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Vivid Color Zack
12-10-2008, 03:36 PM
Seems that in this economy, or maybe just coincidentally, I've been getting a lot more requests to do work on trade than usual.

It basically burns down to us paying our cost in exchange for items we may use/want/need. I received a new motor for my car recently on trade. We've recently been approached by a local ski resort and are finding that while our desire to work with them is very large... We will be losing about 500-800 bucks when it's all said and done. However, we get to advertise on the back of some of the products they want and we get to ski for free this season.

I wish I were a bigger company and had employees I could give tickets to as gifts or something. It just seems like we're too small to make this valuable.

There's greater incentive too - I have some ideas I've been wanting to pitch to this exact resort for some time now. I think the best "shoe in the door" I could get would be starting out taking some print jobs for the mountain.

We're probably not going to be able to take over their printing entirely, as they've been with their current people for a really long time and are happy with them, but I'm torn here... I would love to do it, but I don't know how/if we can afford it. It's somewhat of a gamble but it might really pay off.

vangogh
12-10-2008, 05:33 PM
While I'm not theoretically opposed to taking trade for pay, it's not something I'm likely to ever do. People have offered, but what they've offered is usually pretty worthless to me.

Most of the offers I've received for trade weren't really fair. It's mostly been people offering me something I don't want or need in exchange for my work. I can usually tell what they're offering also doesn't cost them much of anything either. It feels very similar to someone wanting me to work without wanting to pay me so they offer something that doesn't put them out at all in exchange for my services.

Now if someone offered me something I actually wanted and the cost was equivalent to what I'd be charging for services I'd have no problem with that exchange. But it hasn't happened in the past and I don't expect it to happen in the future.

Vivid Color Zack
12-10-2008, 06:01 PM
Hmm, so far it's been pretty common. A lot of times their offer is worthless but in the case of my motor it was very win win, I saved a ton on something I was expecting to pay 1400 for, and they got a bunch of flyers, business cards and brochures out of it.

I don't even know what kind of advice I expect on this topic, I'm just kind of confused how to decide if it's going to be worth it or not. There is opportunity here for otehr types of printing and other work if things go right. I'm definitely tempted, and realistically I'll need to see if they would let me resell any of the tickets they would give me... I could make up some $ that way too, but I shouldn't get into this to become a ski lift ticket business... guess i'll have to kind of see what exactly we get offered before I decide one way or another.

Dan Furman
12-10-2008, 07:01 PM
On the surface, I don't see that as a great trade for you.

Be careful about falling into the trap of accepting trades because it's "business" (which is easy to do - I once traded for tires on one of the crappy cars I used to drive... I didn't really need tires, and these 4 tires were worth more than the car - I just did it because heck, I needed the biz.) I learned - trading usually doesn't work unless both sides really benefit.

Already you're looking to move the tickets, etc - that tells me you are doing this because heck, you don't have much else going on (etc).

Look at it this way - if your plate was pretty full and you were doing well, would you accept this trade? If the answer is no, then I would not accept it now.

Good luck!

vangogh
12-10-2008, 08:55 PM
Another thing to consider is if you start accepting trade for work word spreads. You could find most people contacting are only contacting you because they think they can get away without paying you.

When I first started in business I priced myself below what I should have thinking it was still work and some revenue. But the people who recommended me sent me clients who were also expecting that low price. I worked a lot for little money. As soon as I started turning people away unless they were willing to pay my price I started to make the money I needed.

Again I think there are times when a trade can make sense, but for the most part I'd have people pay for your services.

Evan
12-10-2008, 09:51 PM
I don't think it hurts to accept "trade" as payment. In fact, if it is truly something you would benefit from, why not accept? But if it wasn't something you really needed, accept at your own risk. Your certainly not going to feel the "benefit" as much as if it was something you needed.

