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This just in from Business West Online -

Barter 2.0: Money Reinvented

This Practice Gives New Meaning to the Phrase ‘Trade Policy' 

By TRISH TRUITT | Business West

RETURN TO ITEX BUSINESS BARTER SERVICES


This just in from the  -









More health professionals are bartering their services

July 11, 2009
BY MONIFA THOMAS 
Health Reporter/mjthomas@suntimes.com

When Lincoln Park dentist Adrian Codel cleans a patient's teeth, it's not unusual for him to get his house cleaned as payment.

Codel is among a small but growing number of health care professionals whose patients barter home repairs, party planning and travel vouchers for teeth cleanings, check-ups and eye exams.

Dentists, eye doctors and chiropractors are particularly in demand for these exchanges because their services often aren't covered by insurance.

"Health care providers do well in the bartering world because the cost of insurance is high, and it's not necessarily covering things like eye care and dental work," said John Hora, vice president and co-owner of Art of Barter, an Elgin-based company that facilitates exchanges among 1,400 Chicago area businesses.
"We're finding more and more physicians and health care professionals becoming more barter-savvy," Hora said.

In a typical exchange, a dentist would trade a $600 tooth whitening for 600 barter credits from his patient's barter group account.

The dentist could then redeem those credits for services that are provided by other businesses in the group.
Art of Barter gets a 10 percent cut of transactions made between its members, most of which are small businesses.

Bartering between businesses is legal as long as proper documentation is kept and sales are reported as taxable income, the Internal Revenue Service says.

David Wallach, president of the International Reciprocal Trade Association, estimates that $11 billion in barter transactions are made each year in North America.

Codel has used his barter credits to get the floor in his office refinished, "buy" ink and toner for his dental practice and take trips to Lake Geneva. He also gets his house cleaned every other week. But bartering can be even more valuable as a marketing tool for his business, he said.

"If I can get one barter patient who can recommend me to five cash-paying customers, that's a good investment," he said.

Less than 5 percent of Codel's patients pay in trade. One of them is Dan Merlo, a photographer who has used barter credits for "everything from general cleaning and dentistry to a root canal and crown replacements," he said.

Because he lacks dental insurance, Merlo said it would have been "a huge strain" to pay out of pocket for the work he has had done on his teeth.

"I had to go into debt just to pay for an initial reworking of my fillings and teeth," said Merlo, of Logan Square.
"When I was able to use barter credits for the dentist, I was really excited about that."

Merlo said bartering also has helped him pick up clients for his photography business that he might not have gotten otherwise.

Surprisingly, though, the sour economy hasn't increased demand for in-trade exchanges, health care providers say.

"You would think it'd be something more people would want to do, but the economy has slowed everything down," said optometrist Robert Levine of Advanced Eyecare Consultants in Libertyville, who has been bartering with his patients for 15 years.


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REFLECTIONS ON THE ECONOMY
... and the role of ITEX 

The collapse of the U.S. housing bubble, the failure of banks and the crash of financial markets has put a strain on business owners worldwide. While the more optimistic pundits talk of a recovery sometime in 2010, and the less encouraged "experts" believe we may have 2 1/2 more years to go, there are measures we can enact today to increase our bottom line until cash, once again, starts flowing freely into the marketplace.

There's an old expression, the exact wording of which escape me, but the gist of it is "it's not about how much money you receive, it's about how much you keep". If the current temporary economic climate has caused your revenue to decline, some, most or the entire decline can be balanced by cutting expenses. This is where ITEX can help. Over the years, many members have told me that they continue to pay cash for goods and services that are available on trade because they didn’t want to change vendors. Perhaps, in some cases, it's time to rethink that strategy. Perhaps it's time to discover new places to spend ITEX dollars, which in turn, helps you keep cash in the bank. Send me an email.

As decreased revenues force your competitors to close their doors or cut back on advertising, this is an excellent time to use your ITEX Dollars to strengthen your marketing efforts and capture some of the market they leave behind. Through the ITEX co-op advertising program, you can advertise on trade, at 50% of the cash cost. Give us a call.

