What to say to a client who offers to pay you not in money, but in his products, services, or other benefits?
A colleague asked me a similar question recently, which reminded me how common this practice is in our web development industry.
goods and services for other goods and services, without using money as
means of exchange, is the definition of barter. It's a common practice
and a good idea when value is exchanged for equal value and equal
Let's say that the client approaches you for your web development services and offers to barter the following with you:
- his own or third party physical products, I.e. office furniture
- his own or third party digital products, I.e. software
- his own or third party services, I.e. his consulting services
- advertising, exposure or some form of public visibility, I.e. an ad in a print newspaper
- something cool, like an iPad, a MacBook, an exotic vacation
- ownership in his (future) company or stocks
- alternate forms of payment, like coupons
What all these tempting offers have in common is this:
- You can find some use in your business.
- They seem very expensive to you, something you would never normally buy because "you can't afford it".
- The offer is usually cool in some way.
Four main reasons why barters are mostly a bad idea
Reason number one: what you'll get is not what you really need, in 99% of the cases.
Sure, that vacation sounds awesome, and so does the expensive full-page ad in a popular newspaper, or a cool guitar.
do you really need this, badly? Can you extract enough value from those
offers to grow your business? Hopefully you're not looking to satisfy
the inner child in you.
And if you need this so badly, why can't you afford it? People only "badly" need things they can really afford.
For example, I currently cannot afford to buy a Tesla car (and by 'I
can't afford it' I mean I haven't found a way to extract enough value
from that car to make it worth my while and my money). BUT I badly need
to get from point A to point B, so I bought a decent car I can afford.
If someone offered to pay me with a Tesla car, I might be tempted to
take that offer - but I do not really need it. I would end up working my
butt off for something I don't really need.
Reason number two: you'd probably be signing up for a ridiculously disproportionate effort.