Should Bartering Be One Of Your Negotiating Skills?

If you can learn how to barter, then you can create more value in your negotiation
If you can learn how to barter, then you can create more value in your negotiation
Image Credit: Katie Putz

When we go looking for new ways that we can be successful during a negotiation, we are often looking for the “next big thing”. We’d like to find a modern negotiating technique that perhaps we’ve not heard of before. However, it turns out that if you really want to expand your negotiating toolbox it might serve you better to spend some time taking a look at something that is actually very old: bartering.

The Power Of Bartering

Why should a negotiator bother to barter? First, and most obviously, it turn out that bartering can save you money. When you successfully exchange unwanted goods or easy-to-provide services instead of money for the things you do want, you can make an efficient deal that protects your side’s bottom line. Bartering can also help you find new customers and may generate referrals. Additionally, you can feel good about the eco-friendly nature of bartering, which often involves recycling old goods rather than buying new ones.

It is well known that small businesses have long taken advantage of bartering opportunities that capitalize on their strengths and their weaknesses. Businesses can trade “underperforming assets” (such as old office equipment or television airtime) for the things they need (from advertising services to truck repair). Large corporations routinely barter unwanted assets as well.

How To Barter

The good news for negotiators is that bartering doesn’t need to be limited to onetime swaps of goods and services between virtual strangers. In more complex, ongoing negotiations, including those between long-term business partners, bartering provides a smart way to avoid getting bogged down in price haggling. Just as you might create value in a negotiation by discussing delivery options and payment plans, you can use bartering to expand the pie by adding new goods and services to the discussion. Here’s the best way to go about using bartering as a part of your next negotiation:

Inventory unwanted assets: When preparing for a negotiation, after determining your target price in the deal, consider whether you could replace some of that cash with items or services that would be easy and inexpensive for you to provide.

Find out what it’s worth: In many cases, the negotiator across the table will appreciate the creative thinking that bartering brings to dealmaking. But after the fact, you could end up with a dissatisfied trading partner if your bartered goods and services turn out to be less useful or valuable than you promised. In the business world, a bartering failure could damage your reputation or that of your organization.

Explain your position: Bartering shouldn’t be a tough sell if the other side is eager to receive what you have offered to give. But sometimes the other party would simply prefer cash. Even so, you may be able to convince the other side to accept what you’re offering if he believes it’s the best you can do and if he has nowhere else to turn.

Barter with caution: Because an excess of bartering arrangements could leave you overworked and cash poor, limit your bartering to a small percentage of sales. In addition, go back to cash when you can.

What All Of This Means For You

Negotiators are always looking for ways to expand their negotiating talents. Although they may be looking for the newest way to get the best deal, it may turn out that they can get what they want if they turn to an older method. Bartering is a powerful tool when used correctly. Bartering is a powerful tool because it allows you to exchange things that you no longer need for things that you do need without having to use money.

Bartering can provide negotiators with a way to avoid getting caught in endless discussions about pricing. In order to be successful during a negotiation you have to start out by inventorying your unwanted assets. Next, you have to find out the value of what you have. Once you know this, you’ll need to explain your position to the other side. Finally, while you are engaged in a barter, you’ll need to remember to be careful and not become overworked and cash poor.

In every negotiation we want to find a way to reach a deal with the other side that will meet both our needs and their needs. It turns out that using bartering is one way that we can accomplish this. Bartering can provide us with a novel way to get rid of things that we no longer need while at the same time meeting the needs of the other side. Consider using bartering during your next negotiation and see how far it can get you.

– Dr. Jim Anderson Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: Can you think of a negotiating situation where you should NOT use bartering?

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What We’ll Be Talking About Next Time

As negotiators we all know that it is all too easy for a negotiation to come to a grinding halt. You and the other side have exchanged a series of offers and counteroffers, and you’ve met somewhere close to the middle—but not close enough. At this point, each side is firmly rooted in its position and there may seem to be no way forward no matter what negotiation styles or negotiating techniques you choose to use. Negotiators understand that this is when it helps to know how to use MESOs in a negotiation.