In the early 90's, I used to carry a VHS tape I created, with segments from the NBC News, hosted by Tom Brokaw, and the CBS News, hosted by Dan Rather. The segments addressed the bad economic climate and how savvy business owners were using barter to ride out the storm. Very little was known about my industry then, and that tape helped me to convince prospects that barter was a real business. In becoming the Western Hemisphere’s largest barter network, ITEX has grown from the 35 offices we had then, to 100 offices in 2009. Today, dozens of stories are written and broadcasted monthly about the benefits of barter, and it won't be long into the future, before we will look back at how we survived the current downturn. Let us insulate you against the economic vicissitudes we experience, while your competition struggles alone. Give us an indication where we can help you to reduce cash expenses, and we'll help you increase your bottom line. Work with us, and we'll all stay ahead of the curve to prosperity.

Give the office a call, send me an email or simply hit “reply” and say nothing, and I’ll send you a want list. Indicate what you want, write in anything not listed, and email it back or fax it to (702) 796-0754. Start saving more money.

Of course, if you want to use your ITEX to take the vacation that might otherwise have been put on the back burner, there’s that too.

 -- David Heller | ITEX BARTER SYSTEMS

The cat is out of the bag now – the evening news is now reporting that the economy has been in recession of over a year, as if most of us didn’t already know it!  Modern Trade and Barter is surging and major publications like New York Times and Business Week (below) are singing its praises to small business owners like never before.  The many MC members who have already joined can attest!

ITEX is North America's biggest and most active barter trade exchange - ITEX "trade dollars" are accepted at over 25,000 member businesses nationally.  Find out how ITEX 21 Century Barter can help your small business stay ahead!

 -- David Heller | ITEX Business Barter Exchange

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 Barter exchanges catch

on as credit tightens

Shawn Cressman, president of Cressman's Lawn & Tree Care, the business his father started 33 years ago in Bethlehem, Pa., has occasionally engaged in bartering with other outfits over the years. But transactions were usually informal and not necessarily directly tied to the company's bottom line.

These days, though, Cressman sees bartering as a significant way to reduce cash outflow. Last fall he joined the Stroudsburg (Pa.) Merchants Barter Exchange, an association that coordinates and organizes trading of products and services among its more than 10,000 business members. In September, when the transmission blew on one of the firm's trucks, Cressman turned to the exchange and bartered for a replacement.

"That would have cost between $1,500 and $2,000, and that was not in my budget," he says. He also bartered to acquire a $4,000 piece of stone-crushing equipment. "I probably wouldn't have bought one this year," he says. "It would have had too much of an impact on my cash flow." But as a result of strategic bartering, Cressman estimates he has been able to save about $6,000 total so far this year.

In recent years, bartering has gained currency as a relatively easy path for small outfits to attain goods and services without having to dig into their coffers. It has also become a successful channel to attract new customers and expand one's business. According to the most recent numbers compiled by the National Association of Trade Exchanges (NATE) in Mentor, Ohio, some 400 barter exchanges in the U.S. and Canada generate transactions worth $4 billion a year.

On the Upswing

And now, with banks cutting back on credit lines or shutting them down altogether, the use of barter has gained renewed momentum. Notably, Thailand, the world's largest rice exporter, last month announced it planned to barter rice for oil from Iran, one of world's top 10 rice importers. For small businesses, ramping up their own use of barter is a strategy that allows them to reserve cash and still expand operations at a time when credit lines have yet to thaw.

Tom McDowell, executive director of NATE, says he has seen a 10% to 12% increase in new clients joining organized barter exchanges. "Suddenly, [business owners] were running into different obstacles, and they started looking for other avenues for resources, not just credit," he says. "The interesting thing that is happening in this economy is that businesses still have inventory and capacity. They still have expenses. What they don't have is customers."

Barter exchanges are fee-based membership groups. Typically, barter dollars are issued when a member performs a service or offers a product that can then be used to purchase goods or services of another member within the exchange. (The exchange receives a commission on the "purchase" side of the transaction.) Most exchanges work on a 50-50 cash-to-barter system, while others, such as Merchants Barter Exchange, operate as a 100% barter trade system. Most offer lines of credit that can be used to snap up a host of items, from carpet cleaning services to office supplies to large equipment.

