like cash, doing withholding/taxes/workers-comp for employees and sending 1099’s to contractors.
- The top four items on the list are reoccurring. My thinking is that any deal that is good once is even better more than once. As such, setting up any trade that can be ongoing should be a top priority. Let’s face it. It can be a good chunk of work to put together a trade so you might as well set up a single deal that will result in multiple transactions.
- The last two items fall under an important category for me. They are things that are not a necessity but are a lot of fun. They are also notably things that I simply could not do if I was paying cash. I think it’s important even when you are on a tight budget to find ways to have fun. Barter enables me to do those fun things w/o blowing my cash budget. Please note that it’s perfectly legal to barter for firearms. You simply treat the transaction exactly the same way you would a cash transaction and follow all state/federal/local laws that are applicable.
This is my 100th post to the barter fanatic blog! It’s been an honor and a privilege to write to and for you. I’m looking forward to many more posts in the future. Please feel free to drop me a line and let me know if you have an idea of something that I should investigate or write about for you.
I have come to the conclusion that there are some print jobs that are good to do on barter and there are some that are not. Because you can now order printing online so incredibly cheap I’ve decided that those “generic” print jobs that don’t really need any TLC, are best to do for cash with an online printer. It’s so cheap to do it this way, there is no way a little local printer (one that is likely to barter with you) can compete with their prices. With that in mind I recommend that letterhead, postcards, business cards, etc. be printed for cash with an online printer. That is of course AFTER you hire a graphic designer on trade to put all the artwork together for you.
That being said, there is still a lot of room for barter in the printing world. I would recommend you use barter to do more expensive, out of the ordinary jobs that require more service. For example, I recently had 20,000 church bulletin shells printed by a printer on barter that needed a perforated tear-off section. Not only did this mean that the printing was done locally, but it also meant it was a high service experience. For example, when the printer had concerns that the glossy finish might give my church’s copy machine trouble, he drove over with some of the paper and did a test run to make sure everything would work before the print job was done. It wasn’t necessary for this job, but bartering with a local printer would also allow you to do a press check at the time of printing.
Bottom line: Pay cash for the easy print jobs online, and barter for the tough ones locally. Also… I’m not necessarily recommending that you use vistaprint as your online printer. I simply used their logo because they are one of the best known online printers. Personally I have had good luck with www.americasprinter.com
If you are an active trader you will constantly be cooking up new deals, meeting new people and making new offers. Many times of course you don’t end up closing the deal, but the times when you do more than make up for the times that you don’t. I recently had a monumental rejection that reminded me that not everyone wants to be my friend. It’s important to understand those so they are easier to let go and move on. Otherwise they can eat you up and keep you from making future deals.
Here’s what happened:
I was looking for a piano tuner to tune both the baby grand that we just inherited from my mother-in-law and my church’s piano. It seems like a pretty good gig to me because I only live 4 blocks from my church. It’s a two-for-one for the right tuner. Additionally I understand the importance of having them tuned on a regular basis so this is potentially ongoing work for years for whoever I make a deal with. I checked out my local barter exchange and they didn’t have a tuner. Next I looked to see if there were any local tuners that were posting in the barter area of craigslist. When I didn’t find anything there I sent out a canned email to all the tuners that post on craigslist for cash explaining that I’d like to barter and asking them to get back to me if they are interested. I had two different guys respond who both seemed qualified. The first guy who contacted me (we’ll call him Mr. Pain) was willing to trade but wanted something very specific in trade that I did not have immediate access to. Additionally it was worth a lot more than his services so we were going to have to figure out how he could make up the difference. I worked on bartering for that item for him while in the mean time also kept working on the second guy (we’ll call him Mr. Easy). After spending an hour or more I was able to put together a trade to get the item Mr. Pain wanted. I emailed him and let him know that I could get the item and sent him some details to see if it was acceptable to him. The deal was not closed by any stretch of the imagination. In the mean time Mr. Easy got back to me, was extremely flexible about what we could trade, and his rates were HALF of what Mr. Pain’s were. As his name implies I easily closed the deal with Mr. Easy, and set up the appointments. I also dropped a line to Mr. Pain thanking him for his time and letting him know that I ended up hiring someone else. I also let him know that I’d be happy to reconsider his services if my other deal fell through. Mr. Pain responded with the following email:
Please don’t contact me anymore with your nonsense. Energy waste when sleazy deals change with an eye blink everytime. I DO NOT NEED ANYHING FROM YOU.
Well thank you too Sunshine!!!!! So….what happened here? In retrospect I think Mr. Pain is simply not a particularly happy guy and has a propensity for distrust in the first place. So…with folks like that if you throw barter into the mix you just never know what you might get. I could choose to dwell on his negativity OR I could think about how cool it was that Mr. Easy showed up and saved the day. I choose the later. Honestly every deal that happens makes up for 10 or more that fall through. AND… this also reminds me that I really need to take good care of Mr. Easy.
So cheers to all you Mr Easys out there! It’s not worth spending any spiritual energy on Mr. Pain because he’s his own punishment anyway.
Here’s a recent email I sent this morning to a contact I have who works in the technology department of a large barter exchange.
