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Why Barter?

Why Barter? Many of you have heard about the old fashioned trading of baseball cards, or Barbie's. Often an individual will come to you and offer his or her product or service for yours. What did you think? Did you do the trade? What happens when a transaction like this takes place? Who determines value and what happens when you really DON'T want what the other person is offering to you?

There is an alternative. Savvy business owners know the value of barter within their business. What is barter? Simply put it is taking what you have (time, product, service, space or talent) and obtaining what you need or want for your business. Many times you can't put your hands on extra cash, and you are over looking resources that are lying right at your grasp!

Business people barter because they are able to finance the purchases of things they need out of additional sales of their own product or service. When a merchant buys something using barter credits, he knows that the purchase is being offset (i.e., paid for) in whole or in part by extra sales, out of excess inventory or spare capacity, to the barter company or its clients. Barter is a relatively inexpensive method of finance, based on exchanging less productive assets for valuable products or services. Through barter, a firm buys what it needs at the carrying cost of its inventory, thus reducing its cash outlay for the things it buys.

Organized barter organizations are available all around the U.S and abroad. The IRTA (International Reciprocal Trade Exchange) http://www.irta.com reports that approximately $7.87billion was traded through barter companies in 2001 up from 12% in 2000. Survey results that a reasonable industry target for barter is 4% of total business spending.

Example:

A northwest hotel chain with 55 locations had major cash-flow problems and was unable to maintain an advertising budget. With all the competition they needed to advertise but simply could not afford the expense. Their occupancy rate was about 60% with approximately 4600 rooms in the chain. An exchange of accommodations for advertising was the PERFECT solution and a contract with a NW barter company was entered into. The hotel chain traded room nights for 1.2 million dollars worth of advertising and within 6 months increased their occupancy rate by almost 18%. This was accomplished without the use of cash!

Space and time cannot explain the magnitude of balanced economics. This principle is the cornerstone of a booming economy. In a balanced system there is no inflation, and virtually everyone is open for more business. Truly, you can't get enough of this currency. Locate a balanced barter system with trade assistance, no client favoritism, secrets or excessive charges is right in front of your eyes. Don't blink.

SmarterIdeas Inc.

Kathleen's experience in the arena of "Mentoring" has been developed over the past 22 years. Beginning with a long and continued career in the Barter Industry beginning in 1980. This experience afforded her vast knowledge of small business all the way up to large corporate entities. In addition to that she also has an extensive background in management, service and training along with an educational background in ministry including counseling and pastoral care.

Krsmart@smarterideas.com