Bartering has long since been a highly effective means to trade out goods and services for other products and services one needs, and although cash has made commerce much easier, when cash is tight, smart business owners revert back to the age-old method of bartering. Merchants Barter Exchange (MBE), as the only national company that insists on 100%-barter at the same cash price, is helping many restaurants around the US save thousands of dollars during these tough economic times. Below are some examples of how an average-sized restaurant can shave many hundreds of dollars each month from their bottom line expenses.

The benefits of using MBE-barter for a restaurant are obvious, since they carry their standard overhead (rent, utilities, salaries, phone, etc.) anyway, no matter how many customers they have, the only variable to revenue and expense is the number of customers that eat at the establishment. For MBE to bring just one extra table of guests per night that spends $50 (tipping the wait staff in cash), what does it actually cost the restaurant owner? Their only additional cash outlay is the cost of the food and drinks consumed (which is usually less than 25%) and, realistically, since they are not buying that food especially for those customers, it probably isn’t even noticeable on the P&L.

What if, instead of paying cash for their monthly pest control service, they used MBE-barter? If they traditionally paid $100 for the service, they could now get the very same quality service via MBE for $100 barter dollars (costing them only 25 cents on the dollar – their food cost – plus a 10% purchasing fee – another $10.) In this scenario they have saved a total of $65 in cash on one service that month.

Now let’s imagine they need their carpets dry cleaned, and the cost is usually $300. By bartering the service out, they would save $195. Most restaurants need landscaping, let’s add that to our scenario, say previously a $250 outlay. Now they save another $162.50. Perhaps they need to do some advertising and would usually spend $2000, now they have saved $1300. As you can see, it is easy to make quite considerable savings each and every month by joining and utilizing the easy barter payment system of Merchants Barter Exchange. Just on these five items alone, this particular restaurant has saved a total of $1722.50 in cash in one month.

On top of the cash savings, which are important, let’s not forget the other major benefit: more customers. Since MBE ensures that they only bring new business to their members, this example could have introduced upwards of 5 – 10 new customers to that restaurant. Just imagine what additional cash customers that can create via word-of-mouth advertising. All in all, bartering is a very effective method for any restaurant of any size to make significant savings across the board. The best thing of all, MBE takes care of all the paperwork and tax reporting needed for the end of year.

For instance your typical month-to-month fixed expenses that could be covered on trade would include: office rent, paging and answering service, janitorial service, accounting/bookkeeping, equipment purchase and rental, maintenance contracts (building and office equipment), landscape maintenance, security system, coffee service, bottled water, payroll services, secretarial service, pest control, message-on-hold service, to name a few.

Periodic expenses that can be obtained on trade include: travel expenses (accommodations, meals), staff incentives/bonuses (vacations, restaurant scrip, entertainment, event tickets), printing, graphics, advertising and promotion, computer programming and repairs, financial planning, medical reimbursement plans, carpet cleaning, building repairs (roofing, painting), parking lot repairs, customer gifts, auto repairs, banners, signs, flags, and products for your personal needs.

Every time you acquire any of these goods or services without spending cash, you increase your cash flow…a critical factor in business. Using barter instead of cash makes it easier to operate…and removes a lot of the day-to-day pressure.

Ask anyone who’s operating a successful company and they’ll tell you there are only two critical factors to running a business. First, you must price your product so you make a profit. But sales and receivables aren’t enough. Secondly, you must continually generate a lot of “on-going” cash (keep the cash flowing), so you can pay your bills and other obligations in a timely manner.

They do so through formal organizations known as barter networks or trade exchanges. (A trade exchange acts as a clearinghouse to match buyers and sellers, and also as a bank to track each transaction.)

The federal government gave trade exchanges the “stamp-of-approval” through the Tax Equity and Fiscal Responsibility Act of 1982, which recognized them as third-party record keepers of financial information, the same as banks and stockbrokers.

