Bartering Services

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 booth 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 necessary.

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 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 both).

You can run a small display ad in your 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.
ABC BARTERING (123) 456-7890

When respondents to this ad call, you handle them just as a banker handles someone opening a new account. You explain how your club works: 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 his boat over a three month period. If you have a depositor with garage space for rent and needing printing services, you have a transaction.

However, let us say you have no "perfect match" for this depositor. On your list of depositors, you have those people: - a dentist who is 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 a good memory are vital to this kind of business, especially if you are 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 does not want any printing services.

You simply tell her to hang on because you are currently in the process of contacting the dentist who will do the work on her kids' teeth. And so it goes in the operation of a bartering club.

Some of the larger bartering clubs (with several thousand 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 computer listing, and then to shop, using credit against their deposits. The smaller clubs usually publish a weekly "traders 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 the 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, and spent on merchandise or services offered by the club.

You will need a club charter, a board of directors or officers, and 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 will also need a membership booklet or at least an addenda sheet to your contract, explaining the rules and bylaws of your club.

It is 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 any large stationery house or commercial print shop.

Two things are important to the 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 exclusively.

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 on 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 have sent out the direct mail piece, be sure too 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 gives 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 your literature.