| "body"> | | | | Understanding a supplier's cost breakdown can |
| Companies of every size and description, from | | | | also help in negotiating a direct partial barter deal. |
| the entrepreneurial startups to multi-national | | | | For example, a print shop buys paper and ink for |
| giants, are now acquiring needed goods and | | | | cash, but rarely operates at 100% capacity. This |
| services through barter, corporate barter and | | | | down-time makes no contribution to the printer's |
| countertrade. Here's how companies of any size | | | | fixed costs. Therefore, a new customer could |
| can start to save money by looking for bartering | | | | negotiate to cover the fixed cost of paper and |
| opportunities with their suppliers... | | | | ink with a cash payment, while the rest of the |
| Barter Rule #1: | | | | job would be payable in barter. |
| Virtually anything your company pays cash for is | | | | Barter Rule #3: |
| a prime candidate for utilizing barter. Start by | | | | Negotiate only with the company owner or sales |
| evaluating every product or service your | | | | manager. A supplier's salesperson is not the |
| company buys from the point of view of a | | | | person to talk to when desiring a barter |
| barter opportunity. | | | | arrangement, for two reasons. First, they are not |
| Could you consider exchanging your company's | | | | able to make the decision, and second, it would be |
| product or service as payment, or partial | | | | counterproductive cutting into his/her commission. |
| payment, to a supplier/vendor? This is direct | | | | However, the firm's owner or sales manager can |
| barter, and involves an agreement between a | | | | understand the value of conserving cash and |
| buyer and seller that all or part of a bill will be paid | | | | establishing a long-term relationship based on using |
| through trade-in-kind rather than cash. | | | | barter in the mix. |
| If you cannot come up with a good fit for direct | | | | Then if it makes economic sense, offer a supplier |
| barter, then explore indirect barter. It's done | | | | preferred status for agreeing to take partial |
| through an entity called a trade exchange or | | | | payment in trade. The strategy for success is to |
| barter company, where different businesses | | | | undertake a small transaction first, thus allowing |
| (usually locally) who are members of the barter | | | | participants to become familiar with how barter |
| company, will buy and sell to one another using a | | | | can work for them. And then build on that |
| trade dollar. One way to determine what goods | | | | success. |
| and services are available is to look a trade | | | | Barter Rule #4: |
| exchange's directory. | | | | Keep exact records of barter arrangements on |
| Barter Rule #2: | | | | your company books. Make sure at least one |
| Be sure you fully understand the economics of | | | | person in the accounting department understands |
| your own business, and that of suppliers who are | | | | exactly how these agreements are to be |
| potential barter candidates. Unless you do, you | | | | accounted for, and give that person |
| could wind up negotiating barter deals that waste | | | | responsibility--and the necessary tool--for booking |
| company assets. Or, you might turn down a | | | | them properly. |
| barter endeavor that could be valuable in the | | | | When you follow these 4 rules you will find that |
| mistaken belief that the terms are unfair. | | | | barter can boost your profits and cut costs. |