PROBLEM INVENTORY = PROFITABLE SALES

While trade (a.k.a. ‘reciprocal’ or ‘recip.’) has been around since the very first unsold avail, it is always a surprise to me how little many vendors understand it, and fail to include it as a part of their business model. Consider: As the present economy develops further and becomes even more uncertain, trade will become an even more significant resource; often making the difference between profit and loss for some.

Why do many vendors tend to view trade with such a jaundiced eye, perceiving it as a strategy of last resort? I’ve heard on more than one occasion salespeople say: “If we have to trade, we haven’t done our job properly.” Hmm. Well, how about this approach - Try this simple transposition – instead of using the word ‘trade’, substitute ‘structured finance’. For example: “We plan to use a new strategy of structured finance to convert some of our excess availability this quarter”.

Why can trade be considered a form of structured finance?

The following are just a few aspects of the power of integrating trade into your sales strategy, often over-looked but, readily available to employ.

Closing A Sale

Trade can be used to close the difference between your quoted price and the client’s budget. What if the client only has 70% of the budget called for to make a buy with you? Trade can be used to close the gap on the deficient budget.

Leverage

Trade is typically negotiated on a simultaneous basis and can often be received prior to a schedule running. If the trade is for needed goods and services that couldn’t be budgeted for, why wait till the next quarter or budget review if the inventory is available now to supply your needs.

Cash Flow

Given that many customers will pay you anywhere form 60 – 120 days from date of invoice, trade offers an accelerated timeline for receipt of ‘good funds’ where the products or services you are acquiring can be obtained immediately.

Transparency

There isn’t any, which is one of the most powerful aspects of this strategy! Any client, agency or competitor driving by your board doesn’t know which client paid cash and / or trade.

Inventory Management

When trading, in actuality you are not going off rate card. Whether receiving goods or services, in almost all cases, these are typically exchanged at retail price against your top of the line rate card. This cannot be over-stated: For all intents and purposes, you are moving unsold inventory for things you would otherwise spend cash on. The clients you clear on trade enable you to close gaps in your availability, enabling you to maintain higher rate card levels for paid (cash) advertisers.

It’s All In The Execution

Have a plan. Just as you would make sales forecasts for your inventory, also have an adjacent plan to integrate trade where and when a sales cycle might be off. And, keep a list of products and services most useful to you.

Qualify all prospective advertisers as being ‘trade eligible’; normally defined as attributable to a product that has not advertised or for which availabilities have not been requested on a cash basis for the prior 12 months of the client’s clearance request. Eligibility should be determined by product to be advertised (not the parent company), as different products have different budgets.

Good luck and good trading!

Broadcast Marketing Corp. has been a premier member of the GON since 2006.

http://www.greatoutdoornetwork.com/GON/BMCNY

Contact

Contact Person:	Jeff Wolfman
Skype:	jwolfman
Direct Phone:	718-921-5889

About

Jeff Wolfman, President of Broadcast Marketing Corp., is a 25-year veteran of the media buying, media sales and trade industries. BMC has executed trade transactions with over 5,000 media facilities for placement of over half of the top 100 LNAs in the U.S., including one third of the Fortune 500.

Company

Company:	Broadcast Marketing Corp.
City:	Brooklyn
State:	NY
Zip Code:	11209
Country:	USA
Address:	8306 Third Avenue
Phone #:	718-921-5889
Fax #:	206-350-0335

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