Gift Shop

MARKETING CONCEPTS GIFT SHOP

It’s Crystal Clear –

Barter Bears a Gift Of Profits

While surfing the Internet one morning, James Stinson, owner of JS Fine Gifts, was astonished to see the number of gift shops around the country doing business online. Many of these shops were offering terrific prices on the same Lladro’s and Swarovski items that were sitting idle on James’ showroom shelves. After making this online discovery, it soon became apparent to James that he needed a strong presence on the Internet. To accomplish this feat, James knew he had to develop a Web site, upgrade his phone system to field calls, and include a DSL line for quicker electronic response.

While such a dilemma would cause most gift shop owners to panic with thoughts of spending big money to make these costly upgrades, James knew exactly how he would accomplish these business objectives without opening his checkbook. For the sev- eral years, James has been a member of Tradesource. By making a simple phone call to his broker, James was able to find a computer programmer to design a new Web site and a communications company to upgrade his phone system. He even used barter to trade for his computer and telephone maintenance package. Soon, James was using the Internet as a way to expand his market place.

“I think it’s safe to say that today most gift shop owners are fighting the Internet as a competitor,” James said. “That being said, barter is a godsend for gift shop owners like me. I’m able to trade my gift items online, and barter has helped me to move my excess inventory without having to worry about marking down these items. The Internet creates a demand for my items, and with the online ordering I provide, I have a continual revenue stream. Using barter to trade for the development of a Web site and revamp our phone system was another smart business decision. Now we can go toe-to-toe with the Internet while still addressing the day-to-day operations in our store.”

Barter increases sales for gift shop owners — by providing new customers.

Bartering is an idea as old as civi- lization itself. By strict definition, bartering is the cashless, item-for-item trading of goods and services. Where our ancestors might have been trading chickens for cows, today’s savvy business people are bartering printing for landscaping, jewelry for computers, or like James, quality gift items for just about anything – all this through the help of a professional barter exchange like Tradesource.

Part accountant, part matchmaker, today’s barter organizations exist to bring their members new business. According to Tom McDowell,

Executive Director of the National Association of Trade Exchanges (NATE), there are about 400 barter exchanges in North America, with more than 350,000 business members doing in excess of $4 billion annually.

Trade exchanges such as Trades- ource help cash-strapped entrepreneurs stimulate sales, develop new clients, convert excess capacity or inventory into revenue, and acquire the goods and services they need to conduct business. The most important benefit of barter is that the new business helps to conserve cash. Businesses can trade for things they need and keep their cash for the expenses they can’t barter for.

“I probably barter for an additional $25,000 in business through my trade exchange. Barter helped me to build a lecrative business.”

Bartering also can be an ally to small business owners looking to expand. Normally a business owner would have to go to the bank for a loan or save enough from receipts to finance the project. Barter is a way businesses can use the value of their own products and services to fund company growth.

Bartering enabled Clara Hamilton, owner of Crystal Clara Gifts in New York, to make some much-needed upgrades to her store. Clara used her trade dollars to purchase a security system, replace door locks, and install surveillance cameras for added protection at her shop. Clara also uses her trade account to purchase printing and advertising, signage, carpet and window cleaning, roof and gutter maintenance, and bottled water service.

“I probably barter for an additional $25,000 in business through my trade exchange,” Clara said. “That’s $25,000 of new business that I wouldn’t have had had it not been for my decision five years ago to join a trade exchange. Barter helped me to build a lucrative business for myself.”

One-on-one bartering is common among gift shop owners, but joining a trade exchange or barter company (a group of businesses who barter among themselves) can give you more flexibility and opportunity. The barter com- pany also gives you a great record keeping system so you’ll always know where you stand with your barter account. There’s no additional bookkeeping on your part.

When you join a barter exchange, expect to invest between $300 and $600 in the membership. You’ll have about $20 in monthly promotional fees and pay 12 to 15 percent commission on your trades. In return, the exchange will provide you with constant promo- tion of your business, ongoing account maintenance, a monthly statement, membership directory, a personal trade broker to find what you’re looking for, and most importantly, lots of new customers.

“I had a real hard time with paying fees to barter when I had been trading my gift items with local businesses for more than 10 years,” said Nick Garrett, owner of The Treasure Chest in Little Rock, Ark. “But when I sat down and took a serious look at all the accounts I was running a tab on, and how many I never received anything from, I saved a lot of money by paying the barter company. I’ve even moved most of my direct trades into the barter exchange. It just makes sense.”

Barter affords gift shop owners the ability to rennovate and upgrade their stores — without using cash.

Barter helps gift shop owners get additional turns on their inventory without discounting their pricing.

“I had a trade customer come into my shop and purchase a fine piece of Waterford crystal, and she gave it to her boss’s daughter as a bridal shower gift,” said Joseph Nordstrom, owner of Keepsakes On The Keys in Florida. “The bride-to-be was so impressed with the piece that she later visited my store and purchased gifts for each of her six bridesmaids, as well as her mother and her mother-in-law to be. From that one barter deal I was able to gain a substantial amount of new cash business. Joining a barter company was the most fundamentally sound business decision I’ve made since go- ing into business for myself 15 years ago. Large portions of my operating expenses are now paid for using trade, further enhancing my profits.”

“Working 60, 70, or even 80 hours a week isn’t uncommon in this business,” says Sandra Lynne, co-owner of Moment In Paradise Gifts in Philadelphia, which specializes in porcelain figurines and exquisite crystals. “That’s a lot of time away from my family. Being in the barter exchange has allowed me the opportunity to take my daughters on great vacations, buy my mom some really nice jewelry, and even pay for part of my children’s education. I also trade for landscaping services so that my weekends are free for me to relax and do the things I want to do. Barter has really enhanced my lifestyle.”

“The most important part of barter is getting new business,” says Tom McDowell of NATE. “When someone joins an exchange they’re exposed to hundreds of new potential customers locally and thousands around the country. With competition so stiff today, barter helps drive those customers past your competition and into your door.”

Always keep in mind that barter is still a business deal. That means you should use the same good sense in making barter decisions as you would if you were paying cash. Check out the company: How long have they been in business? What do their clients say about them? Do they have a showroom, a website and a directory? Are they members of the National Association of Trade Exchanges? These are all important things you need to know before joining a barter exchange.

Lastly, remember that both parties are customers in a transaction. You should expect and extend courtesy, high standards, and a commitment to providing a great product or service.

With these guidelines in mind, gift shop owners can take an ancient practice like barter and put it to work in the modern world.

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