A: Attorneys and doctors may have an ethical issue about paying referral fees, as it has the potential to be looked at as a conflict of interest. In addition, for attorneys there could also be issues with their Bar Association. I have heard this question many times from many attorneys that have a concern about referral fees and being in violation of the Bar.

Factually, barter exchanges do not charge or collect referral fees. A barter exchange is a business network with a payment platform much like the credit card industry. Members of a barter exchange business network pay a cash transaction fee each time they make a sale and earn barter dollars in the exchange that are deposited to their barter account. They provided a service to a member, they were paid in barter dollars, and the exchange charged a transaction fee, which is no different than if they were paid by Visa, Master Card or American Express, which charges a 2.2% to 3.8% fee + transaction and monthly fees for processing their charge.

The added benefit of being a member of a barter exchange, as compared to just accepting credit cards, is that the exchange also provides marketing, networking and advertising to a member at no additional charge, so that members end up getting new business from new customers that they ordinarily would never have had.

Members also pay a transaction fee when they spend their trade dollars, which is paid to an exchange for the service the exchange provides to help business reduce their cash requirements for purchasing, so they can pay for the products or services they need at the cost of their own products or services.

Never Ignore Customers’ Calls
by Dr. Jerry Osteryoung

If a customer calls to inquire about a product that you are servicing for them, and you do not have the information, you must tell the customer that you will find the information for them and when you will be getting back to them. Not calling them until you have the information — which might take several days or longer — is terrible customer service insurance news.

So many times, salesmen and service technicians think that it is okay to delay returning the customer’s call until they have some information to pass on. However, this is an awful policy because the customer does not know that you are looking for the answer. How would they know that you have not just forgotten about them or neglected to relay a message?

We had a kitchen stove go out on us, and cooking without a stove is tough. The local dealer did not carry the part that was needed for the repair, and it had to be ordered. When the dealer discovered the part was on backorder, they said they would get back with me and update me on the status of the order when they heard something.

I did not hear from them the next day, so I called the dealer’s service department and was told in a very negative tone, “We said we would call you when we hear when your part will be in!” I explained how important it was for me to have a rough idea of when the part would arrive, but was told that they would call when they knew.

I continued to call each day. It was not that I wanted to harass the dealer, but I just wanted to know when we would no longer have to think about going out for dinner. Was I trying to get the part sooner? No, not really. I just wanted to know when our lives would return to normal.

What should the dealer have done differently? All they had to do was call me each day and update me on the progress. It would have even been okay to call and tell me that they did not know anything new. Then, at the very least, I would have known that I had not been lost or forgotten.

A standard script would be helpful in cases like these. A technician could say something like, “I apologize, but we still have not heard from our supplier. If we do not hear from them by tomorrow, we will call them back.”

This all goes back to great communications. Each and every business must ensure that its communications with its customers are done in such a way that each one feels good about the interaction. Look at it this way, not communicating with a customer is still communicating, but the message being sent is all negative.

Now go out and make sure that you have a system in place to ensure customers receive periodic reports about the status of their orders or repairs.

As this also pertains to your barter exchange business, keep your members informed with a “touch system” and always let them know that you are working on bringing in new members that should be able to provide what they need.

Jerry Osteryoung is the Director of Outreach of the Jim Moran Institute for Global Entrepreneurship in the College of Business at Florida State University, the Jim Moran Professor of Entrepreneurship; and Professor of Finance. He was the founding Executive Director of the Jim Moran Institute and served in that position from 1995 through 2008. He can be reached by e-mail at jerry.osteryoung@gmail.com or by phone at 850-644-3372.

Following is an excerpt of the DoBarter online Exchange Membership Agreement that can be found at: http://dobarter.com/Membership_Agreement.asp?

Member Exchange agrees not to use another on-line software provider relating to DarnFast Software Inc. (DoBarter/IBA) while using DarnFast Software Inc. (DoBarter/IBA) software and for a period one (1) day less than one (1) year after termination of use of DarnFast Software Inc. (DoBarter/IBA) software. Member Exchange agrees that violation of this creates a financial obligation of $100,000.00 USD from Member Exchange to DarnFast Software Inc. (DoBarter/IBA).

