Connecting – Part III: Trade Exchanges

As mentioned earlier, most of my clients come from referrals. A few come from search engines and expand my circle of connections greatly.

The third way clients connect with me is through barter exchanges. I belong to two such exchanges: Alamo Barter Corporation (ABC) and ITEX.

I originally joined ABC back when I owned my interior landscaping company. I had done some direct trades with clients – an electrician did some work in my office in exchange for plants – but most of the time, direct trades aren’t effective because the two parties don’t need each other’s products or services in the same amount.

Trade (or barter) exchanges serve as a middle man, almost like a bank. When I do work for a client referred by a trade exchange, I don’t get paid in cash. Instead, I get “trade dollars” credited to my account with the exchange. I then use those trade dollars to purchase items from other members.

For example, I’ve done several projects for Sky-View, a company that manufactures, sells, and leases advertising balloons and searchlights. Since I work from a home office and don’t need to attract customers to a physical location, I have no need for Sky-View’s products. But when I write a letter or edit marketing materials for Sky-View, I charge them the same amount in trade dollars as I would in cash. Then I use the trade dollars to pay for dental work, electrical repairs to my home, or other goods and services available from the exchange.

The difference between this method of connecting and referrals and search engines is that the trade exchanges charge fees for their services. However, I have always found that the costs are reasonable for the added business. And trade business can lead to cash business, either through sales to trade customers of items not offered on trade or through referrals.

Successful trading requires planning and management. Each member of the exchange can specify what products and services are available for trade and the maximum amount of trade that will be accepted in a time period.

When I was in the interior landscape business, I sold “used” plants on trade. When we removed plants from a lease account, the plants were often healthy. The plant might have lost lower leaves or be flat on one side from being against a wall, but most homeowners found the plants perfectly acceptable. Customers were thrilled to get a plant that looked fine to them for half the retail price, and my company was able to generate income from assets that had already been expensed when they were leased. The fees I paid to the barter exchange were a bargain compared to the extra income from sales that didn’t cost me anything.

Now in my freelance business, I offer writing and editing services to trade clients under the same terms as cash clients. I watch carefully to be sure I’m not spending too much time on trade business – after all, the utility and phone companies don’t accept trade dollars. And I quit taking trade business if my balance starts to build up or if I have more work than I can handle. But often jobs for trade clients are small projects that I can easily fit into my schedule: a letter, a short article, a simple brochure.

I’ve made some excellent and long-lasting connections through trade. My accountant, Jim Oliver & Associates, is one of the best there is, and I’ve paid him in trade dollars for many years. Of course, income in trade dollars is taxable just as cash, and business expenses paid in trade are deductible. I’m glad to have someone who understands trade doing my taxes.

Dr. J. D. Blackburn of Thousand Oaks Clinic, an outstanding physician, has been my doctor for probably 20 years or more. I pay my deductible and insurance co-payments in trade. And “Dr. B” has also been a client, both in my interior landscaping business and in my freelance writing business.

If you haven’t ever done trade business, you might want to take a look. You can connect with great clients and vendors/service providers.

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