Why are so many companies happy, even eager, to trade? Because they have a surplus of goods and services, and a shortage of cash—just like you. Plus they need what you have! For many, it’s the only way they can easily generate substantial additional business.

Through our nation’s trade exchanges it’s possible to gain exposure to tens of thousands of potential clients. And many times, you’ll find the by-product of all this new barter business (because everyone you deal with has friends and business associates) is cash referral business…a great side benefit!

Huge future sales are waiting for you. Possible, because as a member of a trade exchange you get free advertising in monthly statement stuffers (your company’s fliers are sent to every member). Plus we also offer a free, weekly e-mail and broadcast fax-service as well. These e-mails and faxes always announce the latest cruises and other travel accommodations available to exchange members, in addition to other listings.

The bottom line, when you are a member of a trade exchange, is that you can purchase almost anything you want without paying cash. You pay for your purchases with the promise to provide your products or services at full retail value. These new sales are the proven way to build your customer base, and solidly expand your operation in these times of tumultuous economic change.

Just take a look at what some companies are doing:

Syrup For Advertising
Barq’s, a Louisiana manufacturer of root beer, had a great product, but little recognition outside of their regional market. That was before they doubled their ad budget, and increased sales, by trading root beer for advertising. Their efforts were so successful that Coca-Cola recently bought them out.

Empty Rooms For Exposure & Name Recognition
Howard Johnson Franchise Systems traded 120,000 room nights, or 5% of their capacity, in return for advertising. Since their average hotel has a 65-67% occupancy, they always had some vacant rooms… and their only trading cost was “changing the sheets.” Such barter financing of advertising is an inexpensive way to build name recognition, because of the hotelier’s low marginal cost structure.

Cooperative Barter Effort Brings P.R. Coup
Brazil’s Tourism Board concluded a $40 million deal with an American corporate barter company for a public relations and advertising effort in the U.S. to encourage tourism in Brazil. Rio de Janiero’s hotel-keepers’ association participated in the transaction, as the bulk of their trade would be bartered hotel rooms.

Trading Space (Empty Seats) For 9,000 New Uniforms
Australian-based Qantas airlines recently adopted a major barter acquisition program and promptly traded airline tickets (empty seats) for 9,000 new uniforms.

Unsold Time For Equity In Emerging Growth Companies
Recently, ABC-TV formed a new unit with the express purpose of bartering its unsold time to new, young, emerging, growth companies in exchange for 5% to 20% equity stakes (stock ownership as payment for their TV time). ABC, knowing that the second-hand on the clock never stops, has adopted the profit-making mantra, “We must trade our unsold time or lose it, forever.”

As we’ve seen during down economies in the past, growth in usage of the “barter” section of craigslist is accelerating, up more than 100% in the last year alone:

Bartering has long since been a highly effective means to trade out goods and services for other needed products and services, and although cash has made commerce much easier, when money is tight, smart business owners revert back to the age-old method of bartering. Throughout history there are many stories of doctors trading with other local merchants for things they need. Merchants Barter Exchange (MBE), as the only national company that insists on 100%-barter at the same cash price, is helping many medical establishments around the US save thousands of dollars during these tough economic times. Below are some examples of how a doctor’s practice can shave many hundreds of dollars each month from their bottom line expenses.

Often people overlook the hundreds of thousands of dollars a doctor has invested in their education, their equipment, and their offices before they even start to reap the rewards of all their hard work. A doctor’s office starts in the red and has to build into a profitable establishment over many years. The benefits of using MBE-barter for doctors are obvious, since they carry their standard overhead (rent, utilities, salaries, phone, etc., on top of their education bill!) anyway, no matter how many patients they have, the only variable to revenue and expense is the number of patients that they can see. For MBE to bring just one new patient that spends $2500 on medical fees a year, what does it actually cost the doctor? Their only additional cash outlay is the cost of the treatment (which, if it’s just an examination, is practically zero, and certainly less than 10%.) If there are additional cash expenses for procedures, in order to cover the large overhead, it is definitely less than 50% of the fees, and probably isn’t noticeable on the P&L.

