Comes To Life In Business
By James Harvey Stout, Former Writer For BarterNews
Bartering offers various
benefits for businesspeople. Those benefits are explored in
It allows us to pay for many expenses without spending cash. We will
see how we can barter for specific needs, e.g.,
advertising and employee benefits.
It attracts customers who do not have cash (or would hesitate to
spend it) but who can give us something which we can
use: goods or services or barter-club units. Store
owners -- who might not have a spare nickel -- finds
that bartering makes each item on their shelves as good
as gold, because they can barter them away in a
tight-money economy. After all, money is a lousy
lubricant within an economy: it can run short in the
midst of plentiful goods (i.e., shelves and warehouses
full of goods), and in the center of eager, would-be
workers (who cannot find a moneyed employer). Our money
system is worse than a failure; it is a liar, because it
makes paupers out of inventory-rich businesspeople, and
it makes lazy losers out of empty-scheduled people who
want to supply services.
Barter is popular among
Bartering has been done by many corporations, including Xerox, Shell
Oil, Hilton, Ramada Inns, Chrysler, National
Semiconductor, Pan Am, Continental Air Lines, General
Motors, General Electric, Remington Rand, Union Carbide,
Westinghouse, McDonnell Douglas, Pepsico, Dow Chemical.
"Sixty percent of all companies on the New York Stock Exchange who
manufacture consumer goods use barter." (Moreton Binn,
president of Atwood Richards, quoted for the first
edition of this book, in the early 1980s)
Ten billion dollars in corporate deals were bartered in 1980.
"At least one-half of all the large companies in America have set up
a barter division within their own company to help them
move merchandise more effectively," said M.J. McConnell,
president of Business Exchange, in 1982.
Many deals are handled by professional barter brokers, such as
Robert J. Murley, president of Full Circle Marketing
Corporation, who described some of the trades which he
M.J.M. owns a
restaurant, a motel, apartment houses, a ranch, a
farm, hundreds of acres of land and a multi-million
dollar business -- all of which were acquired within
a few years by barter.
D.G. owns a dozen
different publications, a large pharmaceutical firm,
a large mail order firm, two printing plants, and
several other multi-million dollar businesses. All
were secured through barter.
M.B. acquired five
of the world's largest cruise ships. The entire
company, which now grosses $6 million per year, was
originally built through barter.
Bartering allows small companies to trade with large corporations.
Some members of barter clubs are using the clubs to band
themselves together so that they have enough assets to
catch the attention of large companies; then those large
companies can pass along some of their surplus
inventories through the clubs. For example, Xerox joined
a barter club (Barter Systems) to sell $2 million worth
of difficult-to-sell equipment; Xerox had tried to
barter the copiers on its own, but then found that
Barter Systems could do the job more effectively to get
goods and services in return.
Barter is popular in
In the early 1980s, experts were estimating that 40 percent of all
international trade was being done on a barter basis.
General Motor has its own Motors Trading Corp., a
subsidiary which negotiates countertrades in foreign
countries and then markets the received goods, such as
metals, machine tools, agricultural products, etc.
General Electric and Sears also have their own trading
It avoids the problems of currency exchange. M.J. McConnell,
president of Business Exchange, says, "Countries are
bartering as a routine way of doing business today
because of currency problems. The dollar used to mean
something in world currency markets, but it's become
less valuable. So have other currencies. The trend is
for countries to accept goods and products instead of
money in international trades." (Passages.
September, 1978. 'Bartering: A Bird in Hand ... Is Just
the Beginning," by Arthur Garcia.)
It can be used for many goods. U.S. companies have traded rice,
tobacco, rye, cotton, wheat, barley, corn, and grain
sorghums for materials like aluminum, tin, asbestos,
bauxite, magnesium, and oil from other countries. One of
the most frequently bartered items is oil; for example,
Iran has traded its oil for aircraft (including U.S.
F-16 fighters while the Shah was still in power), other
military equipment, entire industrial products -- and
the construction of a $2.1 billion naval base at Chah
There are many ways in
which we can profit from bartering. In other chapters, this
book explains how to set up our own trades, or start a
barter club. We can also consider these possibilities for
profiting from barter:
Specialization. For example, some real-estate brokers specialize in
Employment with a barter club. Barter clubs need people who are
skilled in management, sales, public relations,
secretarial work, etc. A salesperson might earn 50
percent commission on the membership fee of each new
member; at some clubs, the membership fee is about $300.
At one barter club, the management positions included
General Manager, Franchise Director, National Sales
Manager, Corporate Manager, and Vice President
A consultant for new
barter clubs. If we have had experience in operating
a barter club, we can explain the process to people
who are starting their own club.
A consultant for
people who want to barter. Some people don't know
how to do it; we can explain the ideas from this
book and from our experience.
A consultant for
businesses. In 1982, Robert C. Newman was charging
$1,500 for a one-day, one-time consultation. When
the actual exchange took place, he would charge a
fee equaling the value of 15 percent of the bartered
goods or services. Newman said, "In addition to
showing you how to increase your sales, we'll show
you how to operate your expanding business at a
fraction of your current costs. We'll show you how
to buy advertising in national and regional media
(television, radio, and publications) at little or
no cost. Buy printing, art, office supplies,
transportation, medical and legal services, employee
benefits, and whatever your particular business
requirements demand, again at little or no cost.
Personal requirements including vacations, cruises,
dining in the finest restaurants, entertainment,
etc., are also satisfied by the same means. Build
your personal estate and enhance your investment
program in real estate, business, precious stones,
precious metals, etc. Reduce your accounts payable
and personal debt. Reduce your unwanted or excess
inventory by bartering them at full value -- or
more. We'll help you pyramid your corporate and
personal wealth and reduce your debt to little or
nil -- and you'll vastly improve your standard of
living in the process."
Public speaking. As an expert on bartering, we can sell our
knowledge through seminars, after-dinner speeches,
workshops, or college classes.
Multiple memberships. If we join two or more clubs, we will have to
pay for the extra initiation fees and yearly dues. But
we can use the multiple memberships for a profit; we
would stay alert for any shortages or needs within one
club or another. For example, if Jack needs some tires
for his tractor and he can't get them from Club A, we
would use our units from Club B to buy them from a Club
B member; then we would sell them to Jack for his Club A
units (and we would charge a commission).
Brokering. As a broker, we would set up one-to-one deals between
other people or other companies. For example, a hotel
owner might call us to trade some rooms for advertising;
we would contact a newspaper or radio station which
could use the rooms for its out-of-town visitors. Then
we would set up the trade, and take a 15% commission
from both parties. One broker offers this option:
instead of receiving a 15% commission in cash, he
will accept a 30% commission in the company's goods or
services, with which he can set up his own deals; for
example, instead of taking $1,500 in cash, he would take
$3,000 worth of hotel rooms.
General contracting. As a general contractor, we would create a
large project, and then find individual contractors who
would perform aspects of the job; we would be paid in
cash, but we would pay our contractors by bartering
(plus cash to cover their cash-only expenses). This type
of contracting is possible in any project which requires
more than one type of skill; for example, home-building,
home-restoring, ad campaigns, and public events (such as
a seminar series, an art or music festival, etc.).