How To Start And Operate Your Own Bartering Club

Bartering is not negotiating! Bartering is "trading" for aservice, or for the goods you want. In essence, bartering,bartering is simply buying or paying for goods or services usingsomething other than money (coins or government printed paperdollars).
Thus defined, bartering has been around much longer than money aswe know it today. Recent estimates indicate that at least 60percent of companies on the New York Stock Exchange use theprinciples of bartering as a standard business practice. Andcongressmen barter daily to gain support for their pet projects.U.S. aircraft manufactures barter with foreign airlines in orderto close sales on million dollar contracts. Perhaps you haveexperienced at one time or another in your life a friend saying,"okay, that's one you owe me..." Basically, that's bartering.
The reason bartering enjoys renewed popularity in times of tightmoney is simply that it is the "bottom line" method of survivalwith little or no cash. In times of high interest rates, cash inanyone's pocket is indeed a very precious commodity, andbartering is even more popular. Bartering affords both theindividual and the established business a way to hold onto cashwhile continuing to get needed goods and services.
In addition to saving a business borrowing costs, bartering canimprove its cash flow and liquidity. For anyone trying to operatea successful business, this is vitally important, and forindividual families in these times, it makes possible the savingof cash funds for those purchases where cash is necessary.
To start and successfully operate a bartering club, YOU MUSTTHINK IN TERMS OF A BANKER. After all, that's precisely thereason for your business---to receive and keep track of people'sdeposits while lending and bringing together other people wantingor needing these deposits.
So your first task is to round up depositors. As a one-manoperation, you can start from your own home with nothing morethan your telephone and kitchen table, but until you get helpersyou'll either be very small or very busy (probably both).
You can run a small display ad in you local newspaper. A good adwould include the following ideas: NEW BARTERING CLUB!
Trade your expertise and/or time for themerchandise or services you need. We havethe traders ready---merchandise, specializedskills, buyers too! Call now and register. ABC BARTERING (123) 456-7890
When respondents to this ad call, you handle them just as abanker handles someone opening a new account. You explain howyour club work; Everyone pays a membership fee of $100 to $300,and annual dues of $50 to $100. The depositor tells you what hewants to deposit, perhaps $150 worth of printing services, andwhat he's looking for in return---storage space for a boat over athree month period. If you have a depositor with garage space forrent and needing printing services you have a transaction.
But let's say you have no "perfect match" for this depositor. Onyour list of depositors you have a dentist who's offering $500worth of dental work for someone to paint his house. A woman witha garage to rent in exchange for dental work for her children. Anunemployed painter willing to paint houses in exchange for a sideof beef, and a butcher who wants to trade a side of beef foradvertising circulars.
Remember, when a new member joins your club, he makes a depositand states his wants or needs. In the above example, you have atypical bartering club situation. Your service is to spend orline up those deposits to match the wants or needs of the clubmembers.
An affinity for people and good memory are vital to this kind ofbusiness, especially if you're running a "one-man show."Generally, when you have a buyer for one of your depositors, younotify him or her right away with a phone call. You simply tellher that Club Member A wants to rent your garage. She tells youfine, but she doesn't want any printing services. You simply tellher to hang on because you are currently in the process ofcontacting the dentist who'll do the work on her kid's teeth. Andso it goes in the operation of a bartering club.
Some of the larger bartering clubs (with several thousandsmembers), simply list the deposits and wants or needs on acomputer, and then invite their members to come in and check outthe availabilities for themselves. Others maintain merchandisestores where the members come in to first look at the currentlisting, and then shop, using credit against their deposits. Thesmaller clubs usually publish a weekly "trader's wanted" sheetand let it go at that.
These methods all work, but we've found that instead of leavingyour members to fend for themselves or make their own trades, themost profitable system is to hire commission sales people tosolicit (recruit if you will) new members, specifically withdeposits to match wants and needs of your present members. Thesesales people should get 20% of the membership fee from each newmember they sign, plus 3 to 5 percent of the total value of eachtrade they arrange and close. This percentage, of course, to bepaid in club credits, spendable merchandise or services offeredby the club.
You'll need a club charter, a board of directories or officers inmany areas, a city or county license. Check with your city orcounty clerk for more information on these requirements. Youshould also have a membership contract, the original for yourfiles and a duplicate for the member. In most cases you can writeyour own, using any organization membership contract as a guide,or you can have your attorney draw one up for you. You'll alsoneed a membership booklet, or at least an addenda sheet to yourcontract, explaining the rules and bylaws of your club. It's alsosuggested that you supply your members with consecutivelynumbered "club membership identification cards" for their walletsor purses. Some clubs even give membership certificates suitablefor framing. You can pick these up at a large stationary house orcommercial print shop.
Two things are important to make up of the membership package youexchange 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.
Basically, you should have at least 100 members before you beginconcentrating on arranging trades. As stated earlier in thisreport, the easiest way to recruit new members is to run an ad inyour newspapers, and perhaps even on your local radio stations aswell.
Follow up one these inquiries with a direct mail package, whichwould typically consist of a brochure explaining the beauty andbenefits of being a member of your bartering club, a salesletter, and a return reply order form. After you've sent out thedirect mail piece, be sure to follow up by phone, and ifnecessary, make a call in person as any other sales person woulddo.
