Many small-business owners are unfamiliar with barter. One could be imagining a kind of marketplace where everyone is holding onto what they have to sell, and walking around trying to find someone who has what they want, and who wants what they have. Picturing it like that makes the whole endeavour sound rather futile and not worth the effort.
But in actual fact, barter is not at all like that, and if you are at all familiar with loyalty reward points, coupons, vouchers or a digital wallet on your phone, you will soon see that barter is in fact been out in front of the cash economy for decades.
What’s the cash economy? It’s the one where the revenue from a business pays the salaries of its employees and owners, who can then go shopping and trading, paying people who then come back to their business, which pays their employees and owners, and so on. Where Dollars, Euro, Yen and a long list of other national currencies created out of thin air by Central Banks circulate around the neighbourhood, then drain out to the city, then drain out of the country in a never-ending cycle for some, or spiral for others.
The goal is to keep money coming in so that the amount that drains out to other economies is kept in check. It’s like a barrel with a bunch of holes in it. Money has to pour in from some source, while it drains out of the holes at around the bottom.
Barter is different. It’s like a handful of plugs to fill in the holes that the money was draining out from, so that not as much money needs to come in, and what is in the barrel circulates around much more generously. These plugs are the currency of the barter network. In some 90% of countries around the world, the units of exchange in a barter network are as legal and taxable as legal-tender money.
So it’s not correct to say that cash is better than barter, or that barter is better than cash when you go shopping with it. It’s the same thing...but what barter is better than cash for is for buying and selling between businesses.
This is because the unit of account of a barter network represents the wholesale price of the goods and services that each business offers, rather than the retail price. In a barter network, you effectively pay the wholesale price for what you bought, and not the retail price. This makes it much more advantageous to pay using barter units than cash, than selling what you bought for cash to retail consumers at retail prices.
So how can businesses, particularly small businesses, make use of the advantages of barter units over cash to benefit their business? Let’s start with a few general ideas, then go into some real-world examples.
A business can use its excess inventory to stretch its advertising budget. What may be excess stock or slow times for your business may be in demand by another business, or by an advertising business that often has empty advertising space, or empty billboards. They will take your excess inventory, unsold goods or vouchers for your empty rooms or dining tables and give you advertising in return stretching your advertising budget beyond what you thought was possible.
A hotel can use its empty rooms and unbooked meeting rooms to increase revenue. Doing business requires travel and meetings. By taking payment in barter units rather than cash, the hotel can spend them on the many other things they need to buy, just like cash.
A hotel can use its empty rooms and unbooked meeting rooms to increase revenue. Doing business requires travel and meetings. By taking payment in barter units rather than cash, the hotel can spend them on the many other things they need to buy, just like cash.
A sports team can trade their sponsorship packages to gain business support. Then they can spend them with other businesses to get what they need. Things like printing, advertising, legal services, travel.
From Education and Training, to Arts & Entertainment, Sports and Community Organizations, Business Networks, Home Services, Health & Beauty, Manufacturing, Media, Property and many other types of businesses, using barter instead of cash can be of significant advantage.
On Bartercard Australia, you’ll see hundreds of testimonials from real live business owners telling their stories of how barter has been of benefit to them. Visit their website now at: https://bartercard.com.au/reviews/