Using Trade Deals In A Bad Economy

Jim Luff
Posted on April 15, 2009
TRADING SERVICE, PRODUCT AND ADVERTISING: 
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?

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Comments ( 2 )
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  • Jim Luff

     | about 9 years ago

    Eli,What market are you located in? Print advertising right now might be a little rough to do trade in. Specially newspaper. Advertisers are not paying their bills and less people are advertising in this bad economy. Newspapers are closing left and right as the web makes them obsolete things of the past. Why wait for tomorrow's morning paper when you can log on now and get today's news today? That is what gives there.Focus on small publications such as neighborhood publications, church publications and the like for a better response. For the record, I am not a big fan of print media.Try going to radio stations. They have more of a need for your services than newspapers. Radio stations use contests to keep listeners tuned in. Come up with your own contest such as Free Lunch Friday where you take a group of 8 "winners" to lunch each Friday. Find a restaurant willing to feed the 8 people once a week in exchange for being on the radio every single day without spending any cash.Good luck!

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