Tricks of the Trade: Businesses barter for goods, services
By Angela Carter, Register Staff
Bartering — the centuries-old system for trading necessities from food to building supplies, or to pacify an enemy — is still paying off.
And for Chris Loynd, director of marketing for The Maritime Aquarium at Norwalk, the returns on bartering are expected to last beyond the spring and summer, Maritime's strongest seasons. About 30 percent of the facility's annual foot traffic of 400,000 to 500,000 occurs in July and August alone, he said.
The aquarium joined Milford-based Barter Network Inc. earlier this year and traded $25,000 worth of general admission tickets for the equivalent amount in trade credits that were used for advertising services. Maritime purchased ad space from Direct Advantage, a direct mailing service, and WindCheck, a magazine for boaters.
"We probably wouldn't have used those outlets otherwise. It's going to mean incremental business. That's not something I would've risked with cash," he said. "It's incumbent on the Barter Network to trade those tickets to other members in the network. I was able to justify it to the organization and our CFO (chief financial officer) loved the idea."
So, between ad responses and the bartered tickets, Maritime expects to grow the number of people coming through its doors for the popular "Penguins on the Loose" program that allows visitors close proximity to African penguins; and to thereby boost spending on the Imax movie theater, Long Island Sound cruises, a gift shop or the Cascade Café.
Admission to the aquarium is free for children under 2, $9.75 for kids 2 to 12, and $10.75 for seniors and $11.75 for adults. Loynd said the traded tickets are mixed across age groups and do not expire.
"We have sharks and seals and all kinds of great stuff that aquariums have. We're really pleased with the barter concept. I told Clay, as soon as they're done with the firs t $25,000, I'll definitely consider doing this again," Loynd said of a discussion with Barter Network's founder, Clay Yalof.
Yalof said BNI is adding 100 to 150 new clients per year, who trade products or services at retail value. "The way economic times are right now, it seems barter is front and center. In this economy, we do very well because these are tangible needs," he said.
Barter agreements are only a portion of any member's overall business, Yalof said, not the foundation. "The goal is to bring incremental business, not to change cash clients into trade clients," he said. Sometimes brokers will make cash referrals.
BNI is the third party that plays two roles: marketing members' products and services throughout the network and brokering purchases with trade credits. For example, a landscape artist could use credits for barter services to provide incentives to his or her staff, to renovate a home or office or go on vacation.
"We really want to help the small and mid-size businesses that are hurting right now and not really getting any relief," Yalof said, adding that BNI itself lives the concept. The company has used credits to purchase office equipment, flooring and other items to set up its headquarters at 57 Plains Road.
Members pay a fee to join and BNI sets up an account and assigns each member to a broker. The network gets a commission on the transactions.
Members are able to give feedback on their experiences and quality is expected. Funds are escrowed before any job starts to avoid "bad debt," Yalof said. If complaints are lodged, they get investigated. Members can be ejected from the network under certain circumstances, he said.
"Most people think it's too good to be true. But as a business owner, you control how much you do. We don't want you to over-extend yourself," he said.
Senior Trade Director Mark Bastarache said he stays busy on the phone and keeping up with e-mail to find out what clients need, be it help increasing sales, moving excess inventory or gaining greater exposure.
"I'm always on the phone contacting my customers to present new barter opportunities in front of them," Bastarache said. "We're not trying to sell them something. We're trying to fill a need and save them some money."
Bob Fraulo, owner of Allegra Printing in New Haven, has discovered several benefits in joining the network.
"What's neat about it is I get to meet a lot of new businesses outside my customer base. I can build up credits and they have a lot of different services to offer from catering to hair care," he said.
Then there are things he would not be able to afford on a cash basis. "I can give perks to my workers and reduce expenses. I was able to provide someone with dental care. Otherwise, I couldn't have. We're so small," Fraulo said.
He also has generated cash customers by word-of-mouth. Allegra provides full-service printing of items such as calendars, forms, cards and letterheads, posters and banners, government budget books, binding and more. "I'm trying to beat the recession in my own way," he said.
The network has reciprocal agreements with 15 other barter organizations in the country, giving members even more options, Yalof said. "From Florida to Dubai, we can get it.