Elsewhere in the world, bartering is as commonplace as accepting credit cards, and an integral element to almost every business model. Here in the US, predominantly due to the fact we have been the strongest and most affluent global economy for so long, barter was never a necessity. Until now, that is. With the current collapse of the monetary infrastructure here in America and around the world, increasing numbers of people are flocking to the age-old system of bartering. At the turn of the new millennium, countries like Argentina, who were on the brink of bankruptcy, were forced to revert back to bartering in order to ‘reboot’ their cash economy. Employers were forced to pay their workers with products instead of money, which they then took to large, communal warehouses and bartered their wares with other workers. Hopefully this will not be the plight of the US, and this article aims to highlight some solutions that are already in place and are laying the foundations for a working alternative economy.
Bartering in its simplest definition is the exchange of goods and services for other goods and services without the need for cash. It makes sound economic sense, because a business owner can trade out things at their wholesale (their cost of goods) for things they would have to pay the full cash price for otherwise. If you are a restaurant owner, why wouldn’t you trade $100 worth of gift certificates with the company that does your pest control each month? Or if you own a repair garage, if you can get uniforms for your mechanics and trade out oil changes and services, you’d be daft not to. The benefits are not just improved cash flow and better efficiencies, it’s also a great way to get new customers. Many people are told during their occupational schooling - especially Chiropractors and massage therapists - to barter for many of their start-up needs to conserve their seed capital, because their cost of goods is so much lower than the retail cash price.
But how do you find other business owners to barter with you, or what if you want their stuff and they don’t want yours? Even though bartering makes perfect sense to any business, the simple fact is that most owners don’t have the time or resources to call twenty or more companies to find a partner to trade with, and when profits are up, it’s faster and more convenient just to pay cash. Barter for the most part just happens by accident; two owners meet, they start talking, and decide to swap – much like you might have traded baseball cards in the school yard as a kid. Organized barter companies arose in the mid-50s to address just this problem.
In the early days, the technology to work a little barter company was simple: a phone and a rolodex. As time passed and technology improved, slightly more advanced barter organizations emerged, but merely adapted a similar system of a printed member list and put the bulk of the trading upon the members. By default of this system being cumbersome, organized barter never seemed to get past second base, especially with the advent of payment by charge and credit cards. In America today there are over 1,000 barter companies of varying sizes, from small local collectives of less than 50 members, to national corporations like ITEX and Merchants Barter Exchange (MBE). Non-profit organziations like IRTA (International Reciprocal Trade Association) and NATE (National Association of Trade Exchanges) have attempted to consolidate and uniform bartering via small exchanges, but due to the fact that each barter company does things in slightly different ways with different fees, and most accepting cash as part of the payment it is not a perfect system to manage.
To date, the only national barter company to totally reinvent organized barter is Merchants Barter Exchange. Because they do things so differently to all the other exchanges out there, they do not belong to either IRTA or NATE, as MBE does not allow its members to inflate prices, nor do they allow any part of the exchange to be paid in cash, which makes them the only ‘true’ barter company in the US today. In fact, MBE has made bartering similar to spending cash within a private bank or economy, which accounts for their incredible growth since their inception in 2000.
The downward economy and the improvements in technology have given rise to many ‘me-too’ barter firms that are solely internet-based looking to cash in on this lucrative industry. A quick Google search will bring up a torrent of ‘new age’ online barter clubs. On closer examination, be wary of the jumble in the internet jungle. Start-up costs for an online ‘portal’ – as most of the online-only barter clubs are – are much lower than a bricks-and-mortar barter company and the majority are merely a swap-exchange. A serious business owner needs to look towards a business-focused barter company that has new, rather than used, goods, and services that are suitable to his business.
Other important factors to consider when scouting a good barter company are the membership fees. If a barter exchange does not charge fees, chances are they are not worth joining. Any business service that has benefits to membership should feel totally justified charging a sign-up fee and fees for using the system. Usually it is the brand new start-up exchanges that have to waive initiation fees because they have no members, or the older barter companies that cannot iron out the flaws of inflated pricing and cash-barter blends.
