Meeting and incentive businesses can utilize barter to boost sales production. It's easy, it's smart, and it works like a charm.
Savvy meeting and incentive professionals are discovering that bartering is a great vehicle for moving excess space, attracting new customers, and generating barter dollars that can be used for advertising and other business expenses.
How It WorksIn its simplest form, bartering involves an equal trade. One business swaps an item or service for another. And through professional barter exchangeswhere members pay a commission fee for goods or services tradedmore complex trades are possible.
Here's how a barter transaction is completed:
1. A business lists an item or service for trade through the barter exchange.
2. In return, the business receives a trade credit based on the dollar value of the item or service offered.
3. It can then use those trade credits to "purchase" goods or services offered by other members. As a result, that business is paired with a rich, varied network of actively bartering businesses.
What Trading Can Do For YouBartering enables meeting and incentive businesses to trade for the goods and services they need. Trading downtime or excess inventory is a particularly good way to accumulate barter credits.
If you happen to have excess inventory, you can liquidate the merchandise for a reduced profit. Or, as an alternative, you can trade that merchandise through a barter exchangeand often receive trade credit for its full wholesale value. You can then use those trade credits to purchase the services or products you need to plan your next meeting.
Gaining New CustomersBartering can also provide independent planners with a new vehicle for marketing your business. Barter exchanges bring buyers and sellers together, potentially creating a new customer base. And barter can positively impact your bottom line, since companies that actively barter may do as much as 5 to 10 percent of their business annually through trades.
How A Barter Exchange FunctionsBarter exchanges, which typically charge a one-time membership fee, offer the advantage that they don't require an even trade. You can use credits accumulated for one item to trade for several different items that together add up to your total credits.
Be aware that barter and cash transactions are the same in the eyes of the Internal Revenue Service. Both are taxed equally. In fact, bartering exchanges must report goods and services sold through barter to the IRS.
Like sales, bartering offers no guarantees. Some trades happen quickly, others take some time. Also, the quantity of certain goods and services available may fluctuate during the year.
You must weigh the disadvantages against the advantages, but bartering can turn your downtime or excess inventory into valuable commodities. It increases sales while enabling you to purchase the goods or services you need without dipping into your cash.
Don Mardak is founder and CEO of International Monetary Systems Ltd., a leading barter organization. Visit www.imsbarter.com to contact him.Originally published June 01, 2008For more ideas, tips, and tools for better meetings and events,
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