Thursday 23 February

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Don’t Pay for It… Trade for It!
Sunday, 15 August 2010 11:00

Welcome to our new blog… This blog is for anyone interested in learning more about the barter industry, how to get involved in barter and how to succeed in any facet of barter that interests you.

You can trade what you have for what you want. You can start your own local small barter exchange. You can start an exchange for your community or Chamber of Commerce. You can serve your community and start a Time Dollar exchange. Or, you can start an online barter exchange and provide trading services to business members locally, across the nation or throughout the world.

The possibilities are limitless… It just requires some creative thinking and a paradigm shift to using alternative currency instead of cash.

 
Introduction to Barter
Tuesday, 11 November 2008 10:45

Retail Barter

Small business owners conduct barter transactions through membership in commercial trade exchanges. Most members do business within a 35-mile radius.  Their business revolves around services – everything from chiropractors, attorneys, graphic designers, and plastic surgeons to mom-and-pop businesses like dry cleaners and shoe repair.

There are 400 commercial barter exchanges in the U.S. and another 200 worldwide.  The number of members per exchange ranges from about 200 to about 10,000, with most under 1,000.  In total, the business-to-business network of barter exchanges represents over 450,000 companies.

Under the Tax Equity & Fiscal Responsibility Act of 1982 (TEFRA), trade exchanges are classified as third-party record-keepers with the same fiduciary responsibilities as bankers and securities brokers.

 
Corporate Trade

Larger companies trade goods and services through accounts receivable (AR) trading, relying on a corporate barter company to purchase inventory offered for sale with trade credits and subsequently to fulfill the credits by providing goods and services requested by the seller.  The corporate barter company acts as a principal in the barter transaction, buying and selling for its own account and becoming the purchasing agent for clients with regard to the use of their trade dollars.  About seven to ten corporate barter companies do about 95 percent of the corporate trade business.

Corporate barter as it is practiced today originated in the late 1960’s. At that time, corporate barter was primarily a financial tool – a way for companies with excess or obsolete inventories to recover costs and even full wholesale value for their inventories. Today, corporate barter both remains a profitable alternative to markdowns or liquidation and provides a valuable way to expand a company’s advertising and marketing plan using the leverage of a barter transaction. Corporate barter also facilitates foreign trade with countries that have goods and services to exchange but no hard currency. 

Examples of corporate trade are numerous: unfilled trucking on return trips, idle plant equipment, excess maintenance inventory, years on a lease when a company moves, and even stock in a firm. Privately held companies sell restricted stock for trade dollars to offset marketing costs that will help build name recognition and market share, to build trade dollar reserves or to purchase hard assets such as real estate.

 
Benefits of Barter
Tuesday, 11 November 2008 10:23

Businesses large and small choose to barter in order to gain specific benefits

Retail Trade

  • New sales and customers
  • Increased buying power
  • Conservation of cash flow
  • Alternative financing
  • Enhanced quality of life

    • Corporate Barter

  • Convert slow moving inventory into current receivables
  • Put surplus production or capacity to use
  • Increase market share with low cash investment

    • International Countertrade

  • hard currency
  • balance of trade
  • new markets
  • manufacturing capabilities
  • prices of export goods
    •  
    Why Businesses Barter
    Tuesday, 11 November 2008 10:30

    The Department of Commerce says that barter in its various forms accounts for about thirty percent of the world’s total business. The International Reciprocal Trade Association (IRTA) recently announced that U.S. barter transacted through commercial barter brokers exceeds $9 billion annually. Over 450,000 U.S. businesses actively use organized barter.

    There are many good reasons why more and more businesses worldwide are bartering their products and services, but underlying them all is one fundamental business motivation; businesses profit.

    Airlines and restaurants can fill empty seats, hotels and resorts can fill empty rooms, printers can fill press downtime, professionals can fill empty time slots, health care professionals can treat new patients. Business owners and professionals can then take this newfound revenue and reduce cash expenses or expand their operations. 

