By Bob Andelman
Jan 1, 2009
Corporate Meetings & Incentives Magazine
The economy has forced meeting managers to get creative and look for deals in new places. One of those places is barter exchanges — companies that specialize in bringing together manufacturers and service providers in mostly cashless exchanges of product overstock and inventory. That includes hotel rooms, says Tom McDowell, executive director of the National Association of Trade Exchanges in Mentor, Ohio. “A lot of hotels and resorts are already organized for barter, and those that aren’t are usually open to barter opportunities.”
For example, Les Grafman, publisher and owner of New Parent magazine in White Plains, N.Y., used trade credits for magazine ads to take his entire staff to an industry trade show rather than just 40 percent of the staff, which is what he could have afforded otherwise. Grafman is a regular client of NTA Trade, a barter exchange company based in Niles, Ill.
“Everything went great,” he says. “There were probably 30 room nights involved. We used cash for taxes plus some miscellaneous meals and drinks. But 95 percent of it was on trade.”
How It Works
The essence of barter exchange is this: If your company makes widgets and finds inventory is higher than expected, you might commit $25,000 worth of those widgets to a barter exchange for credit. Meanwhile, across town or across the country, a conference hotel knows that February weekends are its quietest time. It makes 100 rooms and a banquet hall — valued at $25,000 — available to the barter exchange for every weekend in February.
Sales reps at the barter exchange then look for a match. The hotel and the widget manufacturer don’t trade directly. The widget manufacturer might apply its $25,000 in barter credit toward a February weekend at the hotel; the hotel might use its value in advertising, office supplies, equipment for its operations, and so forth.
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Copyright 2009 by Bob Andelman