With many businesses being cash-driven, "trade" isn't helping. And "trade" certainly isn't going to pay the bills. Unless your landlord, utility company, insurance company, bank, and credit card companies are all your clients. Then in that case, go ahead! :D

Business Attorney
12-10-2008, 10:07 PM
I think accepting goods or services makes sense, but only if it is a fair trade. About 20 years ago, I had a client who published a weekly newspaper. A couple of well-known Chicago restaurants would only buy ads if they could pay in trade. That worked out pretty well for my client, because part of his selling efforts required that he occasionally take people to lunch. If he had received cash, he might not have eaten at the same restaurants every time but he still would have spent the money someplace.

seolman
12-10-2008, 10:16 PM
There are times you can be creative with trade. Example: get the ski resort to give you some free ski passes and offer them as a prize for new customers. Run an AD campaign in the local paper "all new print customers in December are automatically entered in our Free Ski Giveaway".

Could be a roundabout way of getting extra customers in a slumping market.

View it as a marketing expense.

orion_joel
12-10-2008, 11:46 PM
I agree with seolman, use the free passes as part of your marketing.

I believe that a lot of business do this, do some trade and realize i don't need this so they give it away as a prize, or if they have a few of something they may give it to their top customers as an incentive that they are thinking of them.

Maybe another option would be to push the resort to give a 2 night package, that you can give away in a promotion to customers and get them to go half in the newspaper ad or something for the promotion. That makes it win win, both of you are getting promoted, and you are able to give away a prize that is worth more then you would probably want to spend if you were doing this on your own.

One way to look at the trade situation is, to weigh up the cost factor, for example you have to pay for the supplies to do the printing, so you need to look at what you are getting from the financial point of would i be spending this money anyway and by getting this as a trade am i offsetting enough of my expenses to make it worth my while. If you are not, then you are losing money and unless you see an initial trade deal like this leading to much more paid work in the future, you may consider not accepting.

vangogh
12-11-2008, 10:16 AM
I think the key is to trade for something you would honestly buy on your own and also to make sure the trade is equitable for both sides. Unfortunately most of the time trade has been offered to me, neither of the above conditions were met.

That's why I'm not opposed to accepting trade in theory. I can see how it could work out. So far though, in practicality it's never worked out for me.

At the same time were a big name blogger to approach me to redesign his or her site and for payment they would simply mention me as the designer a few times that would be trade in a sense and one I would likely jump at, since the mention would probably lead to much more work of the paying kind.

KristineS
12-11-2008, 12:51 PM
There have been some creative suggestions for ways you could use what the resort is offering in trade. I think those suggestions are good ones.

You also appear to think that entering into this agreement could lead to further business down the road. If you think that would be cash generating business, than it might be worth pursuing this.

Vivid Color Zack
12-11-2008, 04:22 PM
See all of these marketing benefits are good things. I feel like we're potentially going to be losing around 500 when everything is said and done. Take into account the exposure we potentially gain and the fun factor that it's going to bring us for a sport I would already be spending money on, not to mention I can help my friends too, I think it's worth doing.

I think running a promotion where people get a few (2) lift tickets for ordering 500 or more in printing might work out. Maybe do some giveaways in the chamber of commerce I'm in or something. There's a lot of potential it's jut going to depend on how valuable they think their tickets are vs how valuable they are to me.

Vivid Color Zack
12-11-2008, 04:26 PM
Already you're looking to move the tickets, etc - that tells me you are doing this because heck, you don't have much else going on (etc).

Look at it this way - if your plate was pretty full and you were doing well, would you accept this trade? If the answer is no, then I would not accept it now.

Good luck!

That is a great point. Trying to get a small piece of a big client might not turn out to be everything I'm imagining it to be. I know they probably try to pay everyone in trade, I wish I had a clearer answer in this. It's a risk no matter how I look at it. But if it doesn't go to plan I can flip the tickets without any trouble and make back anything we've lost.


Oh and Vangogh - didn't see this part - "When I first started in business I priced myself below what I should have thinking it was still work and some revenue. But the people who recommended me sent me clients who were also expecting that low price. I worked a lot for little money. As soon as I started turning people away unless they were willing to pay my price I started to make the money I needed."