On the other hand, if a doctor has three hours of empty appointments, how much revenue are they losing? In addition to that, unlike accepting health insurance, there are no delays or discounts in payment for services. What if, instead of paying cash for office cleaning, they used MBE-barter? If they traditionally paid $100 for the service, they could now get the very same quality service via MBE for $100 barter dollars (costing them only 10 – 50 cents on the dollar – their core cost – plus a 10% purchasing fee – another $10.) In this scenario they have saved a total of $80 – $40 in cash on one service that month.

Now let’s imagine they need their lab coats dry cleaned, and the cost is usually $200 per month. By bartering the service out, they would save $160 – $80. Perhaps they need new carpet, let’s add that to our scenario, say previously a $2500 cash outlay. Now they save another $1000 – $2000. Perhaps they need to do some advertising and would usually spend $4000, now they have saved $1600 – $3200. As you can see, it is easy to make quite considerable savings each and every month by joining and utilizing the easy barter payment system of Merchants Barter Exchange. Just on these few items alone, the doctor’s office saves thousands in cash by trading instead.

On top of the cash savings, which are important, let’s not forget the other major benefit: more patients. Since MBE ensures that they only bring new business to their members, this example could have introduced upwards of 5 – 10 new patients to that practice. Just imagine what additional cash customers that can create via word-of-mouth advertising. All in all, bartering is a very effective method for any doctor’s office of any size to make significant savings across the board and grow their practice. The best thing of all, MBE takes care of all the paperwork and tax reporting needed for the end of year. With MBE-barter already in place helping thousands of business owners, perhaps the government needs to slow down on their proposed next round of spending and actually look at all options available to improve the fantastic healthcare coverage we already have in America?

It is a slow day in the East Texas town of  Madisonville.

It is raining, and the little town looks  totally deserted. Times are tough, everybody is in debt and everybody lives on credit.

On this particular day a rich tourist from the  East is driving through town.

He enters the only hotel in the sleepy town and lays a hundred dollar bill on the desk stating he wants to inspect the rooms upstairs in order to pick one to spend the night.

As soon as the man walks up the stairs, the hotel proprietor takes the hundred dollar bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the  street to pay his debt to the pig farmer. The pig farmer then takes the $100 and heads off to pay his debt to the supplier of feed and fuel.

The guy at the Farmer’s Co-op takes the $100  and runs to pay his debt to the local prostitute, who has also been facing hard times and has lately had to offer her “services” on credit.

The hooker runs to the hotel and pays off her debt with the $100 to the hotel proprietor,  paying for the rooms that she had rented when she brought clients to that establishment.

The hotel proprietor then lays the $100 bill back on the counter so the rich traveler will not suspect  anything.

At that moment the traveler from the East walks back down the stairs, after inspecting the rooms.

He picks up the $100 bill and states that the  rooms are not satisfactory…… Pockets the  money and walks out the door and leaves town.

No one earned anything. However the whole town is now out of debt, and looks to the future with a lot of optimism.

And that ladies and gentlemen, is how the United  States Government is conducting business today.

If that doesn’t scare the hell out of you, then I don’t know what will.

—————————–

Through barter, we are able to help people make more money, while saving them money to pay off their debts.  As a small business owner, perhaps even the owner of that hotel, you could have paid your “debt” by giving another business owner a night in your unused hotel room.

Doesn’t that just make sense?  Using your unused capacity (unsold advertising space in a newspaper, or an empty seat on a bus) to pay your bills… You’re still providing value to the economy… shouldn’t you get credited for it?