A Way to Get Credit

Merchants' founder, Steve Bolles, says membership in his eight-year-old exchange, which has offices in 30 states, has tripled this year. As the financial situation remains bleak, Merchants continues to ramp up clients. "Just 18 months ago, when we would go and talk to business owners about signing up, they would say, 'We don't need to talk to you.' Now everybody gives us an appointment." A strong inducement: "Everyone we sign up gets a line of credit right away," Bolles says.

"Most people are looking to conserve cash," says Ralph Sigler, who owns Carolina Packaging & Supply in Raleigh, N.C., and belongs to two different exchanges. "We started bartering about 12 years ago. The way we were growing, it made sense to substitute barter dollars for cash dollars." Sigler says he bartered to obtain everything from security system installations to letterhead and envelopes. "I've saved anywhere from $20,000 to $25,000 a year by bartering, and I've also taken on a lot of new accounts."

Bartering serves as another avenue to help keep businesses afloat. "I would say my bartering has gone up 20% in the past six months," says Mike Cody, owner of Chip & Crack Windshield Repair in Garner, N.C. "At first I used it for hotel stays and gifts to employees." Now he says he has begun to barter to obtain equipment for his business instead of having to spend cash. "If I were to make a guess, I'd say that I've saved over $1,000 this year."

"Eventually we will see a shift in thinking," says NATE's McDowell. "What will happen is that people who were reluctant to use the credit line, or used it sparingly, will see the tremendous credit crunch and will look for new resources. They will find that they can use trade exchanges."

Stacy Perman is a staff writer for BusinessWeek.com in New York.

What is Barter?

Barter or trade is a powerful tool that represents a solution for companies with available inventory or services. By accepting payment in trade dollars instead of cash, a business maximizes their efficiency by increasing inventory turnover or billable hours. Using the trade dollars earned, that company can purchase goods or services they want - without paying cash.

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A Multi-Billion Dollar Industry

According to the International Reciprocal Trade Association (IRTA) estimates just in the U.S., over 470,000 companies actively participate in barter for a total of over $12 billion in annual sales. Over 65% of the corporations listed in the New York Stock Exchange are presently using Barter to reduce surplus inventory and bolster sales and to ensure that production facilities run at near capacity.

The U.S. Department of Commerce estimates that 20 to 25% of world trade is now barter, and corporate barter is now a 20 billion dollar industry. Barter continues to carve out an important place in the U.S. and world economy.

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How Does Barter Work with a Trade Exchange?

An ITEX Trade Rep works with you to bring your company new sales and increased market share, to move available inventory and to minimize cash outlay for everyday business expenses. Clients of an exchange use trade dollars, instead of cash, to handle their transactions. ITEX provides you with an alternate distribution network.

You can charge retail value for goods and services in trade dollars, instead of selling them for reduced rates in cash or having them go unsold. An exchange acts as a third-party record keeper, providing clients with monthly statements that reflect all trade purchases and sales and show the current trade-dollar balance.

How Barter Works:

 

What are the Benefits of Trading?

1. Barter Generates New Customers,
   allowing you to expand your market and maintain your cash paying customers. This is incremental business - customers who bypass competing businesses to do business with you.
2. Barter Conserves Cash and Increases Profits:
   Barter creates new customers because buyers are motivated to pay with their products or services and save cash. Simply put - if you had to purchase a copier for $1000 - what would you rather do? Write a check or pay with an equal amount of your product/service at its normal selling price to a new customer? Most businesses prefer to trade and conserve cash.
3. Barter Moves Excess Inventory:
   Retailers: Retailers must keep their inventory moving. Each season, customers shop for the most current merchandise. Barter Business Unlimited will bring you buyers to move excess inventory, eliminating the advertising costs and heavy discounting otherwise needed to accomplish this.
4. Manufacturers/Wholesalers:
   We can coordinate the selling of your surplus inventory, while helping you obtain the best possible prices for your products. We negotiate for you to receive either the going price in the marketplace or at least your full normal selling price to distributors. This allows you to maintain your current pricing integrity as well as upgrading your return on investment.
5. Increase Productivity by Filling Downtime and Unused Capacity:
   Service Business: Increase billable hours! If you are not at 100% capacity twelve months a year and can handle new customers, we can help you fill your idle time with new business opportunities. And now you will have trade dollars to purchase what you need.
6. Hotels:
   Suppose you have 10 vacant rooms at $100 a night and you need a new brochure for $1000. Barter provides a way for you to buy your brochure, fill your rooms (at your cost on the rooms) and maintain your cash.
7. Manufacturers:
   If you are currently operating at 90% capacity, going to 93% changes very little in the cost of production. Wouldn't it make sense to take on a new barter customer to cover the cost of next year's product catalog?
8. Networking Expands Your Customer Base:
   Barter customers will bring you all of the cash referrals that your present clients bring. You will gain new cash paying customers too - as long as you give your barter customers the same great services and pricing as you offer everyone else.