Member Exchange agrees that giving software providers or developers access to DarnFast Software Inc. (DoBarter/IBA) system software Site Manager creates a financial obligation of $100,000.00 USD from Member Exchange to DarnFast Software Inc. (DoBarter/IBA).

Member Exchange agrees use of DarnFast Software Inc. (DoBarter/IBA) system software gives Member Exchange valuable information into the software requirements of DarnFast Software Inc. (DoBarter/IBA) system software. Member Exchange agrees not create, participate in the creation of software relating to DarnFast Software Inc. (DoBarter/IBA) while using DarnFast Software Inc. (DoBarter/IBA) software and for a period one (1) day less than one (1) year after termination of use of DarnFast Software Inc. (DoBarter/IBA) software. Member Exchange agrees that violation of this creates a financial obligation of $100,000.00 USD from Member Exchange to DarnFast Software Inc. (DoBarter/IBA).

Barter Budget Planner A Purchasing Needs Analysis ____________________ Date CATEGORY – Get more Business Plans

For example, one of our clients is a magazine. One of its major expenses is color separations. We found another business that does separations and signed them up specifically for the magazine client.

The pre-press company does the separations and film on trade, and the magazine charges cash to its advertisers. With the help of a creative broker, the magazine now turns its Trade Dollars directly into cash.

The separations were an established part of the magazine’s fixed cost, so it was fairly simple to recognize the barter opportunity. Creative traders can also develop new product lines or new ways of doing business that turn Trade Dollars into cash dollars.

For example, a parking garage teamed up with an oil change and auto detailing company. Parking customers find it convenient to drop their cars off and not waste time on minor maintenance. The parking garage pays for the work in trade, then charges cash to its customers.

With the help of creative trading, the garage owner found a way to offer a new service and generate a new source of cash flow funded completely on barter.

There are numerous examples of how businesses can turn trade dollars earned from new sales to new customers into cash sales to customers that aren’t members of the barter exchange. A lawn maintenance company can use trade dollars to purchase plant material and sod on trade. An auto repair company can use trade dollars to buy auto parts on trade that can be sold for cash.

With just a little creative thinking, the possibilities of using barter to expand a business and improve the bottom line are endless.

The mortgage, insurance and utilities on a hotel are fixed, whether the hotel is fully occupied or nearly empty. The incremental cost of filling an unused room is minimal. To pay for the extra house cleaning, laundry, and complimentary items such as soaps and shampoos, it costs about $20 per room night.

But just think about how much cash revenue that twenty dollars can generate. The people staying in that room order room service, buy sodas from the machine, magazines and gifts from the gift shop and eat in the restaurant. It’s even more lucrative if it is a resort. When a destination resort offers sports, tours and entertainment, visitors spend a lot of money on peripherals.

The hotel has generated cash it would not have had while producing full value for the room in Trade Dollars. In addition to the new cash flow, the hotel can use the Trade Dollars it earned from selling excess unsold inventory to offset cash expenses.

There are many other types of companies that can also generate new cash sales from participating in a barter exchange. These include, auto repair facilities that also sell vehicles, computer repair companies that sell computers and HVAC service companies that sell equipment. The companies can offer their repair and maintenance services on trade and also market vehicles, computers and equipment to these new customers to generate new cash sales.

It doesn’t matter whether the company has many employees or just a few. There are dental plans, vision plans, chiropractic physicians, health spas, day care, and numerous other employee benefits, such as health club memberships and vacations, that are available in a barter exchange and can be paid for with Trade Dollars.

Providing employees with better benefits purchased using trade dollars can help small businesses attract and keep skilled employees. Another approach is to make benefits available to employees at a reduced cost. For example, an employer might pay for day care at a local center on trade, then offer the service to employees at half price as a payroll deduction.

The employee receives a significant saving on a valuable fringe benefit. The employer reduces its payroll cost, and the expense provides a tax deduction.

Another benefit that can be provided to employees would be a dentist or optometrist. In these cases employers can send an employee to a barter exchange member dentist, then submit the bill to the insurance company for reimbursement in cash, thus converting barter to cash.

Today, you have several options for online barter software to manage your barter exchange… Making the best choice not only depends on your specific needs and desires, but also choosing the right business partner to provide and host your software.

You want the software to be bullet proof and hosted at a top tier hosting facility to assure reliability and zero downtime. And, you want to be able to make your own rules and business decision about your barter exchange, rather than being told by your software provider what you can and cannot do.