Obviously, back in the 50s when organized bartering began, Uncle Sam wasn’t too concerned with barter, but obviously where there is money to be made, the IRS eventually get interested and wants its share. So too with the barter industry. Back in 1982, Congress passed the barter tax compliance provisions in the Tax Equity and Fiscal Responsibility Act. This landmark legislation acknowledged and equated barter exchanges with banks and credit card companies as “third party record keepers” of the financial records of other taxpayers. The IRS considers all forms of barter – whether direct or via a barter exchange – just the same as cash transactions, and all barter companies have to issue 1099b forms at the end of each tax year to members for accounting purposes.
Like any business decision, choosing the right barter company for you should be made carefully. Most good barter exchanges have active outside sales representatives that are qualified to answer most questions a business owner has. Consider the fees to join, the availability of goods and services, most importantly today, with increased competition and shrinking market share, make sure the exchange does not list you on an open directory so that your existing cash business is protected (there is nothing worse than having your top five cash-paying clients join the same barter group as you because they saw you on the list and then you lose that cash income!) There are pros and cons to privately owned and publicly traded companies too, obviously a privately owned exchange is not effected by the stock market fluctuations and less likely to go under.
Again, these are very tough and challenging times for all of us, business owners and employees alike. Barter as an economic vehicle has most certainly stood the test of time and will be around for many more millennia. Done right, barter can be an incredible boost to any business.
Shawn Cressman owns the Lehigh Valley, PA, license for MBE
There are many costs involved with starting any business, whether it's a franchise or an independent venture. Chiropractors, massage therapists, and many other service industries are actually taught to leverage the power of bartering during their start-up phase, but why should they be the only ones to benefit?
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Beyond the major expenses of premises and equipment, a start-up business that has an abundance of enthusiasm, but a shortage of new clients, and is often undercapitalized, is smart to barter. Why, for example, spend cash from your start-up budget on your signage, business cards, construction work to fit out your building, and the like, if you can barter for it instead?
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The challenge for most start-up entrepreneurs however is finding other business owners to barter directly with. This is where companies like Merchants Barter Exchange come to the fore. As one of the few (if not the only) barter companies that insists on "100% trade, 100% of the time", same pricing as cash, there is absolutely no difference to using the MBE-barter system to trade for useful business needs. Why borrow money from a traditional bank - that is if you actually can these days - when MBE can advance a barter line of credit, which is similar to writing an I.O.U., with no interest and actually helps you build your client base.
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All MBE members have a barter bank account, similar to their cash business account, from which they spend their MBE-dollars with other members for the goods and services they need to run their business. Since bartering is such a smart business tool - and even more so in these tough economic times - it would make sense for master franchisees and franchise companies to either partner with Merchants Barter Exchange, or at the very least advocate using their services.
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Imagine owning a Quiznos, TruGreen, Molly Maids, or similar franchise, and cutting your start-up expense by $10,000 or more, and have MBE send you the new customers you need to continue to run, grow and expand your business?
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The bottom line: barter has always made sense. Beware of some of the older barter companies that don't accept full payment in barter (often hard goods have to be paid in cash), and often allow members to increase their prices, because you'll lose any economic advantage. Additionally, just because a barter company belongs to a barter 'organization', it doesn't mean they are better than any other, in fact the only regulatory body for barter is the IRS. On a taxation note, barter revenue is considered exactly the same as cash as far as Uncle Sam is concerned.
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MORE INFO: to see if you are right for MBE check out their marketing website: http://barterfranchise.com
As the American economy teeters on the brink of the biggest financial meltdown in history, and the proposed $700bn bail-out plan looks set to go down as well as David Blaine's stunt, there is still a small glimmer of hope.
Our ancestors created some incredibly simple things that are essential to our survival: the wheel (which became cogs, spindles, etc.), the aquaduct (which became pipes and plumbing), and barter (which later became economies.) Take away the teeth from a cog and it's still just a wheel. Take the covering off a pipe and it's still a simple aquaduct. Take the insanity out of our modern economy and you have the bedrock, the solid foundation of bartering.
Back in 2000, Merchants Barter Exchange (MBE) revolutionized how barter was traditionally implemented, taking it out of the Stone Age and into the 21st Century. The "Caveman Bank", as it is affectionately known, was created for just such a time as we are currently experiencing. Ridiculed and laughed at for being behind the times, they diligently stuck to their core beliefs and ethics of "100% trade, 100% of the time", same pricing as cash, and no cash-barter blends.
