Barter — The Gift That Keeps On Giving

Dave Peterson, owner of Quality Gifts and More, sat back in his chair as the copy machine repairman gave him the bad news. The cost to fix Dave’s copy machine was sizeable enough to warrant Dave to consider purchasing a new machine. Making matters worse for Dave was the fact that two days earlier his antiquated telephone system broke down, and the hole in his office ceiling was leaking steadier and growing larger by the day.

The unbudgeted expenses that Dave was facing would have wreaked havoc on the budget of most gift basket shop owners, but these expenses did not deter Dave. His long-standing membership with ATX The Barter Co. generates enough new business to allow his trade account to accommodate these repairs. With a simple call to his trade broker, Dave was able to arrange for a new copy machine, a new phone system, and he had one of the area’s best roofing contractors lined up to repair his roof.

A lot of extra business

"The new business that I’ve received from ATX helped me to pay for these unbudgeted expenses and it really eased my cash flow,” Dave said. "I average about $10,000 of bartered business a year through my membership in ATX. That equates to more than $7,500 of additional gross profits that I wouldn’t have had if it wasn’t for ATX. That’s a lot of extra business to pass up."

Bartering is an idea as old as civilization itself. By strict definition, bartering is the cashless, item-for-item trading of goods and services. Where our ancestors might have been trading chickens for cows, today’s savvy business people are bartering hotel rooms for printing, landscaping for computers,

Gift baskets

Gift basket companies enjoy additional orders year round from barter clients

or like Dave, gift baskets for just about anything – all this through the help of a professional barter exchange like ATX The Barter Co. Part accountant, part matchmaker, today’s barter organizations exist to bring their members new business.

According to Tom McDowell, Executive Director of the National Association of Trade Exchanges (NATE), there are about 400 barter exchanges in North America, with more than 350,000 business members doing in excess of $4 billion annually. Trade exchanges like ATX The Barter Co. help cash-strapped entrepreneurs stimulate sales, develop new clients, convert excess capacity or inventory into revenue, and acquire the goods and services they need to conduct business.

The most important benefit of barter is that the new business helps to conserve cash. Businesses can trade for things they need and keep their cash for the expenses they can’t barter for. Bartering also can be an ally to small business owners looking to expand. Normally a business owner would have to go to the bank for a loan or save enough from receipts to finance the project. Barter is a way businesses can use the value of their own products and services to fund company growth.

Teresa McKnight, owner of Teremac Gifts in St. Louis, said her barter clients tend to purchase upscale gift baskets and specialty edibles from her shop, and do so year round, not just during the holidays. Teresa has also noticed a sizeable increase in new cash customers who patronize her shop as a result of referrals from her trade customers.

"I recently sent a large gift basket, on behalf of one of my barter clients, to a friend who was hospitalized after undergoing heart surgery – a friend who was not part of the trade exchange," Teresa said.

"The person in the hospital was the president and CEO of a large company. He was so impressed with the basket I sent that he had his secretary contact me to see if I could do 250 holiday gift baskets for their company. I'm now filling regular orders for this company, and they have become a profitable new cash customer." One-on-one bartering is common in the gift basket business, but joining a trade exchange or barter company, (a group of businesses who barter among themselves), can give you more flexibility and opportunity. next page >

GIFT BASKET

Barter — The Gift That Keeps On Giving