Bartering

In the early years of my business I was often contacted by advertisers who wanted to exchange services. As money was often in short supply, this was appealing. However, I made a few mistakes and the deals were seldom as good as they first appeared.

The biggest mistake I made was to exchange my services at cost. For example, if a job would cost me $500 in labor and materials, I would ask for $500 of advertising. This was flawed in several respects.

First, the exchange did nothing to recover my overhead. Consequently, these jobs actually cost me money. Second, I was not getting my full price so it was essentially the same as offering a huge discount. There really was no benefit to me. Third, I found myself advertising in places I probably wouldn’t have if not for the bartering deal.

After doing this a few times I changed my strategy and began asking for my normal price in exchange. The advertisers were less eager to barter, but I was at least getting the right price. However, I was still advertising in the wrong places.

Bartering can be a good deal, if done properly. If you get your normal price (or close to it) you are still covering your overhead and profit. In addition, you should be certain that you would be willing to pay actual money for the advertising. Otherwise, it will turn into a waste of your resources.

© BEP Enterprises Incorporated 2008