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By Jay Abraham
That means you go to a third party who has some goods or services that the radio station and television station wants to trade for. And, you trade with them for your product or service.
And, there's no law that says you have to trade equally. Depending upon the perceived value and the margins you operate with, you might trade abnormally higher or lower.
For example: Car dealers trade automobiles that have lower margins but higher desirability. They may trade a $20,000 automobile, and they may go to a radio station or a television station and get two or three times that face value in advertising. Why? Because the station, if it wanted a car, would have to lay out $18,000 for the $20,000 car. It's easy to trade hard goods, televisions, furniture and other things that people want very badly in exchange for higher multiples of soft goods, advertising, services and so on.
I've seen people trade for the maintenance of their homes, their offices, painting, signage, advertising, automobiles, trips, training-- you name it. (The only precaution is to do it appropriately from a tax standpoint--and that's something you should discuss with your accountant; barter deals do have tax implications, but they aren't an impediment in most cases.)
Profiting Through Barter
Few business people know this, but there are no less than 40 different ways you or your company can profit substantially using barter. I'd like to share some of those ways with you and ask that you try them out during the next several weeks so that you can see, first-hand, the money-making, profit-boosting opportunity that barter presents.
Save cash on capital expenditures. Say you're buying a computer. After you've negotiated the lowest price you can get, you agree to the price if the seller will take a portion of that negotiated price in your product or services--ideally, 25-50 percent. What does that accomplish? It lowers the true cost of that computer to you by up to one-third, while allowing you to pay it later, interest-free.
Increase your total sales. Since many businesses focus a lot of attention on "total gross," barter accentuates the gross while continuing to minimize the overhead. This means that the cost of producing barter, instead of being 100-percent dollars, lets you increase your gross sales at a fraction of what doing it with cash expenditures would be.
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