    Businesses across America are taking a serious look at barter as a way to build their bottom line, and the rapid growth of the online barter industry can only mean that American business likes what today’s barter industry has to offer.

     
    Switching Barter Software Could Cost You $100,000
    Saturday, 20 March 2010 19:23

    Take heed about certain barter software companies that have egregious software use and license agreements. Some companies, such as DoBarter actually impose a $100,000 financial obligation if you use other barter software, switch to a different barter software, allow your programmer or web developer to access their barter software, or decide you want to use your own barter software within one year of using DoBarter software. Do all three and you could accrue a $300,000 financial obligation to DoBarter.

    Following is an excerpt of the DoBarter online Exchange Membership Agreement that can be found at: http://dobarter.com/Membership_Agreement.asp?

    Member Exchange agrees not to use another on-line software provider relating to DarnFast Software Inc. (DoBarter/IBA) while using DarnFast Software Inc. (DoBarter/IBA) software and for a period one (1) day less than one (1) year after termination of use of DarnFast Software Inc. (DoBarter/IBA) software. Member Exchange agrees that violation of this creates a financial obligation of $100,000.00 USD from Member Exchange to DarnFast Software Inc. (DoBarter/IBA).

    Member Exchange agrees that giving software providers or developers access to DarnFast Software Inc. (DoBarter/IBA) system software Site Manager creates a financial obligation of $100,000.00 USD from Member Exchange to DarnFast Software Inc. (DoBarter/IBA).

    Member Exchange agrees use of DarnFast Software Inc. (DoBarter/IBA) system software gives Member Exchange valuable information into the software requirements of DarnFast Software Inc. (DoBarter/IBA) system software. Member Exchange agrees not create, participate in the creation of software relating to DarnFast Software Inc. (DoBarter/IBA) while using DarnFast Software Inc. (DoBarter/IBA) software and for a period one (1) day less than one (1) year after termination of use of DarnFast Software Inc. (DoBarter/IBA) software. Member Exchange agrees that violation of this creates a financial obligation of $100,000.00 USD from Member Exchange to DarnFast Software Inc. (DoBarter/IBA).

     
    Real Estate
    Wednesday, 17 March 2010 21:50

    Real estate provides excellent opportunities to invest Trade Dollars that will generate cash profits. Real estate isn’t a particularly liquid asset, but real estate becomes more valuable over time and provides an excellent inflation hedge and tax shelter. Since Trade Dollars come from selling surplus or from additional new business and have a low incremental cash cost, many investors find that they can be more aggressive in pursuing investments such as real estate.

    Because barter exchange members can earn Trade Dollars without significantly affecting cash flow, investors can buy speculative properties and wait for values to go up. In some cases, it’s even possible to walk away with a pocket full of cash.

    Even if the investor is forced to sell at a paper loss, the sale can still represent a cash profit. Here’s how it works. Let’s say a business has an incremental cost of 35 percent in its Trade Dollars.

    The business owner buys a piece of property for $100,000 trade, so the cash cost in the property is $35,000. If he sells it for $70,000 cash, he has still doubled his cash investment while reporting a $30,000 loss on his taxes. The IRS doesn’t care whether you pay for the property in cash or Trade Dollars. The reportable loss is still the same.

    Investing Trade Dollars in improvements to a hard asset like real estate is another way to generate cash profits on Trade Dollars, since the investment enhances the cash value of the property. For example, a doctor has paid for replastering and painting of a house, had a new sidewalk put in, has renovated a garage, and made other improvements using Trade Dollars. Since the doctor’s cost of a Trade Dollar is only his time, the actual cost of the improvements is negligible.

    Even when a contractor isn’t a member of a barter exchange, members are still able to finance improvements with trade. Vacations, vehicles and building materials can be bought with Trade Dollars, which can then be traded to contractors.

    Where electricians, remodelers, plumbers or other contractors are barter exchange members, owners can easily upgrade the cash value their property. If the real estate is income producing property like rentals, the improvements can generate immediate cash through rent increases.