How Bartering (Yes Bartering), Can Help Your Brewery Cash Flow

Most people think of bartering as a long past method of exchange, maybe thinking of a medieval market from centuries ago. I can assure you that bartering is alive and well and could be another ‘club in the bag’ for your brewery this year.

Bartering is the exchanging of goods and/or services for other goods and/or services. It typically does not involve cash as part of the transaction. So how does trying this new approach help your brewery?

1. You are improving your cash flow. You’ll hear me say this time and time again that any improvement in cash flow is a good thing. So, by utilizing a barter program to work with another small business to trade goods or services vs cash, will almost always result in a strong procurement win for both organizations.

2. You get more VALUE in barter trade. Why more ‘value’? Because you are using your resources at cost, but exchanging them for market value. To give you an example, let’s say you are able to trade 10 cases of beer that retail at $360 total (cost $130 total), for marketing services on an upcoming IPA fest.

You have been able to get more out of that trade than simply paying the marketing partner $360 for services. Yes, some will talk about the lost potential revenue of those 10 cases. But you got more value from those 10 cases in the trade than selling them on a shelf in a grocery store.

3. Easier to establish a Win-Win. In that same example from number 2, you the brewery are getting more value because you are using the cost of your goods to get market value from the trade. But so is the company you are trading with (i.e. the marketing company). The reason this works well with small businesses and on a smaller scale is that both companies are getting higher value for their services by leveraging just the cost.

It might be a little clunky to get started, but it never hurts to ask. Some examples of bartering that breweries/distilleries are trying or that we have heard about:

• Setting up a festival – talk to people about working the event for beer, not pay.
• Marketing for a festival – beer for collateral material (printing, koozies, etc.).
• Getting booths or gear, talk to your provider about a trade for sponsorship vs cash.
• Have event space in your taproom. Talk to vendors about the use of the space at no charge for an event they might need coming up.
• Talk to suppliers who also sell directly to customers. If your merch provider would be interested in setting up a booth on weekends or at a festival in place of sending you the next invoice on your order.

Give it a try the next time you are talking to a fellow small business and the fee comes up; ‘before anyone issues an invoice, have you ever done an exchange of product for services? Do you think you might be interested in trying that?’ It can be that easy to get the conversation started.

PLEASE NOTE, talk to your accountant first. Bartering is legal in the US, but that doesn’t mean there aren’t rules when it comes to taxes or restrictions (especially when trading alcohol). But don’t let a little due diligence stop you from finding creative ways to improve cash flow and run a little leaner this year!