Using Trade Deals In A Bad Economy

Posted on April 15, 2009 by - Also by this author

Obviously there is no longer a lot of cash floating around in the industry. I have asked where all the cash is right here on this blog but no one seems to know.
Since the show must go on, I have found myself doing more trade than normal. Because vehicle maintenance is such a high cost of operations, I am grateful that my mechanic loves to ride in limousines. Let’s take a hard look at dollar to dollar.
He charges me $36.80 for the typical lube, oil, and filter. I charge him $517.50 for five hours out in a limousine. That ride provides a total of 14 oil changes for our fleet. The last run we did cost us $131.15 for wages, taxes, workers comp premium, and fuel. If we take that $131.15 and divide that between fourteen oil changes it now translates to a fixed cost of $9.37 per oil change or a savings of $27.43 per oil change.
If you think about it, we have a service/product that everyone wants. Who doesn’t love a limo ride except for us in the business? I have a policy that I don’t pay for any advertising except yellow pages and Internet listings. All advertising is done in trade. Because it is not always an equitable trade, I ask people to give me an exchange rate of 3:1. That is, for every dollar I give them, they give me three. Here is why. Radio ads in my market are about $35 a spot. If I gave a ride for $517.50, I only get 15 commercials. That’s enough to cover two days and effectively make an impression. Two days is not a good campaign. So, if I ask the radio station to give me three times the value, I get $1552.50 in trade dollars and can run 44 commercials.
If you think about it, you can trade almost anything if you find the right person that wants to trade. Anyone else finding trade is a viable way to survive?
View comments or post a comment on this story. (2 Comments)

More LCT Blog Blog Posts

July 25, 2017

"Does No Smoking Mean Weed Too?"

What's the response to that question now that more states are legalizing recreational use of marijuana?

July 18, 2017

Getting It Wrong On Uber’s Return To Austin

See Exhibit A on the misleading spin the limousine industry faces when exposing the unfairness of TNCs.

July 18, 2017

Comic Conventions Can Be A Geeky Goldmine

It’s time to tap into your inner nerd and expand past traditional tradeshow group transportation.

July 6, 2017

Welcoming All Back To The New LCT Blog

JIM LUFF: I'm not retired, tired, or tuned out. Just immersing in other areas of the industry.

March 8, 2017

Immigration Issues Can Hit Limo Operators

Illegal or not, immigrants in one California region spend hard-earned money on renting stretch limousines.

See More

Facebook Comments ()

Comments (2)

Post a Comment



See More

LCT Store

LCT Magazine - July 2017 $12.95 COVER STORY: * Why These Titans Work So Hard to Give it Away * *


Experience the three annual industry events for networking for business, showcasing vehicles and products, and getting the tools for success.

Read About Your Region

What’s Happening Near You?
Click on any state to see the latest industry news and events in that region.

More From The World's Largest Fleet Publisher

Automotive Fleet

The Car and truck fleet and leasing management magazine

Business Fleet

managing 10-50 company vehicles

Fleet Financials

Executive vehicle management

Government Fleet

managing public sector vehicles & equipment


Work Truck Magazine

The number 1 resource for vocational truck fleets

Metro Magazine

Serving the bus and passenger rail industries for more than a century

Schoolbus Fleet

Serving school transportation professionals in the U.S. and Canada

Please sign in or register to .    Close