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How Do We Market Your Business?

1. ITEX trade brokers phone member businesses that regularly purchase your products or services and facilitate an introduction. Our brokers become part of your sales force.
2. ITEX places your ads in our weekly newsletters - free of charge. Newsletters are emailed to thousands of member businesses.
3. We send daily emails where we sell your products and promote your services.
4. We place your specials on our regular Trade Flash. This is a great way to move inventory quickly or fill a vacant seat at an event.
5. We provide a listing in our online membership directory.
6. We produce trade shows for member businesses where they can display what their company has to offer.
7. We host informal gatherings where members can Network.
8. We distribute your flyers and brochures through our direct mail program to member businesses.
9. We provide regional and national exposure to businesses looking to expand their horizons.
10. We connect your web page to our active member shopping mall on the World Wide Web.
    

It’s a bit of a paradox, but perfectly logical, actually: The worse the economy gets, the better the barter system opportumties.  In my 20-years in the commercial small business barter business I have never seen things THIS GOOD!

       -- David Heller | ITEX Barter Systems Las Vegas 

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Hard times bring barter back into vogue

When it comes to being in vogue in Britain, barter is – as they say – the new black.

Reuters | Thursday, 16 October 2008

Rising inflation, a credit squeeze, crumbling stock markets and a slowing economy with job losses looming have prompted an explosion of cyber markets where consumers can get what they want without spending any of their precious and dwindling cash.

Swap shops for everything from clothes to books to toys and games are springing up all over the world wide web – and some have developed their own virtual currencies.

"Our business is going up and up," Jonathan Attwood, director of the SwapitShop.com barter Website for young people, said.

"Last month alone we had more than 40,000 new subscribers, and our members are now trading more than a quarter of a million of pounds worth of goods every month."

Attwood reckons some £5.9 billion ($NZ16.95 billion) are tied up in unused games, music and toys lying around in kids' bedrooms, and through barter sites like his, "savvy kids are unlocking one of Britain's biggest hidden resources."

Adults too, with an estimated 2.4 billion unworn items hanging in wardrobes across Britain, are getting wise to cyber bartering.

As food and fuel price inflation takes ever larger chunks out of tightening family budgets, bartering has swiftly turned from an idea prompted by a desire to be environmentally aware or join the vintage fashion trend, into a basic necessity.

Andy Lenney founded the Bigwardrobe.com clothes swapping site four months ago and admits the "timing could not have been better" with 150 new people a day signing up to trade clothes they no longer want for others' eye-catching cast-offs.

"Clothes swapping is no longer the preserve of the tree huggers, it's cool to be green and recycle, and it's fashionable to be thrifty," he said. "The credit crunch has been a massive help for us."

Attwood, whose site has its own currency "swapits", says a simple shortage of cash is driving his business.

When times are hard, he says, people feel good about using something old to get something new, and with barter there is no guilt about reckless spending.

"Kids are natural traders anyway, and now they are getting less pocket money and their parents are less willing to buy things for them," he said. "Swapping is the natural solution."

Andrew Bathgate, who launched ReadItSwapIt.com for book lovers to trade old for new for nothing, tells a similar tale.

Barely three months ago, his site was seeing steady business of around 7000 book swap requests a month. The number has now shot up 15,000 a month, with a cash-free book swap taking place every three minutes.

"Books can be an expensive hobby. . . and at times of cost cutting people may not have the spare cash," he said.