The origin of barter [commodity-backed] money requires goes back to the beginning of trade in ancient societies, which started with temples and clay tablets in Mesopotamia and Egypt:

“Tax payments [by farmers] became standardised in terms of quantities of wheat or barley grain. These grain standards formed the basis for all the early money of account units, such as the mina, shekel, lira, and pound. Money, then originated not as a cost minimizing medium of exchange, but as the unit of account in which debts to the palace (tax liabilities) were measured. As the area over which taxes were imposed increased, palaces found it useful to farm out tax collections to private farmers. The first evidence of lending at interest comes from the practice of payment of taxes by the tax farmers, who then took bondservants and charged interest on the village debts. … The clay shubati (received) tablets record these and other debts. Each tablet indicated a quantity of grain, the word shubati, the name of the person by whom received, the date, and the seal of the receiver. The tablets were either stored in temples where they would be safe from tampering, or sealed in cases, which would have to be broken to get to the tablet. Unlike the tablets stored in temples, the case tablets could and did circulate. A debt could be cancelled and taxes paid by delivering a tablet recording another’s debt whereupon the case which recorded the cancelled debt could be broken to verify the debt terms. This was general practice for several thousand years …. In other words, taxes, debts, and price lists existed for thousands of years, with clay tablets circulating before anyone had the bright idea of reducing transactions costs by creating money through stamping precious metals to coins. … From the earliest times, markets operated on the basis of credits and debits, and even the smallest sales to consumers took place on credit, which could be carried on the books of the merchant for years before being cleared.” Wray, L. R. (2000)., Modern money, in: Smithin, J. (eds) What is Money?, London: Routledge International Studies in Money and Banking, pp. 43/44.

When we refer to the term “barter dollars” in today’s economy we actually refer to what has historically been known as “commodity-backed money” or “representative money”.

Bartering is coming of Age with the heavyweights like:Amoco,Goodyear,Caterpillar,3M,USX,Kmart and Pfizer. Marketers at Amoco saved the company’s parent, Standard Oil of Indiana, the cost of steel piping, thanks to a carefully planned barter. They supplied the latter with chemicals, which were traded to Goodyear for rubber belting materials and later disposed of in another barter. Amoco was paid for the chemicals with trade credits, which Amoco passed up to Standard Oil. It used them in a cashless deal for the pipes.

I’m not real smart, but if the big guys are bartering why wouldn’t everyone else barter?

Barter is nothing new – it’s been around since the dawn of Man – and I’m glad such an old and tried-and-tested method of doing business is actually getting its proper and fair share of the limelight in the local and national press. If one were to be totally honest, barter is the only stable part of our global economy. Look back to the economic collapse of Argentina in 2002. It took them going back to bartering to set their economy back on track. Seven years later over 500,000 people and businesses still hold strongly to barter, because they don’t trust their cash economy. Unfortunately many other western countries are teetering dangerously close to the Argentinean scenario.

That’s obviously good news for the barter industry, and especially for Merchants Barter Exchange (www.merchantsbarter.com) with their new form of trading: MBE-barter. Like the barter our cavemen ancestors participated in, organized barter is nothing new and actually dates back to the mid-1950s here in America. The challenge has always been controlling the flow of internal currency (usually referred to as “barter dollars”) and maintaining the integrity of the barter economy (not letting members inflate prices, or take part payment in cash, or in any other way tarnish the initial reputation of the membership.)

That’s where Merchants Barter Exchange and MBE-barter stands head and shoulders above practically all the other barter organizations out there today. Because of their internal systems and “checks and balances” procedures, you will never incur any of those bad practices when utilizing MBE-barter. In fact, any member caught trying to damage the integrity of the exchange is immediately expelled from the system, thus ensuring only the very highest quality standards in the industry. Unfortunately for their competition, the only way any existing barter exchange hindered by the old way of doing things can even begin to compete on the same level is to start from scratch – that puts them almost ten years behind Merchants Barter Exchange. That’s an impressive head-start and that keeps them ahead of the pack.

