I recently did an “X Deal.” It’s not my first time either, I’ve actually done a number of X Deals over the years. I had never done an X Deal until I moved to the Philippines, though. I never realized that Filipinos do so many X Deals, but they really do.
What is an “X Deal?”
Is it “X Rated?”
Is my wife OK about it if I do an “X Deal?”
Well, an X Deal is certainly not X Rated. An X Deal is short for an “Exchange Deal.” Basically, it is like bartering. It is really a very popular way to do business in the Philippines.
I am not going to go into the details of the X Deal that I recently completed, I mean that is a business matter that is private between me and the other businessman that I had dealings with. But, let’s look at some examples of what is involved.
As an example, let’s say that I wanted to do an X Deal with the Coca-Cola Company. I have a website that is very popular. The topic of my website is about soft drinks. It’s a natural place for Coca-Cola to put advertising since my tens of thousands of readers are interested in Coke products.
So, I approach Coca-Cola and tell them about my website and that I am interested in negotiating an X Deal with them. I offer to them that I will put certain types of Coke advertising on my site, and in exchange, I want them to give me 50 cases of Coke per month. If they see value in that, they might go for it. Probably they will come back and say something like:
You know, we really would like to do that, but we think that such an ad only is worth 30 cases of Coke per month.
So, of course, there is negotiation on just exactly “how much” each side will receive, and how much they will give. This, of course, is the nature of the business. But, if both sides are expressing an interest, eventually a deal will probably be struck.
Now, why would a company prefer to do an X Deal when they can just outright purchase what they want? Well, a number of reasons:
- Tax reasons. In the USA, if you barter (which is essentially what an X Deal is), you must still pay income tax on the value of the products involved. In the Philippines, though, I am not certain what the law is. I would be very surprised if anybody is really paying taxes on the value of X Deals, though.
- Costs. For example, let’s say that in the example I used, the value of 30 cases of Coke is $150, for the sake of argument. But, it might cost Coke only $40 to actually manufacture that product. So, in essence, they are getting $150 worth of advertising for a cash outlay of just $40. For the website guy, he is giving away something which basically costs him nothing, or very little, for an amount of coke that would cost him $150 to buy in the store.
The X-Deal – It’s a win-win.
So, remember, when you want to make a business deal with somebody and they (or you) may be short on funds, barter, or the “X Deal” may be a path you want to explore. I know that it has worked for me!
Well Bob, that’s Xtreme deal if I may call it–very popular type of business for Tausug, I do not know for Maranao, and Maguindanao.
But as far as I remember it, thats how we deal. BUT may be with slight difference in varition.
That’s a favorate deal in the rural area–and traditional, if I may say so.
Hi NKG – Long time since I hear from you, my friend! How is everything in Iran? I hope you are doing well.
Indeed, the X Deal is a very popular thing, because you can do it without need for a lot of cash!
Got anything you want to trade? 😆
Not only can an X Deal pay off in dollar and cent terms, but it often brings two business owners closer together. People who hardly knew each other before are now partnering … at no out of pocket cost to either … and this can lead to bigger things in the future.
In the often impersonal world of the Internet, it’s hard to keep an important fact in mind .no matter how large the businesses or their deals may be, ALL business deals wind up being person to person … whether it be a clerk selling a can of soda or two CEO negotiating a merger.
X Deals will build business associates and freinds where pure dollars often won’t.
Hi Dave – I enjoy doing X deals. I hadn’t done any for some time, but lately have actually done several. I agree that it brings the two parties together into a closer relationship, and fosters future deals too.
**off topic comment** i have been blogging for few years now and i am earning few dollars. would it be okay if you can help me earn more online? thanks in advance..
Hi Rosemarie – I would help you if I can…. do you have some questions or what can I do to help?
Hi bob! I am trying to raise funds for my high school science club by doing a fun run. I’ve heard about xdeal and just thinking if i can use it to get sponsors? Could you please help me how it’s done? Thanks!!
Hi Ching. If you ate trying to raise monet then an X deal is probably not going to work for you.
Hi Bob, can you give me a sample proposal letter regarding this matter. we are in a car polishes and cleaners company and I want to try xdeal negotiation and might help me to increase my monthly sales. Thank a lot.
I am sorry, I have no proposal letter example to share with you. I usually work by talking to people, not really submitting paper proposals. Good luck to you, though.
How sad but Thanks, anyway.