"We've seen people taking advantage of swapping more and more – not only are more people joining but people are also swapping almost twice as frequently as they were a year ago."

The bartering business is also spreading beyond physical commodities into services and specialist trades.

On the Barter Swap UK website, Fiona, a qualified teacher in Devon, southwest England, is offering tutoring for children up to age 11 in return for someone to lay wooden flooring in her conservatory, while Catherine, also in Devon, is offering the use of a holiday home in Austria to anyone who will transport her furniture there.

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Bartering gives businesses alternate way to pay

David Morrill, BUSINESS WRITER | Oakland-Tribune

WHEN Henry Vortriede opened Montclair Bistro about 20 months ago, he was confident it would succeed.

But to truly compete with the best culinary establishments in the East Bay, he also knew that his restaurant was missing one central ingredient: a state-of-the-art banquet room for corporate events and wedding receptions.

Vortriede had to have one, but because so many restaurants fail within the first few years he also knew that he couldn't risk burning through the Oakland establishment's cash. Especially when it would cost about $60,000 to build.

But Vortriede found another way to get his banquet room built. He turned to bartering -- the practice of trading one business' service for another's in lieu of cash.

Barter expert and small-business adviser Lynnea Bylund, president and chief executive of Catalyst House Inc., says that if used wisely, bartering can really help a company get off the ground and eventually flourish: "When capital is scarce, barter should be looked at as another currency that keeps things moving during tight times," Bylund said. "For businesses that have unsold inventory on their shelf or service professionals with unbilled hours, using barter is  a way to get value that would otherwise be lost."

"Without having to use up our cash, we now have something that looks like a room you'd find at The Ritz-Carlton for the price of throwing a few parties," he said.

Almost everybody has heard of bartering, but not everyone fully understands it. Bartering is often misconstrued as another term for an "under-the-table" type of deal. But the kind Vortriede is involved with is 100 percent legal, and experts call it a legitimate tool to help a business grow. There are even exchange services that help streamline the barter process.

"Getting into barter is like a mini-economy that you join," said Steven Van Yoder, who barters his marketing and public relations services through his San Francisco-based Get the Word Out Communications. "When businesses find out there's a way to trade services, there's this suspicion that this is too good to be true, but really it is common sense."

In simplest terms, bartering is a way of saying, "I have something you want, you have something I want, so let's trade."

Two children in a schoolyard who trade a bag of chips and two chocolate chip cookies for baseball cards are making a barter-like trade.

"If you think about it, bartering has been around for years," said Jeff Bondoc, owner of Amcon Sunrooms Inc. in Hayward. "I mean, way back when, there were people saying, 'I'll trade you some rice and potatoes for a few cows.'"

The most well-known form of the practice is direct bartering. An example of this is an ad on a Web site or community bulletin board that says, "Will trade nanny service for a place to stay."

But for this method to work, at least two people need to have an interest in each other's service or product at the same time. In the previous example, if a couple have a place to stay but don't need nanny service because they don't have children, the trade would never work.

There is, however, a way around such problems -- a third-party barter organization.

With third-party groups, you don't have to obtain a return service or product from the same person to whom you provide the product or service.

Referred to as non-reciprocal trading, you get the cash equivalent of the service or product that you provided in "barter currency." That credit can then be used with any other provider involved with the barter organization.

Ron White, owner of Sign-A-Rama in Oakland, has taken a cruise, bought a car and recently a boat for himself from barter credit he has built up.

"I'm the sign guy, and everybody seems like they need a sign," said White, who's a member of the barter organization BizXchange. "It used to be where I'd go into an auto store, and it would be like, 'I'll make you a sign if you fix my car.' But now it is really a lot easier than that."

CONTINUE READING ONLINE

For nearly two decades Barter News has been the prime source of information about the barter and trade exchange industry serving small businesses.  Here is a recent post from BN.

        -- David Heller | Small Business Trade Exchange  

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Barter is a terrific way for small businesses to expand sales and significantly improve their bottom-line.  But we refer to “well-managed” barter and there are pit-falls that must be avoided.  – David | ITEX Barter System  

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Barter for Small Business?

SOURCE:  moreBusiness.com

As the economy continues to plummet, business owners everywhere are discovering the advantages of 21st-century barter through ITEX! 