Additionally, through these higher quality standards and control systems, MBE-barter allows members to conduct much bigger trades than is even remotely possible with lesser exchanges. A few examples of trades possible via MBE-barter all at 100% (something no other barter company can promote) are $100,000 printing jobs, brand new forklifts, new home and office furniture, vehicles – the list is practically endless. Because everything is transacted at the same cash price and 100% bartered, there is no difference using MBE-barter for needed goods and services as using cash or credit, except for the obvious economic and marketing benefits a member gains.

Therefore, as an alternative to cash, MBE-barter is the best substitute by far, and actually has mechanisms in place to protect existing cash business. Obviously in this Internet-age, there are many web-based barter organizations emerging, however they have simply put a “modern” face on the flawed, old ways of doing barter, which cannot stamp out blending cash and barter for trades, cannot control pricing, cannot effectively co-ordinate member trades to keep the economy balanced and flowing with integrity. In short, they probably won’t last as long as their older companions, or grow to be more than a fleeting fad.

Existing Merchants Barter Exchange members are sitting pretty and patting themselves on the back for getting involved when they did. The good news for non-members, however, is that membership is very simple and the company is expanding incredibly rapidly around the US. Most likely they coming to a city and town near you within the next twelve months (that is, if they are not already strongly established in your town!) For a nominal, lifetime membership fee almost any business can join. The rest of the costs involved with membership are minimal and predominantly pay-per-use transaction fees on purchases made.

No article concerning commerce would be totally complete without at least a slight mention of Uncle Sam. The days of tax-free barter went out the window in the 1980s when barter companies gained the same standing (third-party record keepers) as banks and credit card companies. All barter revenue is considered the same as cash as far as the IRS is concerned and all barter companies must issue 1099b forms to all members for tax reporting purposes.

The economic outlook still looks very bleak (both nationally and globally) and no educated person remotely believes an about-turn any time soon is even a concept. Dumping trillions of dollars into the pot can lead to only two certainties: higher inflation and a tax burden being passed along somewhere. It’s good news for Merchants Barter Exchange and their members, not too promising for those dependent upon the cash world, though.

The origin of barter [commodity-backed] money requires goes back to the beginning of trade in ancient societies, which started with temples and clay tablets in Mesopotamia and Egypt:

“Tax payments [by farmers] became standardised in terms of quantities of wheat or barley grain. These grain standards formed the basis for all the early money of account units, such as the mina, shekel, lira, and pound. Money, then originated not as a cost minimizing medium of exchange, but as the unit of account in which debts to the palace (tax liabilities) were measured. As the area over which taxes were imposed increased, palaces found it useful to farm out tax collections to private farmers. The first evidence of lending at interest comes from the practice of payment of taxes by the tax farmers, who then took bondservants and charged interest on the village debts. … The clay shubati (received) tablets record these and other debts. Each tablet indicated a quantity of grain, the word shubati, the name of the person by whom received, the date, and the seal of the receiver. The tablets were either stored in temples where they would be safe from tampering, or sealed in cases, which would have to be broken to get to the tablet. Unlike the tablets stored in temples, the case tablets could and did circulate. A debt could be cancelled and taxes paid by delivering a tablet recording another’s debt whereupon the case which recorded the cancelled debt could be broken to verify the debt terms. This was general practice for several thousand years …. In other words, taxes, debts, and price lists existed for thousands of years, with clay tablets circulating before anyone had the bright idea of reducing transactions costs by creating money through stamping precious metals to coins. … From the earliest times, markets operated on the basis of credits and debits, and even the smallest sales to consumers took place on credit, which could be carried on the books of the merchant for years before being cleared.” Wray, L. R. (2000)., Modern money, in: Smithin, J. (eds) What is Money?, London: Routledge International Studies in Money and Banking, pp. 43/44.

When we refer to the term “barter dollars” in today’s economy we actually refer to what has historically been known as “commodity-backed money” or “representative money”.
Posted by Tram at 2:10 AM 1 comments
History of Money
In the Beginning: Barter
Barter is the exchange of resources or services for mutual advantage, and may date back to the beginning of humankind. Some would even argue that it’s not purely a human activity; plants and animals have been bartering—in symbiotic relationships—for millions of years. In any case, barter among humans certainly pre-dates the use of money. Today individuals, organizations, and governments still use, and often prefer, barter as a form of exchange of goods and services.

