Why Bartering Doesn’t Work

Feb 27, 2015

Even though it makes sense in theory, bartering is actually one of the worst things you can do in your business… here’s why

Have you ever bartered your services? This is where you offer your services at no cost to someone and in exchange, they offer their services to you at no cost.

If yes, how did it work for you?

Personally, I believe that bartering is one of the worst things you can do as an entrepreneur in your small business.

In theory, bartering makes sense. Someone has something that you want and you have something that they want – it should work just fine – right? Wrong.

Bartering can work when it comes to exchanging products. However, bartering does not work when it comes to exchanging services. In fact, bartering is one of the worst things you can do in your small business.

Here’s why I feel so strongly about this – Bartering comes from a place of lack.

When someone asks if you want to barter with you, it essentially means that they are not willing to pay you for your services.

It could be because they don’t have the money, they think they don’t have the money or they simply don’t want to spend their money on you or your services.

Regardless of the reason, a bartering connection sets up a relationship based on lack, not a relationship based on expansion.

When someone pays you for your services and you pay them for their services, it’s a way of saying “I value you for what you’re bringing to the table”.    Money is simply a way to exchanging value.

And if you’re thinking, “I really like this person, maybe down the road they will pay me for my services.”, let me tell you, this is not likely to happen.

When you say yes to bartering, you are agreeing to work for free. Why would someone pay you for work down the road when you’ve already been willing to do it for free?

If you insist that you do value someone else’s services and you want to exchange their services for yours, do so by exchanging the same amount of money and being very clear about what you’re going to provide and what you will receive in exchange.

Personally, I’d like to encourage entrepreneurs to avoid bartering and putting themselves in a situation where they’re not getting paid to do the work that they specialize in doing.

If you’ve asked someone to barter or provide you with a discount, ask yourself why you aren’t willing to invest in their services? And, don’t be surprised if someone isn’t willing to pay you.

If you’ve ever bartered in your business, I’d love to hear from you. Did it work? What worked well or didn’t work? Please post your thoughts below.

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10 Comments

  1. Sheryl Jones-Queen of Hearts

    I totally agree Tina. I work with individuals with disabilities and the service I provide is paid by the State of Texas. When they no longer qualify because the family income increases, they don’t want to pay for the services that they previously thought was so GREAT. Now they will not pay for the same services. I have learned I must market to other clients who do not get government assistance. Great video, I appreciate your kind words and assistance as I modify my current model of business.

    Reply
  2. Christina

    Totally agree. The last bartering exchange I did was the one that taught me never to do it again. Not only did we reinforce each other’s lack, but this was with another coach-healer and we were ignorant enough to engage in both coaching relationships at the same time. The power dynamics – the way we used each other’s weaknesses to avoid really getting coached – was just ugly. The good news is that I learned two lessons from that experience: don’t barter, and don’t sign up to be coached by someone who is currently a client.

    Reply
  3. Yaritza Baez

    I agree. I think people don’t really value what you have to offer. If you barter it leaves you with bad taste. I’d rather do strategic alliances where both parties put the same amount of effort and both can benefit.

    Reply
  4. Janet Edmiston Smith

    People do not value what they do not pay for. I see this over and over with my clients.

    Reply
  5. Angela

    I love the idea of paying each other the same amount. Energetically, I get it.

    Reply
  6. Pam Blackman

    I agree. It also seems that people are also not vested. I’m guessing it’s because there is no real, hard cash on the table. And…here in the U.S. there is a taxing aspect, as well. Actually have to deal with it when you file every year.

    I haven’t done the bartering thing, but at one time I did do the pro-bono thing. Major fails. I was fully into delivering on my promises because I wanted to gain the credibility and social proof. I kept my part of the bargain every time…except i could never follow through to the end because the other party would back-burner things.

    A great topic I’d absolutely love to see you cover would be along those lines, or comment here. How to get social proof without giving up your soul. (Hey…that’s what it felt like). Lol.

    Reply
    • tinaforsyth

      Good point Pam – pro-bono is even worse than bartering imo as there is no exchange at all. And not sure what you mean re: getting social proof without giving up your soul?

      Reply
      • Pam Blackman

        I just mean that, when you give services away, you can come away feeling de-valued. I’ve heard several business coaches over the years suggest giving away services to gain credibility (i.e. social proof), but as you point out – when there is no money involved there is a different mind-set on both parts. In my past experiences, early on, it felt like I’d given a lot of me away because, when the money wasn’t on the table, it was really easy for the pro-bono clients to let those projects go on the back-burner. So I would walk away feeling devalued. Hope that makes better sense. Thanks to TnT I learned my lesson!

        Reply
  7. Sarah

    Respectfully and totally disagree. I LOVE it!

    Let me clarify. I am a coach. I collect (and deal in, from time to time) antiques. Quilts in particular. I will partially exchange my coaching fee for Grandma’s Drunkard’s Path or Aunt Matilda’s Sun Bonnet Babies. Part of the beauty is knowing from where this piece of history comes, and creates a nice connection with a client who parts with an heirloom knowing that it’s going to someone that will honor it. I’m right now doing a rebrand, and my ‘pay me’ page is being called “Will Coach for Quilts”! This may not make up over 10% of my revenue, but so far, the feedback from even those clients who don’t have family heirloom I’d be interested in and pay cash have loved the idea as well.

    I love being known for thinking outside the box, and yes, I am very comfortable with making and honoring boundaries, so get in touch if you’ve got a vintage quilt with some provenance!

    Reply
    • tinaforsyth

      This is great Sarah – a very purposeful and well thought out way to approach bartering that works for you (and you get some great quilts in the process! fun)

      Reply

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