James Taylor doesn’t need to pay full price for marketing materials.
When his basketball training service needs event T-shirts, he’ll get them half price by making the printer a sponsor.
When he needs fliers, he’ll get a discount by throwing in free advertising space on his website.
Taylor, the chief of Taylored Athletes in Boynton Beach, finds that bartering is widespread in South Florida — and small business owners like himself find it a useful tool in a rocky economy.
“It played such a major role,” Taylor said of bartering, which he began when he started his company in 2007. “Capital was hard to come by and it was how I had to start. . . . It gave you a sense of network and security. You never felt alone with bartering because you know other entrepreneurs are in the same place and want to work.”
As small businesses see their lines of credit shrink and struggle to get loans, exchanging goods ends up being a way to afford extra services and make sure time and products don’t go to waste.
There are two types of bartering — the kind Taylor does by making business deals on a case-by-case basis — and “modern” bartering through organized networks, which is what the International Reciprocal Trade Association measures to be a $10 billion to $12 billion industry globally.
In a slow economy, bartering typically isn’t always the best business option, according to Peter Thompson, chairman of the Economics Department at Florida International University.
“It tells me what they’re having is cash flow problems,” Thompson said. “Some companies have their lines of credit drastically reduced.”
The nonprofit IRTA sets standards for modern bartering, which is conducted through trade associations. About 175,000 businesses in the U.S. belong to such groups — usually by paying a membership fee. They can barter with anyone in the group by earning and spending credits.
IRTA president David Wallach has seen membership jump 15 to 20 percent in the past year, whereas normally it increases 5 to 8 percent annually.
“Businesses are looking for ways to survive,” Wallach said. “If you have excess capacity to do it, why wouldn’t you do it on barter?”
ITEX Payment Systems is one such network with 24,000 businesses. Local brokers bring in members and find good matches.
There are also free websites to post trades such as PayMeWithAChicken.com.
But not every business is always in the mood to make a deal.
“You get turned down all the time,” Taylor said. “Some people, they don’t see the win-win-win. They just see the dollar signs. You can’t fault them because everyone needs to protect their own bottom line.”
For every two companies that tell him no, he finds one that will negotiate a trade.
“If it doesn’t work out, I’m on the phone again with someone else who can give me the same thing,” Taylor said.
There are plenty of firms that find barter deals advantageous.
Davie-based florist Field of Flowers, for example, made a deal with its Plantation-based public relations firm, Boardroom Communications, to lower its bill by paying 20 percent with flower credits. Field of Flowers also exchanges a billing as the official florist of the Florida Panthers for flower credits it extends to Bank Atlantic Center, where the team plays.
Field of Flowers Chief Executive Donn Flipse is open to these types of trades on a case-by-case basis, but keeps it to about three percent of his total business.
“I would look at it much more carefully if it were getting up to more than five percent of our total business,” Flipse said. “I can’t pay my employees with public relations services or visits from Stanley Panther.”
CREATIVE SOLUTIONS
Boardroom uses barter as a creative way to provide employee perks or give gifts to clients. Aside from Field of Flowers, it trades gift certificates with Bolufe, an independent boutique clothing store in Boca Raton and in West Palm Beach. The firm also got bottles of wine from The Grape Merchant for helping with the Weston Wine and Food Festival.
“It really has been a case-by-case basis over the years. We’ve still got to pay the bills,” said Todd Templin, Boardroom’s executive vice president.
But when the service is something the firm can use — and probably didn’t have money in the budget for — it can make sense, he said, especially if the client is having a hard time.
“If it’s a long-term customer, you certainly want to work with them,” Templin added.
Home design television personality and author Kathy Peterson first bartered as a way to solve a payment problem with a client.
When a struggling production company kept avoiding payment for a show she produced, she asked if she could use the company’s studio and equipment to shoot 13 episodes of a show idea she prepared.
“I just said, `I gotta think like a business person that I had to get paid,’ ” Peterson said. “And without hesitation, the guy said, `Sure, no problem.’ ”
GoodLife TV ended up picking up her series in 1999. She’s authored several books and currently appears on the Lifetime television morning show, The Balancing Act, which is produced in Pompano Beach.
Now she has been bartering with her massage therapist who recently moved into a new home. In exchange for offering her help with home design, she gets massages.
SCOOPING UP OFFERS
Felecia Hatcher, the “Chief Popsicle” of the hipster gourmet ice cream truck catering company Feverish Mobile Ice Cream, said she’s had more requests to make deals now than at this time last year. About once a month she is asked for barter discounts for things such as birthday parties and corporate events. The company did Bank Atlantic Center’s company party for half price, with Jamie Foxx concert tickets thrown in as payment. But she wasn’t even in town to use the tickets.
“It’s not fair trade all the time,” Hatcher said.
But as the temperature rises outside, so does her business. In the end, she’s glad to get the exposure.
“I guess there’s always that thing in the back of your mind if it’s going to devalue your business,” Hatcher said. “But overall the experience has been great.”