9,000—6,000 BC: Cattle
Cattle, which include anything from cows, to sheep, to camels, are the first and oldest form of money. With the advent of agriculture came the use of grain and other vegetable or plant products as a standard form of barter in many cultures.

1,200 BC: Cowrie Shells
The first use of cowries, the shell of a mollusc that was widely available in the shallow waters of the Pacific and Indian Oceans, was in China. Historically, many societies have used cowries as money, and even as recently as the middle of this century, cowries have been used in some parts of Africa. The cowrie is the most widely and longest used currency in history.

1,000 BC: First Metal Money and Coins
Bronze and Copper cowrie imitations were manufactured by China at the end of the Stone Age and could be considered some of the earliest forms of metal coins. Metal tool money, such as knife and spade monies, was also first used in China. These early metal monies developed into primitive versions of round coins. Chinese coins were made out of base metals, often containing holes so they could be put together like a chain.

500 BC: Modern Coinage
Outside of China, the first coins developed out of lumps of silver. They soon took the familar round form of today, and were stamped with various gods and emperors to mark their authenticity. These early coins first appeared in Lydia, which is part of present-day Turkey, but the techniques were quickly copied and further refined by the Greek, Persian, Macedonian, and later the Roman empires. Unlike Chinese coins which depended on base metals, these new coins were made from precious metals such as silver, bronze, and gold, which had more inherent value.

118 BC: Leather Money
Leather money was used in China in the form of one-foot-square pieces of white deerskin with colorful borders. This could be considered the first documented type of banknote.

800 – 900 AD: The Nose
The phrase “To pay through the nose” comes from Danes in Ireland, who slit the noses of those who were remiss in paying the Danish poll tax.

806 AD: Paper Currency
The first paper banknotes appeared in China. In all, China experienced over 500 years of early paper money, spanning from the ninth through the fifteenth century. Over this period, paper notes grew in production to the point that their value rapidly depreciated and inflation soared. Then beginning in 1455, the use of paper money in China disappeared for several hundred years. This was still many years before paper currency would reappear in Europe, and three centuries before it was considered common.

1500s: Potlach
“Potlach” comes from a Chinook Indian custom that existed in many North American Indian cultures. It is a ceremony where not only were gifts exchanged, but dances, feasts, and other public rituals were performed. In some instances potlach was a form of initiation into secret tribal societies. Because the exchange of gifts was so important in establishing a leader’s social rank, potlach often spiralled out of control as the gifts became progressively more lavish and tribes put on larger and grander feasts and celebrations in an attempt to out-do each other.

1535: Wampum
The earliest known use of wampum, which are strings of beads made from clam shells, was by North American Indians in 1535. Most likely, this monetary medium existed well before this date. The Indian word “wampum” means white, which was the color of the beads.

1816: The Gold Standard
Gold was officially made the standard of value in England in 1816. At this time, guidelines were made to allow for a non-inflationary production of standard banknotes which represented a certain amount of gold. Banknotes had been used in England and Europe for several hundred years before this time, but their worth had never been tied directly to gold. In the United States, the Gold Standard Act was officialy enacted in 1900, which helped lead to the establishment of a central bank.

1930: End of the Gold Standard
The massive Depression of the 1930′s, felt worldwide, marked the beginning of the end of the gold standard. In the United States, the gold standard was revised and the price of gold was devalued. This was the first step in ending the relationship altogether. The British and international gold standards soon ended as well, and the complexities of international monetary regulation began.

The Present:
Today, currency continues to change and develop, as evidenced by the new $100 US Ben Franklin bill.

The Future: Electronic Money
Digital cash in the form of bits and bytes will most likely become an important new currency of the future.