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Admittedly, some businesses are not suitable for barter. For example, if you operate at full capacity or for some other reason do not want more customers, avoid trading. Those with low profit margins are also not good barter candidates. A gross profit margin of 50 percent or more is most desirable. Barter exchanges charge you for their services, and you might have to make compromises to complete a trade, either of which can make barter uneconomical if your profit margins are slim.
You also need a product or service that will generate sufficient trading volume. Rice recently had a man want to join his exchange who sold biorhythms. When asked the percentage of businesses he thought would buy his services, he estimated five percent. Since the exchange had 500 members, this man's potential market was only eight customers, which did not justify the initial fee and ongoing costs of being an exchange member. It is also essential to spend money on the various products or services available through barter in order for it to work for you. Obviously, for example, you can't make car payments, pay the mortgage or cover your child's college education by using this avenue. Therefore, before jumping into the barter economy, analyze your products and services and your buying and spending habits to see if they dovetail with what's available via barter. Your local barter exchange can give you a list of its members and their products and services, making it easy to see what's available to buy, and who your potential customers might be. |
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