Here are several considerations to look for and other considerations that should be a warning sign to look elsewhere…

Does the software provide you with a platform where you can control your member’s trading experience and run a world class business to business barter exchange where you, not your software provider or licensor, sets the rules?

Does the software feature a huge marketplace filled with yard sale merchandise, overpriced off brand products, used household items and trade listing offers that often never get shipped, where you are locked in to sharing your members and offers with other exchanges?

Does the software automate your administrative tasks so that one or two people can manage a 300 to 500 member exchange, so you can spend most of your time acquiring new members and generating trade velocity?

Make sure the software is totally intuitive, simple to use, easy to navigate and doesn’t require a college degree in computer technology or you will be spending your time showing members how to use it or actually doing everything for them.

Can the software provider enable you to facilitate large corporate barter transactions without the need to build the infrastructure, when a transaction doesn’t fit into the retail barter model, so that you can earn tens of thousands of dollars at three times the percentage you would earn from a retail barter transaction?

Does the software provider charge a percentage of your revenue because they think that they should be your partner and the more you earn, the more they should get, or do they just charge a monthly subscription fee?

Does the software provider focus their efforts on on running their own barter exchange, and actually designed the software for their own use, but is now licensing it to other exchanges?

Perhaps you are exploring a franchise in a regional or national barter system. They often keep 25% to 40% of your revenues for accounting, collection and administrative services that you can actually do yourself for less than 5%!

Explore all of your options and do your due diligence as many barter exchange owners make the wrong choice and then find themselves with the daunting task of switching software and perhaps, even loosing their members to an unscrupulous software vendor who won’t release their member and transaction data.

Click Here to read the complete article detailing all of the features and functionality you will need when considering Barter Software…

Ancient barter was man’s first form of commerce and consisted of the one-to-one direct exchange of goods and services. Advances in technology have greatly expanded and enhanced the scope of barter far beyond this limited one-to-one model.

Today, International Reciprocal Trade Association (IRTA) member barter companies using the “Modern Trade and Barter” process, made it possible for over 400,000 companies worldwide to utilize their excess business capacities and underperforming assets, to earn an estimated $10 billion dollars in previously lost and wasted revenues.

In terms of income, excess business capacity represents the difference between actual cash revenues received, and the cash revenues and profits that would be realized, if a business operated at 100% of its capacity. Most businesses are operating at less than 100% of their potential business capacity.

IRTA member companies can help your business realize lost revenues and make additional profits by making use of your excess business capacity.

Businesses that choose to participate in modern trade and barter should become a client of an IRTA member company. As clients when they sell their goods and services to other clients in the system they earn trade credits, which are deposited into their accounts. They then have the ability to purchase goods and services from other member clients utilizing trade credit in their accounts.

Barter companies play a vital role as they provide organization, system management, record keeping, maintenance of transaction record and broker services to each member client.

It is important to note that there are other forms of modern trade and barter. Some of these include complementary (or local) currency organizations, LETS (Local Exchange Trading Systems) and many other forms of alternative monetary systems to help local and regional economies.

Learn more about the Barter Industry at Barter News Magazine

The magic bullet for growth is sales, always has been and always will be…yet the industry’s overall growth is anemic. Why? Maybe it’s because we’re not providing on-going education about our unique way of doing business. Knowledge is always a pre-requisite to taking sustained action.

And for those newcomers, the lifeblood of an exchange, awareness of and understanding about the value of trading is even more important.

If you expect prospects to come aboard and your members to be more active traders, but you are perplexed when the results are less than you desire…there’s a good reason. You must continually educate and motivate every month–month after month after month!

Such action is necessary because, let’s face it, more cash business, not trade, is of paramount importance to your members. You must break through this “cash only” focus and redirect their thinking toward barter. Although most exchanges don’t see the importance of doing so, many industry leaders are taking action and so can you.

As the owner of your own operation, there is an easy and inexpensive solution for moving forward…look into using The Competitive Edge newsletter. It’s a camera-ready, 4-page, professionally written, informational marketing tool…available in PDF format as well as print. So regardless of how you reach your prospects and clients, you will have the necessary vehicle.

Written especially for you, the busy trade exchange owner, I am certain it will be the best investment you ever make.

For more information about The Competitive Edge, and how it can benefit you click here.