Barter Fits the Bill for Strapped Firms (Wall Street Journal, February 17, 2009) Small businesses, squeezed for cash and unable to get loans, are turning to an ancient payment system: barter...
Although companies do bartering one on one, many deals are conducted via membership networks in barter companies, where technology and tracking software have modernized the centuries-old system.
Typically, a small business sets up an account at a barter company, similar to a checking account at a bank, for a one-time fee. "Trade dollars" earned for services rendered are deposited into the account and can be spent on any product or service in the network. Companies regularly find others willing to barter via the barter site's online directory of services, email newsletters, referrals or by contacting a firm's account manager.
On top of the setup fee, both parties pay the barter company a transaction fee of about 5% to 6% on each deal.
In 2008, about 250,000 North American companies conducted barter transactions worth more than $16 billion, according to the International Reciprocal Trade Association, a nonprofit based in Portsmouth, Va., that regulates and provides standards for modern trade and barter-service companies. The amount for small businesses climbed to an estimated $11 billion last year from $10 billion in 2007. David Wallach, the association's president, says if the trend continues he expects a 15% gain this year to about $12.7 billion... (Click
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