Bartering is not negotiating!
Bartering is "trading" for a service, or for the
goods you want. In essence, bartering is simply buying or
paying for goods or services using something other than money
(coins or government printed paper dollars).
Thus defined, bartering has been around much longer than
money as we know it today. Recent estimates indicate that at
least 60 percent of companies on the New York Stock Exchange
use the principles of bartering as a standard business
practice. And congressmen barter daily to gain support for
their pet projects. U.S. aircraft manufactures barter with
foreign airlines in order to close sales on million dollar
contracts. Perhaps you have experienced at one time or
another in your life a friend saying, "okay, that's one
you owe me..." Basically, that's bartering.
The reason bartering enjoys renewed popularity in times of
tight money is simply that it is the "bottom line"
method of survival with little or no cash. In times of high
interest rates, cash in anyone's pocket is indeed a very
precious commodity, and bartering is even more popular.
Bartering affords both the individual and the established
business a way to hold onto cash while continuing to get
needed goods and services.
In addition to saving a business borrowing costs, bartering
can improve its cash flow and liquidity. For anyone trying to
operate a successful business, this is vitally important, and
for individual families in these times, it makes possible the
saving of cash funds for those purchases where cash is
To start and successfully operate a bartering club, YOU
MUST THINK IN TERMS OF A BANKER. After all, that's precisely
the reason for your business---to receive and keep track of
people's deposits while lending and bringing together other
people wanting or needing these deposits.
So your first task is to round up depositors. As a one-man
operation, you can start from your own home with nothing more
than your telephone and kitchen table, but until you get
helpers you'll either be very small or very busy (probably
You can run a small display ad in you local newspaper. A good
ad would include the following ideas:
NEW BARTERING CLUB!
Trade your expertise and/or time for the
merchandise or services you need. We have
the traders ready---merchandise, specialized
skills, buyers too! Call now and register.
When respondents to this ad call, you handle them just as a
banker handles someone opening a new account. You explain how
your club work; Everyone pays a membership fee of $100 to
$300, and annual dues of $50 to $100. The depositor tells you
what he wants to deposit, perhaps $150 worth of printing
services, and what he's looking for in return---storage space
for a boat over a three month period. If you have a depositor
with garage space for rent and needing printing services you
have a transaction.
But let's say you have no "perfect match" for
this depositor. On your list of depositors you have a dentist
who's offering $500 worth of dental work for someone to paint
his house. A woman with a garage to rent in exchange for
dental work for her children. An unemployed painter willing
to paint houses in exchange for a side of beef, and a butcher
who wants to trade a side of beef for advertising circulars.
Remember, when a new member joins your club, he makes a
deposit and states his wants or needs. In the above example,
you have a typical bartering club situation. Your service is
to spend or line up those deposits to match the wants or
needs of the club members.
An affinity for people and good memory are vital to this kind
of business, especially if you're running a "one-man
show." Generally, when you have a buyer for one of your
depositors, you notify him or her right away with a phone
call. You simply tell her that Club Member A wants to rent
your garage. She tells you fine, but she doesn't want any
printing services. You simply tell her to hang on because you
are currently in the process of contacting the dentist who'll
do the work on her kid's teeth. And so it goes in the
operation of a bartering club.
Some of the larger bartering clubs (with several thousands
members), simply list the deposits and wants or needs on a
computer, and then invite their members to come in and check
out the availabilities for themselves. Others maintain
merchandise stores where the members come in to first look at
the current listing, and then shop, using credit against
their deposits. The smaller clubs usually publish a weekly
"trader's wanted" sheet and let it go at that.
These methods all work, but we've found that instead of
leaving your members to fend for themselves or make their own
trades, the most profitable system is to hire commission
sales people to solicit (recruit if you will) new members,
specifically with deposits to match wants and needs of your
present members. These sales people should get 20% of the
membership fee from each new member they sign, plus 3 to 5
percent of the total value of each trade they arrange and
close. This percentage, of course, to be paid in club
credits, spendable merchandise or services offered by the
You'll need a club charter, a board of directories or
officers in many areas, a city or county license. Check with
your city or county clerk for more information on these
requirements. You should also have a membership contract, the
original for your files and a duplicate for the member. In
most cases you can write your own, using any organization
membership contract as a guide, or you can have your attorney
draw one up for you. You'll also need a membership booklet,
or at least an addenda sheet to your contract, explaining the
rules and bylaws of your club. It's also suggested that you
supply your members with consecutively numbered "club
membership identification cards" for their wallets or
purses. Some clubs even give membership certificates suitable
for framing. You can pick these up at a large stationary
house or commercial print shop.
Two things are important to make up of the membership package
you exchange for membership fees:
1. It must be as impressive as you can make it.
2. It must be legal, while serving your needs almost
Basically, you should have at least 100 members before you
begin concentrating on arranging trades. As stated earlier in
this report, the easiest way to recruit new members is to run
an ad in your newspapers, and perhaps even on your local
radio stations as well.
Follow up one these inquiries with a direct mail package,
which would typically consist of a brochure explaining the
beauty and benefits of being a member of your bartering club,
a sales letter, and a return reply order form. After you've
sent out the direct mail piece, be sure to follow up by
phone, and if necessary, make a call in person as any other
sales person would do.