I completely remember that, barely a year or so ago we were able to start charging enough to make everything worth our efforts. In the beginning it was a joke. We would bid so hard to get a job that there was almost no profit anymore. People are willing to pay for good work, but everyone wants a deal too. Fine line I think.

orion_joel
12-12-2008, 12:32 AM
I think you are right on Vangogh, as is actually also said for many other area's of business the whole idea of a transaction is that it should be Win/Win for both sides.

In your example above, of a big name blogger getting you to redesign their site, and getting a few mentions. This would be win/win i would imagine, they would get a great design, and you could potentially get thousands of dollars of extra work.

Trade will not work where either party loses, because someone will think they got the short end of the stick. For me i would lose if someone offer me a case of beer or bottle of spirits, in return for fixing their computer. It would be of no benefit to me at all. Since i do not drink anything but water.

I think this concept was outlined in one of Stephen covey's books, just cannot remember which one. One of the 7 habits, maybe.

vangogh
12-12-2008, 10:26 AM
The Steven Covey mention sounds familiar, though I've heard the win-win concept from so many sources it's hard to know where it came from.

The problem that happens to me with accepting trade is one of the wins isn't there and it's always my win that's missing. My favorite offer is the lady who wanted to trade drum lessons for a site and ongoing seo work. Now I like the drums, but I really don't have any interest in drum lessons. But she also put a limit on how many drum lessons she would give in return. I think it was 2 or 3. So not only would I be trading for something I didn't want, I wouldn't be getting enough it it to make it useful even if I were interested.

Vivid Color Zack
12-12-2008, 06:04 PM
"let me give you something that is worthless to me so I can get something valuable from you"

I think this is the overall feel here.

I've submitted a bid requesting no more than 60% trade. That way some of my loss will be cushioned initially and I can still hopefully regain the rest on my own.

If they are ok with that I'm going to do it, the gamble is still there but I think it's worth it if they accept my terms.

vangogh
12-12-2008, 08:47 PM
Don't let us dissuade you if you have a deal worked out that works for you. Like I said at the start I'm not opposed to the idea in theory and I do think there are ways you can make trade as payment work. I've talked here and elsewhere about doing things for free in exchange for the marketing benefit.

The "let me give you something worthless so I can get something valuable from you" is mostly how others have approached trade with me, but that's still a limited experience and there are ways to make it work. Just make sure what you get back is worth the time you're putting into the work or at least worth the risk of it possibly leading to future paying work.

Vivid Color Zack
12-12-2008, 09:31 PM
I'm completely objective still, I'm asking for your opinions because they matter to me. In my head all I do is think how much fun snowboarding I would have this season, so it's good to have other perspectives.

If I wasn't becoming busier and busier with every week that passes I would be more confident that we could do this and sell off some tickets, but I feel like the overall time spent dealing with all of this may just become a wash.

Like I said though I think I'm ok if they can give us partial cash. If not it's not worth the potential benefits.

Blessed
12-13-2008, 05:03 PM
the best trade I ever did was when a new Massage Therapist started up her in-home business and needed advertising materials, gift certificates, business cards etc... it was awesome for almost a year we were able to get massages about once a month... then we ran out of trade... We still get massages sometimes, but not near as often! :p

Business Attorney
12-14-2008, 09:59 AM
the best trade I ever did was when a new Massage Therapist started up her in-home business and needed advertising materials, gift certificates, business cards etc... it was awesome for almost a year we were able to get massages about once a month... then we ran out of trade... We still get massages sometimes, but not near as often! :p

It sounds like it's time for your client to update her marketing materials! :D

Remipub
12-15-2008, 01:11 PM
On a legal note (I know, how boring!)...

When you receive payment as trade you still have to report it on your taxes. Whatever the value of the thing you received is considered income according to the IRS. There was a very large bartering company based in my city that got in serious hot water for tax evasion (among other things) because they failed to report the value of things received in trade. Needless to say, they are no longer in business.