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Sinking economy is causing a boomlet in one area: bartering

Pam Voigt was desperate.

Her family's dog was lying in an animal clinic, doped up and nursing a broken hind leg. The evening before, Tasha, a black-and-brown Doberman pinscher, had chased a deer onto a road in North Royalton, Ohio, and was smacked by a passing vehicle.

The leg could be fixed, the surgeon had said, but it would set Voigt back $4,000.

Voigt loves Tasha, but $4,000 was a lot of money. Crying and confused, she called around to other veterinarians, but none could perform the surgery.

Then she called Jeff Fogle at the Richfield Animal Medical Center. Fogle and Voigt both belong to a network of small businesses called ITEX Corp. Its members provide goods and services to one another without exchanging cash.

Not only could Fogle fix Tasha's leg; he would charge Voigt only $1,600. Better yet, Voigt could pay for the surgery using trade credit on ITEX.

Not all ITEX transactions are as dramatic as the one that rescued Tasha. Usually, the things people buy are pretty mundane: accounting services, a motel room, dinner out.

When Voigt, who publishes a travel magazine, needs a computer monitor or some brochures printed, she'll turn to a member of the exchange. It's a way to conserve cash.

Members rack up trade credit by selling their products and services to others in the group. In Fogle's case, he earned $1,600 in fictitious trade dollars from Voigt's account that he can use to buy something else from another member of the network.

Bartering exchanges have been around for a long time, but activity has grown recently as the economy has waned, said Tom McDowell, who started a barter exchange more than 25 years ago and is executive director of the 53-member National Association of Trade Exchanges.

McDowell, a former auctioneer, sold his business, ATX The Barter Co., to ITEX in January. The Seattle-based ITEX, once listed on Nasdaq, is the largest barter network in the country with 24,000 members. Last year, it bought Intagio, which operated in several cities.

Bartering ebbs and flows, said Anthony Forniti, who runs the ITEX office in Solon, Ohio. "The economy does influence it a little bit," he said. When the economy weakens, businesses are forced to get a little more creative.

It's more than just conserving cash, though. The biggest benefit is being linked to a host of potential customers who otherwise might never have been found, said Steve White, ITEX's founder and chief executive. It also encourages members to buy local.

"I've never been in a Wal-Mart," White said. "I'm going to buy from a local merchant before I buy from a Wal-Mart."

It also is a way to unload inventory that might not be selling. A hotel, for instance, might be able to get something in return for rooms that otherwise would sit vacant for a night. And in these days of tight credit, a small business might find it easier to get a break from the trading community than it will from the bank, White said.

While barter connotes images of cavemen handing over wheels in exchange for clubs, today's version of the practice is quite sophisticated, having come a long way in recent decades. When McDowell started ATX, he recorded transactions by hand, using file cards. Now records are kept on a computer, and special software allows for online trading.

The barter companies make money by charging a fee for each transaction. It's 6 percent at ITEX if the trade is made online, 7.5 percent if it is not. ITEX charges a $20 monthly subscription fee as well.

Barter exchanges aren't for everybody. Most use the exchange only a couple of times a month. Then there are serial traders such as Ray Antonelli, owner of Focused Resources in Highland Heights, Ohio. He performs warranty repairs on BIC Venturi brand loudspeakers. He also trades the home theater speakers on ITEX and BarterWorks.

Antonelli has used his barter dollars for a variety of supplies. He's purchased a forklift and pallet racking for his warehouse, central heating and air conditioning for his house -- even car repairs.

"I can't remember the last time I paid cash for a printing job," he said.

But as easy as it is for Antonelli to find what he needs, others, such as veterinarian Fogle, have a harder time spending their trade dollars. He joined the Intagio network five years ago at the suggestion of a client who painted Fogle's waiting room in exchange for treating his golden retriever.

Since then, Fogle has traded for a few items, such as plumbing services and a condo in Las Vegas where he attended a conference. But mostly he's just been collecting trade credit, about $30,000 worth.

"One of these days, I'm going to take a really, really awesome vacation with all this," he said.

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Peter Krouse is a reporter for The Plain Dealer of Cleveland. He can be contacted at pkrouse@plaind.com.

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