Nobody's laughing now.
Founder and President, Steve Bolles, had the foresight back when everybody else was being duped by the Y2K scare to go back to the drawing board and reinvent barter into the highly effective business tool that is now the MBE trading system. "Everybody told me I was crazy," states Bolles. "They told me it was impossible to trade anything bigger than pizzas for haircuts."
Today, nobody thinks Bolles is crazy. In fact, he is now being lauded as a visionary, possibly the man that can offer the only real solution to the long term survival of our liberties and free way of life. "We simply put secure systems in place to create fair trading at fair prices."
MBE-barter benefits everybody. Business members gain from moving their surplus (time, inventory, or capacity) in exchange for needed hard goods and services they would have paid cash for. They also get the most valuable commodity of all: new clients and word-of-mouth advertising. The consumer benefits also by better service, happier staff, and a more efficient business. And Uncle Sam is happy too, as MBE keeps everything above-board by send out 1099B forms to all members.
Obviously MBE is growing and benefitting as a result of the current economic climate, but as Bolles says, "We can't grow nearly fast enough to help all the people we'd like to." MBE is currently looking for sales professionals and managers, entrepreneurs that wish to own and operate their own local MBE-economies, and news and media professionals seeking more information.
For more information about MBE or bartering in general, contact: BarterBrit@yahoo.com
As the American economy teeters on the brink of the biggest financial meltdown in history, and the proposed $700bn bail-out plan looks set to go down as well as David Blaine's stunt, there is still a small glimmer of hope.
Our ancestors created some incredibly simple things that are essential to our survival: the wheel (which became cogs, spindles, etc.), the aquaduct (which became pipes and plumbing), and barter (which later became economies.) Take away the teeth from a cog and it's still just a wheel. Take the covering off a pipe and it's still a simple aquaduct. Take the insanity out of our modern economy and you have the bedrock, the solid foundation of bartering.
Back in 2000, Merchants Barter Exchange (MBE) revolutionized how barter was traditionally implemented, taking it out of the Stone Age and into the 21st Century. The "Caveman Bank", as it is affectionately known, was created for just such a time as we are currently experiencing. Ridiculed and laughed at for being behind the times, they diligently stuck to their core beliefs and ethics of "100% trade, 100% of the time", same pricing as cash, and no cash-barter blends.
Nobody's laughing now.
Founder and President, Steve Bolles, had the foresight back when everybody else was being duped by the Y2K scare to go back to the drawing board and reinvent barter into the highly effective business tool that is now the MBE trading system. "Everybody told me I was crazy," states Bolles. "They told me it was impossible to trade anything bigger than pizzas for haircuts."
Today, nobody thinks Bolles is crazy. In fact, he is now being lauded as a visionary, possibly the man that can offer the only real solution to the long term survival of our liberties and free way of life. "We simply put secure systems in place to create fair trading at fair prices."
MBE-barter benefits everybody. Business members gain from moving their surplus (time, inventory, or capacity) in exchange for needed hard goods and services they would have paid cash for. They also get the most valuable commodity of all: new clients and word-of-mouth advertising. The consumer benefits also by better service, happier staff, and a more efficient business. And Uncle Sam is happy too, as MBE keeps everything above-board by send out 1099B forms to all members.
Obviously MBE is growing and benefitting as a result of the current economic climate, but as Bolles says, "We can't grow nearly fast enough to help all the people we'd like to." MBE is currently looking for sales professionals and managers, entrepreneurs that wish to own and operate their own local MBE-economies, and news and media professionals seeking more information.
For more information about MBE or bartering in general, contact: BarterBrit@yahoo.com
Finally, as the theatrical smokescreen of the Presidential race is clearing, folks are starting to talk about the real issue at hand: the economy.
We've been in a recession for a while now and, like a bad repair job, people have optimistically tried to patch it up. When David Walker, the comptroller for the US (the chief bean-counter, if you like), walked out after 10 years earlier in 2008, the 'you-know-what' should have hit the fan, but it didn't.
Just like the classic movie, "The Wizard of Oz", the media machine deluged us with distractions, "Ignore the man behind the curtain..."
