Having been in and around the barter industry since 2000, I’ve seen a dozen or so trade exchanges, locally, come and go. Some have been great, some have been ok, some have been terrible. The one common thread in them all has been one fact that the barter industry can not afford to ignore: your experience, good or bad, is completely dictated by the ability of your broker. The barter industry is built on brokers. Without brokers, nothing happens. There was a great big experiment in this realm years ago. American Express backed a company called All Business Barter. If you do a Google search for “All Business Barter” you can get the pieces that I put together here, but what happened is American Express saw what the barter world was doing and wanted a piece. They thought that with proper funding, excellent technology, and product to inject in to the system, they could replicate what ITEX and BXI were doing at the time without having to pay a proper and large percentage of revenue to brokers. I heard about this site, and signed up…it was free to join, no monthly fees, no broker, you just pay a transaction fee based on what trades you do. I never did any trades. I was offering my services as a web designer back then. I never found anyone that wanted what I had. Within months, the site, the membership list, the whole thing, had been sold. It was sold a number of times: Big Vine, Intagio, then finally it ended up as part of ITEX. Why did it fail?
Brokers are the lifeblood of the barter industry.
The truth is this: business owners are less concerned about barter than everything else they are dealing with. I try to get my clients to understand that the success of a barter exchange depends entirely in the broker’s ability to get motivated and stay more motivated than their members. Business owners are busy. Business owners, especially right now, are very concerned about the bottom line of their Profit and Loss Statements, not about what trade transactions are available to them.
All Business Barter failed for a reason: no brokers
Once they understand how it works, the first question most people ask is, ‘what can I buy?’ Debbie Lombardi of Bristol, Conn.-based Barter Business Unlimited (BBU), says the answer really depends on what you want, and your timeframe.“Ultimately,” she continued, “it comes down to your network and the expertise of your trade broker.”
Like a good travel agent, trade brokers play a constant game of matchmaker. They help members promote what they have to sell and help them spend their trade dollars by locating items on clients’ wish lists.The range of what can be bought is quite impressive.
Jeffrey Cohen of ImageWorksLLC, a Web and e-commerce design company in Vernon, Conn. uses his trade-dollar currency for clients, networking, and keeping his employees happy. “I do seven business meals a week between clients and other business associates. We’ve had company events catered as well.”
On the entertainment side, vacations, hotel rooms, banquets, catering, music, and sporting events are always popular.
Van Houten of Advanced Air Quality, a commercial air duct and kitchen exhaust cleaning firm in Springfield, offered how he used barter exchange to curb costs. “One special celebration back in October would have cost $7,000 if I had to pay cash, but I just used trade dollars instead.”
In my ten years, I have seen over and over that the health of an exchange is dependent on the broker. If you have a good broker, you’ll have a great time with a trade exchange. If you have a bad broker, you’ll get frustated, you’ll get mad, and then you’ll get nothing.
I used to compete with two ITEX franchises locally, one of them with an outstanding reputation and one of them with a shaky reputation. People asked me, quite frequently, what I thought of my competition. I tried to not say much about the ITEX office with a bad reputation, but I praised the work of the ITEX office that had a great reputation.
Again, the truth is that your broker will make or break your experience with a barter exchange. The parent company doesn’t matter as much, the software they use doesn’t matter much, what does matter is your broker.