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Barter Basics

What is a barter exchange?


A barter exchange is a trade company that acts as a clearinghouse and third party record keeper of trade transactions among its clients, which are businesses that contract with BBE to organize and facilitate barter of their goods and/or services with other business owners.
 

What is the Barter Business Exchange?


The Barter Business Exchange, Inc. is a network of business owners who want to help each other prosper by trading products and services within their communities to increase commerce and reduce cash expenditures.
 

What is a barter dollar?


A barter dollar is an accounting unit used to record the value of trades. One barter dollar is equal to one dollar in U.S. currency. Ownership of barter dollars denotes the right to receive goods and services available within the trade network. Barter dollars may be used only in the manner and for the purpose set forth in the BBE Trading Policies and Procedures. Barter dollars will not be considered legal tender, securities, or commodities. Barter dollars may not be redeemed for cash. BBE disclaims responsibility for the negotiability of barter dollars.
 

What is a barter broker?


A barter broker is a BBE employee whose function it is to assist clients in the sale and purchases of goods and services on barter.
 

What is a client?


A client is a business that has contracted with BBE to exchange its goods and/or services with other clients and wishes to subscribe to BBE's record keeping and barter services.
 

What is a client in good standing?


A client who conducts trades in accordance with the BBE Trading Policies and Procedures, is current in any monies owed to BBE, and has a valid barter card, is considered a client in good standing. Only clients in good standing are entitled to the services of BBE. When a client has by his or her conduct or misconduct displayed to BBE the inability to meet the standards set in client's own industry relative to the quality of goods or services, or has been charged with the commission of a crime involving fraud or moral turpitude, or otherwise exhibits to BBE that the client's reputation in the business community has been diminished, then for the protection of the remaining clients, BBE reserves the right to restrict the use of client's barter dollars to purchases only and shall restrict the rights of said client to sell or advertise client's goods or services for sale until such time as client can exhibit to BBE that the standards expected in client's own industry can be met. Expired debit cards shall remove a client from being a client in good standing.
 

What are the benefits of bartering?


Bartering is an excellent way to expand your business and save your precious cash reserves. Reasons smart business owners barter:

INCREASE MARKET SHARE When you accept new barter business, you increase your sales and you take sales away from your competitors.

REDUCE OVERHEAD COSTS Use incremental barter sales to offset daily operating expenses and reduce overhead costs such as janitorial service, printing, vehicle maintenance, signage, etc.

COLLECT SLOW RECEIVABLES When a buyer has consistently caused a collection problem for you or is limited to purchases due to their credit standing, offer barter dollars as a method of payment; there are no receivables in barter transactions.

PENETRATE LOST ACCOUNTS By accepting other goods as payment and filtering them through the barter exchange, you can penetrate elusive accounts with a very attractive method of payment to them,

GENERATE REFERRALS More barter business typically means more people talking about your company and referring new potential cash customers to your door you otherwise wouldn’t find.

REDUCE THE COST OF BORROWING Rather than paying cash interest on working capital or capital expenditure loans, use your barter credit line against future sales.

ENHANCE EMPLOYEE BENEFITS Secure employee loyalty and productivity by bartering for your employee’s dental services, medical services, vehicle repairs, and incentive items.

CONVERT EXCESS INVENTORY Don’t have inventories idle. List slow moving goods with BBE and earn barter dollars that can be used for today’s operating expenses.

UTILIZE EXCESS CAPACITY As fixed costs remain the same during slow times, utilize the capacity on hand to produce products or provide services for something available on barter ... it’s better than nothing.

CONSERVE CASH You can conserve cash by using inventories and excess capacity to purchase operating expenses that are normally paid on a cash basis.

EXPAND YOUR ADVERTISING AND MARKETING EFFORTS Using barter for your advertising will bring in new cash customers and you will be more visible as your competitors spend their cash working capital.


How can I tell if bartering is good for my business?

 

Most companies find barter to be very profitable. Evaluating your particular situation is very important. If your business is not yet operating at full capacity, or if you plan to expand in the near future, please take about 5 minutes to assess your needs by completing the "Tell us what you want to buy on barter" form in the Join Now section.  If your business is too busy or if you do not see products and services that you need on the needs and wants list, you probably do not need our services. Remember, every new customer you service after you have met your fixed office expenses (payroll, rent, utilities, etc.) is very profitable. Providing your products and services for even a few new customers after basic expenses are met can make a big difference to your bottom line.
 

How do I choose a barter exchange?


Read our "How to Choose a Barter Exchange" section to learn everything you need to know about choosing a barter exchange.