Vivid Color Zack
12-17-2008, 09:52 PM
marketing materials for my own company are non taxable if I remember right :)

Evan
12-18-2008, 11:41 AM
When you receive payment as trade you still have to report it on your taxes. Whatever the value of the thing you received is considered income according to the IRS.

Very true, so this will appear as income to both parties. The expenses incurred though to make the exchange are still deductible.


marketing materials for my own company are non taxable if I remember right :)

Tax avoidance is generally not a good thing.

Vivid Color Zack
12-18-2008, 12:29 PM
Oh I was serious. I can't write off everything I spend on the business?

Since these would have our logo on the back I don't think thats a difficult argument to make.

Would they be paying taxes on the lift tickets they would give out for trade too? I really didn't realize this.

Evan
12-19-2008, 08:59 PM
I can't write off everything I spend on the business? Since these would have our logo on the back I don't think thats a difficult argument to make.

You can always write off business-related expenses. The extent of the deduction depends on the nature of the expense. For example, business meals are only 50% deductible, but there are exceptions where it could be 100%.

But in this case, I thought you were stating you would consider making marketing materials for another company and exchanging it for something else. Say it was worth $500, even though the expenses were only $100. You can record the $100 expense, and that $500 needs to be reported as income by the other company. And if they were to give you $300 worth of services in return, you'd have to report $300 worth of income on your tax return (Schedule C, 1120, 1120S, or 1065).

greenoak
12-20-2008, 09:25 AM
actually deciding if you want to trade with someone is not easy to figure out....first and usually the bad part, you have to want what hes got to trade......then you need to both be on the same price level...like not your wholesale price for his retail price.......also not his top hoped for price for your lowest possible price.....
i try to avoid it...they usually want my best thing for whatever they are trying to get rid of...
.
it worked fabulously for us once...we made jewelry and the other business made candles....we were hitting about the same market and price points...so we would make these huge trades ...and they totally increased our inventory...and we could look at the candles as making as much money for us as the jewelry did...we had a several year relationship with the other store doing this.....

its great if they want something you are glad to get rid of./or can replace easily......but thats not usually the case in my experience

Vivid Color Zack
12-25-2008, 02:21 PM
Evan and green - thanks for your input I'll keep that in mind for future trades. Hopefully I can just make enough money to buy the things I want and I can keep trade out of it. It's getting confusing.

Merry christmas!

huggytree
12-31-2008, 09:04 PM
My old boss had a builder who went under and owed him $20,000 for the plumbing on his parade of homes model.....he asked for the builders 78 corvette...it was probably only worth $10,000 at the time, but $10,000 worth of corvette is better than $0

I think if i were sitting around doing nothing anyways id consider a partial trade. your raw material costs would 100% have to be paid for with money...but your labor i could see trading for if its something you could actually use..

by taking something you dont really want or need and giving your services 100% on trade you are actually losing money because YOU!!! are paying for the raw materials and your getting something you dont need in return...you lose!!!!!

id trade with a food store or gas station anytime for 100%...thats about the only exceptions for me..

When i was an apprentice in plumber school i had a single friend who would trade plumbing for something special with a single girl...true story, that stuff never happens to me, always the other guy....

Vivid Color Zack
01-02-2009, 02:21 PM
some guys have all the luck.

My next goal is to become some kind of exciting sport instructor. Race car driver, scuba instructor, something where the ladies will all idolize my abilities and want to pay me with adventures :)

huggytree
01-02-2009, 09:36 PM
dont you wonder what she looked like?

he was a skinny, average looking guy.....but how many women dream of a plumber?

probably more than a garbage man or an mortician

Evan
01-02-2009, 11:23 PM
he was a skinny, average looking guy.....but how many women dream of a plumber?

But not nearly as many as a firefighter.

Vivid Color Zack
01-05-2009, 11:47 AM
I've really considered that career path. I think if I were to do anything else I would pursue that option. I've been on a few ride-alongs (how the heck to you pluralize along?) and watched my best friend go through the process. It's a lot of work, but when it's all said and done it's a great job.

I'll need to make up my mind soon though I don't want to be a 30 year old probie.