I understand economies go up and down, but the writing has been clearly spray-painted on the wall in luminous paint for years. The recession, or the possible depression as many predict, doesn't depress me, it's the fact that people in power knew about it and do not appear to have done one positive thing to solve the problem. This is not a time to take a headache pill to simply dull the pain. If a meteor was headed for Los Angeles, would you really care who got in the White House?
Whoever gets in, they are going to have one heck of a crater to fill. But I'm not depressed, not in the slightest. I'm actually very happy and feel very fortunate. For once, I'm part of the solution. Thanks to the work of Steve Bolles and my active part in his company, Merchants Barter Exchange (MBE), we offer an economic liferaft to certain business owners. Just like Noah's Ark, we can't save everybody, but we can help those smart enough to hop aboard.
MBE is a company that's time has come, and is experiencing accellerated growth because they are a barter company that works. Savvy entrepreneurs are also hopping aboard through the MBE Licensing Plan, helping to safeguard their local business economies.
Barter may not be able to solve all the problems facing us today, but as the oldest and most proven form of commerce, just like the Ark, it may help us ride out this recession.
Life can be very stressful, especially if we become part of that stress. Here's an exercise that I have found useful.
Punctuate your day. Imagine reading a book without any punctuation. It would most likely be rather stressful and probably would not make much sense. How many of us go from awakening to sleeping without fully punctuating our day?
Let me give you an example. The alarm goes off you rush to the bathroom and brush your teeth hair wash your face thinking about what you need to be doing that day the weather the traffic you are late do you have time for breakfast is the boss going to be in a good mood will you work your lunch hour again what day is it where are your vitamins did you take them already where are your car keys did you charge your phone... Phew! Do you see? I feel tired just writing that.
So, what can we do?
It's a new habit we have to learn and put into practice. Firstly, when your alarm goes off, or when you wake up, take a moment to fully wake up. Try to remember what you were thinking or dreaming, and then just let it go. Take three, deep breaths, in through your nose, out through your mouth. Now you're awake enough to move on to the next activity. If you usually put on the coffee, do so consciously. Smell the coffee. Listen to the water as it splashes into the jug. Try not to have too many, if any, distractions like the morning news on TV. Now brush your teeth consciously, taste the toothpaste. If other thoughts and distractions come into your mind, let them go, focus only on what you are doing. Three more deep breaths.
It seems like a lot of structure and effort, but with regular practice you will be doing it naturally and easily. You will also feel less stress.
Now it's time to drive to work. Again, pause. Sit in your car and before you start the engine, take three deep breaths. Put a period behind what you've just done. Let it go. Then start your car and consciously drive to work. Focus on driving. If there's a lot of traffic or delays, don't get sucked into the stress. You may be late, so what? You can't make the traffic disappear. It is what it is, enjoy the moment. Stressing about future events that probably won't happen will only stress you out! Relax, remember the three deep breaths. Again, when you arrive, stay calm. Switch off the engine and actually listen to the motor shutting down. As you breath deeply three times, leave the drive behind you: forget the person that cut you off, or the road works. That is in the past. Full stop.
By not dragging past events around with you, you will be better able to give your full attention to 'right now'. By focussing on this moment, it will stop you drifting off into events that probably won't happen in the future. Think about it, we only regret things in the past, and we only fear things in the future. Do you ever (or can you even) regret or fear something right now in this moment?
The more you punctuation your day like this, the less stressful it will be. Initially it will feel strange. Some people may think your behaviour a little odd. One thing is for certain, they'll definately notice you are calmer, happier, and a lot less stressed.
Now, take three deep breaths once you have finished reading this article and get ready to embrace a happy, less stressful life.
I'm new to Fast Company and fairly new to blogging, so I thought I'd begin with a short blog-burst to give a flavour of what I intend to write.
My current business and most recent background is barter, the oldest and most effective form of commerce ever invented (especially the way Merchants Barter Exchange has streamlined it), however there is only so much one can write and still make interesting and entertaining about barter. For this reason much of my blog content will NOT be about barter and my company.
I shall endeavour to share my experiences past and present about the differences of European and American business, motivational tips, time saving tips, and general business and life snippets.
Hopefully you will enjoy my fluid style and solid content.
I'll attempt to post as regularly as I am able (I have a pretty rigorous timetable!)
