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I was talking to a retailer just the other day and she voiced her frustration over her lack of cash for new fixtures, advertising and other services. She had tried to get a bank loan, but we all know how little banks love retailers. I began telling her about another answer to her problems... If I have your attention, I need an open mind now. What if I told you that you could gain a whole new pile of additional customers and sales you don't have now? Sound good so far? Now what if I told you that you could take those additional sales and convert them into the very things you need? Need advertising, printing, vehicle repair, cleaning services and even fixtures? Seriously Consider Barter To Enhance Cash Flow! Any business with a healthy mark up of at least 40% or more (meaning your cost is 60% or less of your sales price) should seriously consider barter. Service businesses where you have a healthy profit, or the labor portion of your bill might be reduced by your own physical labor as the owner, should also consider this strategy. Bartering is not a new concept. Typical bartering between two people or two businesses has been done for hundreds of years and even organized bartering has been popular for more than two decades now. Barter Means Additional Sales But barter today is better and more important than ever. Today there are organized barter exchanges that open up so many more options and make finding trade partners so much easier. In my own business upon joining my first barter organization, I was certainly skeptical at the beginning. I joined about October and by late November I had fellow barter members whom I had never heard of showing up at my business and ordering thousands of dollars of product from me. I literally had thousands of dollars of product walking out by stores without a penny being paid to me. I became very nervous and prayed that I had not gotten involved in some kind of scam. As I got closer to Christmas, I had over $15,000 in trade credits due to me. My immediate concern was, "What if I couldn't spend these credits? I'd be sitting there with $15,000 in worthless trade credits." My natural reaction was to cut off any further trade business, which I was told was within my rights as a member. After Christmas when the dust had settled and I had time to investigate further, I actually began trying to spend my trade credits and I was amazed at how easy it was and how much the additional spendable funds which I would have never had allowed me to buy advertising and other things I needed for my business. I had my floors cleaned and waxed. I repaired my air conditioner. I had my delivery van custom painted and lettered. I even began a regular service with a new exterminator where I had been previously paying out cash each month. The whole thing seemed like a godsend.


While I didn't totally understand at the time, my barter or trade organization was acting as a broker and a bank. They were finding me new customers I never had previously and providing a trading platform or vehicle with a bookkeeping system to track all transactions for my business and the other members. The trade organization or "exchange" really does play an important role because they provide the record-keeping, brokering expertise and monthly statements to each member... The organization's members buy and sell products and services to each other using an internal currency (so to speak) known as barter or trade dollars. And each participating member has an account that is debited when purchases are made, and credited when sales are made. Just like a charge account. The most important part to me was that they actually served as a new sales arm of my business while they collected a percentage from me for their additional sales transactions. With the advent of trade exchanges or organized bartering, it is no longer necessary to find a business that is willing to trade "one-on-one" with your business. There is no need for concerns over one service or product being worth more than the other-because it is now a system of credit and debit - and you don't even need to buy from the business or person who buys from you. You simply need to go to your barter exchanges list to determine who sells what you want. You then go to them and purchase what you want by spending trade credits that become like a charge account balance. When another business comes to your business to buy, their purchase is credited to your same account. Aside from giving you new potential customers who are coming to you now because you except trade, these new trade credits allow you the trade dollars to purchase other services or equipment you may not have had money for in the past. Barter today is simply one more solid tool to help your business increase its efficiencies by monetizing its unused capacity or excess inventory. The worldwide organized barter exchange and trade industry is now estimated at over $20 billion a year industry and is used by tens of thousands of businesses and individuals. The advent of the Internet has helped even more. Organized barter has grown to the point now where virtually every country has at least one formalized barter and trade network of some kind. In an average city like St. Louis for example, there are at least three barter organizations. True Benefits For Retailers With Barter If you have a decent size trade or barter organization in your town, they have the power of bringing you, or directing a myriad of new customers to your new business. All of their members are people or businesses that will use your business (if for no other reason) because they can do business with you in trade. They will buy from you at your regular retail price and when you sell your product to them, all you will have invested in that item or service is your actual cost. Now you can go and buy supplies and services you need for the regular selling price of those items, however now you will only have your cost invested in those items and you are buying those items or services with dollars (trade dollars) you would have never received had you not been in the trade organization. Who wouldn't like to pay for a web site service or a furnace repair with dollars they never would have had, to begin with. That frees up your cash for other things you need, or increases you profits. It's all legitimate with the IRS, as your trade organization will keep tabs on your trade sales as well as your trade purchases (just like your would keep track of purchases and debits on a credit card statement.