Subject: new function for next spmartphone app
Here’s what I think is a great idea for a new function to add to the next version of your smartphone app:
How about a tax/tip calculator for folks going to restaurants that accept scrip? They could enter the food total, the amount of the tax, then the app could tell them the total amount of scrip and cash they should leave to cover tax/tip. You could even give two options for when the food total is in the awkward “in between” amounts. For example:
User Data Entered
Food Total = $25
Tax = $5
Data Returned to User
Round Down Option
Scrip = Food Total rounded down = $20
Cash = tax + amount rounded down + 15% of (Food Total + Tax) = 5 + 5 + 4.50 = $14.50
Round Up Option
Scrip = Food Total rounded up = $30
Cash = tax + 15% of (Food Total + Tax) = 5+ 4.50 = $9.50
If you want you could have some user-editable settings. Those could be: tip percentage (15% minimum) and rounding options (only show round up, only show round down, always show both). Probably the best default settings for these would be 15% and “always round up.”
I think most people mean to leave tax and a good tip when they go out, but the calculations are difficult to work out sometimes. This could be very helpful in keeping restaurants happy members and make life simpler for members as well.
I’ve recently noticed that there is a double blessing in being a barter fanatic. Of course the primary benefit is being able to trade with a bunch of folks for products/services that I probably couldn’t afford with cash. The second benefit is that I can trade with them over a longer period of time because of my fanaticism.
As a barter fanatic I can’t help but talk to people about trade. I talk to people I’ve just met about it and I talk to people I’ve know my whole life. I talk to my wife. I talk to my employees. I’m sure there are a bunch of people who don’t figure I can even talk about anything else! It also means that I talk to the people that I’m trading with about how great barter is. It means I’m always talking to them about how to get the most out of barter. I’m usually trying to give them ideas of how to use it to their best advantage. I’m convinced that my enthusiasm and occasional wisdom have helped keep some of my trading partners bartering longer than they would have otherwise. As we’ve discussed before, there is usually a limit to how much any company can barter. Because of my fanaticism I have found that when I have a barter partner who needs to reduce their barter volume, I am usually the last person that they cut off from barter.
The take away is this: Be enthusiastic about barter and try to help your trade partners be successful as well. Do your best your barter vendor’s favorite client. What comes around goes around.
Housekeeping and landscape maintenance are oft sought after services that (at first blush) seem like they should be easy to barter for, but are often tough to find. There are a couple reasons for this.
1) Most folks that barter much are small business people who are busy and own a home. Although many of them wouldn’t/couldn’t spend cash on the luxury of hiring someone to help with housework, it is a PRIME service to hire on barter. It’s a gift to yourself that you couldn’t justify in the cash world but many people don’t give it a second thought if they can barter for it. So…the first reason it can be hard to barter for is that it’s something that many people want.
2) I have a theory about these two service industries. The theory goes like this: Businesses that do housekeeping and landscape maintenance usually fall into one of two categories. The first category are those that are good and professional at what they do. Those people usually seem SLAMMED with business. I mean they are usually just buried. Unfortunately it is often hard for them to justify doing business on barter. They can get new cash clients any time they want, so why should they barter? The second group of businesses are the flakes. By that I mean, they do a marginal or poor job when they bother to even show up at all. You don’t want those folks even if the service was free so they are not of any value in the barter world either.
So…what can we do about this? If you are lucky enough to have someone good in a local barter exchange, grab them there and make sure you take great care of them! If not, then start working on recruiting one yourself. I have had some luck especially with start up businesses to do a little direct trade. If they are open to more than one account on trade you can work on recruiting them into your barter exchange. With the economy in the state that it’s in, there are more little start up service businesses than normal so ask around through your business/personal network and see if you can find someone looking to build their business who would be open to a little barter.
I recently found a fantastic way to spend barter credits for those of you that are barter-spending-challenged. I am on the school board for a small private school that is cash-poor but has several thousand dollars in barter credit. When I found out that the school was planning a silent auction and raffle I immediately realized a great use for their barter credits. I went out and bought many items on trade that they could include in the sale which effectively converted their barter to cash. Items that I purchased that were particularly popular were a year’s supply of flowers from a local florist and a year’s supply of cookies from a local bakery. We also had hard goods like jewelry and a nice keyboard. For the service-oriented items like flowers and cookies, I made sure that we had a dozen cookies and a nice bouquet of flowers on the auction table so people could see what they were bidding on rather than just having a written description. In the end the event was a success and cash was earned for the school. Although I was spending credits that the school had on-hand, this would also be a great way to donate to any favorite cause. If you know they are have a sale soon, let them know that you would like to donate an item and of course you can have a full tax write-off if the organization is a legitimate non-profit.
As we all know business is effected by supply and demand. When supply is high and demand is low you have a “buyer’s market.” Prices are often low and moving inventory can be tough. Barter is a great business strategy that can help get a business through those tough times. Trading helps you move inventory even when your customers are unwilling to part with cash. It can also help you get full value for your inventory in times when you have to discount to sell it for cash.
When something is in high demand and short supply that is a “sellers market.” At those times sellers can usually charge a premium for the product/service. It’s tough to barter in a seller’s market. Any vendors that actually have the product that you are looking for can easily sell it for cash so there is no incentive to barter. Twice recently I’ve had barter partners call me in situations like this. First it was someone in New York that was looking to trade for a generator during the power outage from flooding. More recently I’ve had a couple different potential barter partners looking for firearms since the tragedy in in Newtown. In both cases, people were trying unsuccessfully to barter for something in a “sellers market.”
My advice in these situations is simply to avoid them. Barter doesn’t work in a seller’s market so don’t beat yourself up over it. The solution is simple: barter for all the other things you need and use the cash you save to buy those items that are in high demand and short supply.