Another way of recruiting new members is via the AmwayIntroduction Party Program. Allow a certain number of clubcredits for each party a club member arranges for you. Insist onat least 10 couples for each party, and then as the "Attractionof the Evening," you or one of your salespeople give amotivation-benefits available recruiting talk. Be sure you getthe names, addresses and phone numbers of everyone attending, andbe sure that everyone leaves with your literature.
If all those in attendance at these parties do not join, thenfollow up on them, first by phone and then with personal salespresentations. Once you've got them interested in your club, donot let go or give up on them until you have signed them asmembers. Another thing---take a page from the Party PlanMerchandiser's Handbook, and look for those who would be mostlikely to want to promote a similar party for you.
Offer them an item of merchandise they might be particularlyinterested in, and club credits if they'll not only join, butalso stage a party for you.
A bit more expensive, but just as certain of success are freeseminars. Rent a large meeting room, advertise in your localpapers, and then put on a hard-sell recruiting show. Such a planis very similar to the party idea, but on a larger scale. Aninside tip: Whenever you stage a recruiting party or seminar,always "pad the audience" with your own people, who will ofcourse lead the way for those you're trying to recruit.
As stated earlier, you can start operations out of your home, butworking out of your home has a number of growing inhibitingfactors. After a certain period of time, the growth of almost anykind of business is retarded when it's operated out of a home. Sojust as soon as you can possibly can afford to, move into anoffice of some sort. Keep your eyes open and consider thefeasibility of sharing an office with an insurance agent or realestate broker. Check your newspaper classifieds for businesseswilling to share office space or rent desk space or other officeamenities.
This is the kind of business that demands an image of success.You just can't keep people from "dropping in" when you'reoperating strictly on a local basis. And when you attempt to hiresales people, a place of business to work out of is just asimportant to them as how much commission they're going toreceive. Image is super important, so don't neglect it!
Ideally, you should have one salesman for every 50,000 people inyour area. Run an ad in your local newspaper, and also list yourneeds you state's employment service. Hire ONLY commissionsalespeople. Give them a percentage of the membership fee foreach new member they sign, plus a small commission on each tradedeal they close.
Assign each of your people specific territories, and insist thatthey call on potential commercial accounts ranging from the "holein the wall" rubber stamp shop to magazine publishers andcommuter airlines. There's plenty of business available in everycity or metro area in the country. Encourage your sales people tobe creative and imaginative when calling on prospects. Then, besure that you keep an open mind and listen to their wild tradingproposals (some "wild proposals have been known to become "wildlysuccessful)!
Schedule "open discussion" sales meeting every morning beforesalespeople "hit the bricks." have each of them report on theirselling efforts from the day before, and present to you a writtenlist of prospects they plan to call today. Set up salesmotivation workshops to be held at least once a month, and atleast once a week schedule a motivational speaker or play one ofthe widely available success/inspirational tapes as a closingfeature of your morning sales meeting. Stock sales success booksand encourage your people to borrow them, take them home and readthem. Your sales people will make you rich, but only if you turnthem on and keep them flying high with personal motivation.
Should you or should you not accept installment payments from newmembers? .Yes, by all means! But only when you've got theirsignature on a contract drawn up for your benefit and deemedlegally binding by your attorney. What about bank cards? Yesindeed! In fact, you'll find that your capability of handlingbank cards will double or even triple your sales.
Precisely how much are you going to need in actual start-upcosts? We would estimate at least $500 for your printing andlegal fees, unless you can trade charter memberships in your clubfor these services. Time wise, you're going to be putting in18-hour days, and 7-day weeks until you get those first 100people signed. And there won't be any money for salary orlong-deserved vacations from these first 100 members you sign.You'll need it all for advertising, membership packets and officeset-up. However, if you can really work at it, you should be homefree in six weeks or less. Then you can set up your office, hirea couple of girls to handle the paperwork, and take on asalesperson or two.
Reputation and success in matching offers to wants will be justas important as image, so give it your all. Don't give up; standbehind the implied, as well as the real promises you make to yourmembers.
A couple of final notes: Should you offer a guarantee ofsatisfaction? Only so long as it makes money for you, and you canback it up. There's not a person in business anywhere who enjoysrefunding a customer's money. But don't forget that the existenceof your business depends on service. The more you project animage of a "people pleaser," the greater success you're going toachieve. This is definitely not a business for someone whodoesn't enjoy "waiting on" people. You've got to like people,enjoy helping them, and want the inner satisfaction that comesfrom selling new ideas.
This is definitely a growth business. Bartering Clubs inmetropolitan population areas of 300,000 or more are reportingincomes of over a million dollars. The average in cities of100,000 population is about $150,000 per year.
Actually, no experience or special training is required. Theoperation of a Bartering Club is equally suited to women or men.Both do equally well as salespeople. It's a business that fills aneed, and a kind of membership program people will stand in lineto be part of, once they've been introduced to the benefits.
This is the plan. It's going to take your time and effort to getorganized, but after your initial work to establish thisbusiness, you can become quite wealthy in a relatively shorttime. Read over this plan again; determine if this is "the one"for you, and then go all out. It's up to you, and all it takesnow is action on your part.
One of the best of all the available sources of ongoing help andknowledge about bartering is a quarterly publication entitledBARTERING NEWS. Write and ask fro a sample copy. The address is:
Bartering news PO Box 3024 Mission Viejo, CA 92690