You'll pay the trade organization a percentage of your purchases (probably 10 or 12%) but it's still a big plus for any business with a healthy mark-up. Just make sure that you join a barter organization that has lots of members to purchase the services and products you need. Check them out with the better business bureau and ask other members how they like doing business in the organization. THEN DO IT!! Barter Generates New Customers When you are a member of a barter organization the members will now be coming to you because you take trade and your competition doesn't. Members will generally go where they can spend their trade dollars first (especially over cash), so you have a new built in base of customers! The barter organization in effect becomes like one more commissioned sales organization for you. They become proactive in helping you find business since they only get paid if you have barter activity. Barter members call into the exchange brokerage with things they need and the brokers match those needs with other members that can fill them. Barter Conserves Cash and Increases Profits for Your Store Conserving cash is more important than ever in an economy like we're going through right now. If you had to purchase a copier for $1000--what would you rather do? Write a check out for $1,000 or pay with an equal amount of your product/service at full price to a NEW customer? Barter really does help increase your buying power because you end up buying merchandise at your cost of goods. Buying Advertising for Your Store With Cash You Never Had One of the really great advantages of barter is that you can use your newfound trade income to purchase advertising. By turning your excess inventory into brochures, print advertising, TV, or internet services your company can maximize its marketing efforts and improve its bottom line with CASH paying customers. Advertising is one of the best and easiest things you can do with your barter dollars. There are a myriad of choices with barter and you won't have any trouble finding them! Provide Some Benefits or Incentives to Your Employees Chiropractic Services, dental services, gift baskets and restaurant certificates are all possible benefits or rewards you can give your employees for a job well done. You could even award a trip to the Caribbean with barter. Could you afford these perks out of your current cash flow? No Complicated Recordkeeping The barter organization will provide the control, record keeping and administration for you and your accountant with a monthly statement detailing each sale and each purchase. Help Cycles of Seasonality Any business struggling with the ebb and flow of having a seasonal business can use barter goods and services during a slow period. Your New Barter Customers Help Expand Your Retail Sales Base


Barter customers can still bring you all of the cash referrals that your present customers bring. If you treat your barter customers with the same custom service and regular prices, as you would offer everyone else, you should gain new cash paying customers too. Word of mouth is still word of mouth, regardless of whom it comes from. Check out your local barter organization today and ease into barter slowly until you're comfortable.

Rich Gordon (author of the new book, "A Line Out The Door") spent over 24 years at the front lines and the executive suites in a retail career that has spanned every area of the industry from a large mass merchandiser, midsize dealer organization for an innovative and up-and-coming computer manufacturer, to owning his own retail stores. Along the way, Rich turned a motley group of computer dealers into true retailers and later took his own business to multiple stores, serving an upscale and celebrity clientele that spawned two other businesses: one serving Fortune 500 clients-and a wholesale operation that supplied other retailers. Through his educational website/blog and various writings, Rich (better known as Retail Rich) teaches specialty retailers how to take their stores to a new level of performance and profits while staying 100% true to the shop of their dreams. Whether you want to be more creative, more profitable or strengthen your business by separating yourself from the competition, Rich can help with humor as well as tough love. If you want to be taken seriously as a retailer today, follow him on line at http://retailrichez.com Š2011 Retail Redefined and retailrichez.com. All rights reserved.

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