B is for Barter...

June 21, 2017

Barter (AKA trade) is a payment method used by businesses who generally provide technology or tee time distribution services to golf courses. Barter means a golf course gives away a number of tee times in exchange for technology or distribution services, the company receiving these times then sells and keeps the revenue generated by them. There are a variety of companies who use barter as a payment vehicle in the UK and Irish markets including, Online Tee Times (teetimes.co.uk), Whole in 1 Golf, BRS Golf, Teeofftimes.co.uk and GolfNow.

 

There are a variety of pros and cons to using barter. Here’s our top ones:

 

The pros are: 

  1. Barter can ease cash-flow, most golf clubs have lots of inventory but limited cash.

  2. Barter can help a golf course operator access the latest technology.

  3. Barter can help attract new/different golfers to a facility. 

  4. Barter can help create on-spend at a course, through the golfers that purchased the barter time.

The cons are:

  1. Barter can cause a golf course operator to lose of control of their tee time pricing.

  2. Barter can compete with, and displace a golf course’s own tee time sales when golfers are booking online.

  3. The value for the services provided through a barter agreement can seem opaque. Course operators may struggle to forecast how much they will pay for the services in comparison to others.

  4. The amount of trade sold is not always transparent.

It is important to understand that there are a number of versions of barter/trade tee times, which come under a variety of different names. For example, you can have; rolling barter/trade, which is where the tee time moves through-out the day until it is sold. Fixed barter/trade, where the tee time bartered is a specific time per day. Block n' Roll, this is when 1 player/group books, the remaining player slots move to the next available time and can then be sold again (this can be influenced by the tee sheet you use). It is worth noting most barter operators will enable you to put a price floor in place, along with a time window where the bartered tee times can be sold. 

 

The Revenue Club are neither for nor against trade as a payment method, for us it’s all about proportionality of cost versus benefit, and so what works for some clubs might not work for others. However, we do believe that the total amount paid should provide value for the products and services received. This is no different to if you were paying via a more traditional cash method for any product or service. It can be helpful think of barter is a form of credit, therefore a course operator should expect their provider to earn more from barter sales than if they were to pay them using the traditional cash method. 

 

One of the keys to using barter as a successful payment method is transparency and good management. This allows the golf course operator to understand how much the product/service has cost and then make informed decisions on the value it has provided. There are also a number of other factors to consider when payment is made via barter, such as revenue displacement from different booking channels. Our monthly subscription service is designed to help highlight and manages all factors to ensure a win:win.

 

If you would like further assistance making barter work well for your course then please email us on info@therevenueclub.co.uk.

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