Another way of recruiting new members is via the Amway
Introduction Party Program. Allow a certain number of club
credits for each party a club member arranges for you. Insist
on at least 10 couples for each party, and then as the
"Attraction of the Evening," you or one of your
salespeople give a motivation-benefits available recruiting
talk. Be sure you get the names, addresses and phone numbers
of everyone attending, and be sure that everyone leaves with
If all those in attendance at these parties do not join,
then follow up on them, first by phone and then with personal
sales presentations. Once you've got them interested in your
club, do not let go or give up on them until you have signed
them as members. Another thing---take a page from the Party
Plan Merchandiser's Handbook, and look for those who would be
most likely to want to promote a similar party for you.
Offer them an item of merchandise they might be particularly
interested in, and club credits if they'll not only join, but
also stage a party for you.
A bit more expensive, but just as certain of success are free
seminars. Rent a large meeting room, advertise in your local
papers, and then put on a hard-sell recruiting show. Such a
plan is very similar to the party idea, but on a larger
scale. An inside tip: Whenever you stage a recruiting party
or seminar, always "pad the audience" with your own
people, who will of course lead the way for those you're
trying to recruit.
As stated earlier, you can start operations out of your home,
but working out of your home has a number of growing
inhibiting factors. After a certain period of time, the
growth of almost any kind of business is retarded when it's
operated out of a home. So just as soon as you can possibly
can afford to, move into an office of some sort. Keep your
eyes open and consider the feasibility of sharing an office
with an insurance agent or real estate broker. Check your
newspaper classifieds for businesses willing to share office
space or rent desk space or other office amenities.
This is the kind of business that demands an image of
success. You just can't keep people from "dropping
in" when you're operating strictly on a local basis. And
when you attempt to hire sales people, a place of business to
work out of is just as important to them as how much
commission they're going to receive. Image is super
important, so don't neglect it!
Ideally, you should have one salesman for every 50,000
people in your area. Run an ad in your local newspaper, and
also list your needs you state's employment service. Hire
ONLY commission salespeople. Give them a percentage of the
membership fee for each new member they sign, plus a small
commission on each trade deal they close.
Assign each of your people specific territories, and insist
that they call on potential commercial accounts ranging from
the "hole in the wall" rubber stamp shop to
magazine publishers and commuter airlines. There's plenty of
business available in every city or metro area in the
country. Encourage your sales people to be creative and
imaginative when calling on prospects. Then, be sure that you
keep an open mind and listen to their wild trading proposals
(some "wild proposals" have been known to become
Schedule "open discussion" sales meeting every
morning before salespeople "hit the bricks." have
each of them report on their selling efforts from the day
before, and present to you a written list of prospects they
plan to call today. Set up sales motivation workshops to be
held at least once a month, and at least once a week schedule
a motivational speaker or play one of the widely available
success/inspirational tapes as a closing feature of your
morning sales meeting. Stock sales success books and
encourage your people to borrow them, take them home and read
them. Your sales people will make you rich, but only if you
turn them on and keep them flying high with personal
Should you or should you not accept installment payments from
new members? Yes, by all means! But only when you've got
their signature on a contract drawn up for your benefit and
deemed legally binding by your attorney. What about bank
cards? Yes indeed! In fact, you'll find that your capability
of handling bank cards will double or even triple your sales.
Precisely how much are you going to need in actual start-up
costs? We would estimate at least $500 for your printing and
legal fees, unless you can trade charter memberships in your
club for these services. Time wise, you're going to be
putting in 18-hour days, and 7-day weeks until you get those
first 100 people signed. And there won't be any money for
salary or long-deserved vacations from these first 100
members you sign. You'll need it all for advertising,
membership packets and office set-up. However, if you can
really work at it, you should be home free in six weeks or
less. Then you can set up your office, hire a couple of girls
to handle the paperwork, and take on a salesperson or two.
Reputation and success in matching offers to wants will be
just as important as image, so give it your all. Don't give
up; stand behind the implied, as well as the real promises
you make to your members.
A couple of final notes: Should you offer a guarantee of
satisfaction? Only so long as it makes money for you, and you
can back it up. There's not a person in business anywhere who
enjoys refunding a customer's money. But don't forget that
the existence of your business depends on service. The more
you project an image of a "people pleaser," the
greater success you're going to achieve. This is definitely
not a business for someone who doesn't enjoy "waiting
on" people. You've got to like people, enjoy helping
them, and want the inner satisfaction that comes from selling
This is definitely a growth business. Bartering Clubs in
metropolitan population areas of 300,000 or more are
reporting incomes of over a million dollars. The average in
cities of 100,000 population is about $150,000 per year.
Actually, no experience or special training is required. The
operation of a Bartering Club is equally suited to women or
men. Both do equally well as salespeople. It's a business
that fills a need, and a kind of membership program people
will stand in line to be part of, once they've been
introduced to the benefits.
This is the plan. It's going to take your time and effort
to get organized, but after your initial work to establish
this business, you can become quite wealthy in a relatively
short time. Read over this plan again; determine if this is
"the one" for you, and then go all out. It's up to
you, and all it takes now is action on your part.
One of the best of all the available sources of ongoing
help and knowledge about bartering is a quarterly publication
entitled BARTERING NEWS. Write and ask for a sample copy. The
PO Box 3024
Mission Viejo, CA 92690