Marketing: Fair Trade

Come out ahead when you barter products and services.

Bartering can be used for business goods and services--like graphic design, legal advice, office supplies--or for personal goods and services such as dental work, designer clothes and fine dining. And it makes sense from a business operations standpoint, “because few businesses run at full capacity, [and] barter transforms otherwise idle profit potential into a new income source,” explains Steven Van Yoder, whose article “Let’s Trade!” appears in the August 2007 issue of DAYSPA . However, before you accept your island getaway, be smart about what you barter because the IRS views barter income as an equivalent of cash expenses.

One way to get the most out of bartering is to join a barter exchange, a company that forms trading networks between businesses. As Van Yoder explains, these exchanges operate like credit card companies by offering barter credits, monthly statements and a membership directory in exchange for a 5% to 10% commission and initiation fee. Use Van Yoder’s suggestions to help you select the right barter exchange for your day spa:

• Compare barter exchanges in your community. Assess services, fees and investigate the member listing to make sure it’s a fit for your spa.
• Determine how much advertising and promotion the exchange does for its members.

• Get a list of active members, not those on standby or hold status.
• Ask members if they’re satisfied with the exchange, and talk to them about the pros and cons of doing business with the exchange.
• Contact business reference resources in your area, such as the Better Business Bureau and Chamber of Commerce.
• Find out about conflict resolution policies, and ask whom you will contact if you encounter a problem.
• Ask whether the exchange issues a line of credit.

For more information about barter exchanges, visit the National Association of Trade Exchanges and the International Reciprocal Trade Association.

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