These days, though, Cressman sees bartering as a significant way to reduce cash outflow. Last fall he joined the Stroudsburg (Pa.) Merchants Barter Exchange, an association that coordinates and organizes trading of products and services among its more than 10,000 business members. In September, when the transmission blew on one of the firm’s trucks, Cressman turned to the exchange and bartered for a replacement. “That would have cost between $1,500 and $2,000, and that was not in my budget,” he says. He also bartered to acquire a $4,000 piece of stone-crushing equipment. “I probably wouldn’t have bought one this year,” he says. “It would have had too much of an impact on my cash flow.” But as a result of strategic bartering, Cressman estimates he has been able to save about $6,000 total so far this year.

In recent years, bartering has gained currency as a relatively easy path for small outfits to attain goods and services without having to dig into their coffers. It has also become a successful channel to attract new customers and expand one’s business. According to the most recent numbers compiled by the National Association of Trade Exchanges (NATE) in Mentor, Ohio, some 400 barter exchanges in the U.S. and Canada generate transactions worth $4 billion a year.
On the Upswing

And now, with banks cutting back on credit lines or shutting them down altogether, the use of barter has gained renewed momentum. Notably, Thailand, the world’s largest rice exporter, last month announced it planned to barter rice for oil from Iran, one of world’s top 10 rice importers. For small businesses, ramping up their own use of barter is a strategy that allows them to reserve cash and still expand operations at a time when credit lines have yet to thaw.

Tom McDowell, executive director of NATE, says he has seen a 10% to 12% increase in new clients joining organized barter exchanges. “Suddenly, [business owners] were running into different obstacles, and they started looking for other avenues for resources, not just credit,” he says. “The interesting thing that is happening in this economy is that businesses still have inventory and capacity. They still have expenses. What they don’t have is customers.”

Barter exchanges (BusinessWeek SmallBiz, 4/16/08) are fee-based membership groups. Typically, barter dollars are issued when a member performs a service or offers a product that can then be used to purchase goods or services of another member within the exchange. (The exchange receives a commission on the “purchase” side of the transaction.) Most exchanges work on a 50-50 cash-to-barter system, while others, such as Merchants Barter Exchange, operate as a 100% barter trade system. Most offer lines of credit that can be used to snap up a host of items, from carpet cleaning services to office supplies to large equipment.
A Way to Get Credit

Merchants’ founder, Steve Bolles, says membership in his eight-year-old exchange, which has offices in 30 states, has tripled this year. As the financial situation remains bleak, Merchants continues to ramp up clients. “Just 18 months ago, when we would go and talk to business owners about signing up, they would say, ‘We don’t need to talk to you.’ Now everybody gives us an appointment.” A strong inducement: “Everyone we sign up gets a line of credit right away,” Bolles says.

“Most people are looking to conserve cash,” says Ralph Sigler, who owns Carolina Packaging & Supply in Raleigh, N.C., and belongs to two different exchanges. “We started bartering about 12 years ago. The way we were growing, it made sense to substitute barter dollars for cash dollars.” Sigler says he bartered to obtain everything from security system installations to letterhead and envelopes. “I’ve saved anywhere from $20,000 to $25,000 a year by bartering, and I’ve also taken on a lot of new accounts.”

Bartering serves as another avenue to help keep businesses afloat. “I would say my bartering has gone up 20% in the past six months,” says Mike Cody, owner of Chip & Crack Windshield Repair in Garner, N.C. “At first I used it for hotel stays and gifts to employees.” Now he says he has begun to barter to obtain equipment for his business instead of having to spend cash. “If I were to make a guess, I’d say that I’ve saved over $1,000 this year.”

“Eventually we will see a shift in thinking,” says NATE’s McDowell. “What will happen is that people who were reluctant to use the credit line, or used it sparingly, will see the tremendous credit crunch and will look for new resources. They will find that they can use trade exchanges.”

Perman is a staff writer for BusinessWeek.com in New York.

Barter has become such a popular concept because it is a clear way to hold onto your cash while being able to purchase everyday items and accomplish everyday tasks by using credits earned within the company. Trading products or services with other barter members, within a company, attains these credits.
All types of services and products are available, especially with an enormous increase in the barter market over the past years. Companies available throughout the country offer such business-oriented items and services as web design, advertising and printing. Goods are also available for personal life including construction, medical and car repair. Businesses offering leisurely activities including golf courses, vacations or restaurants can also be utilized.

Advertising and publicity are other enormous factors when seeking the benefits of barter. For example, one nationwide barter company, Merchants Barter Exchange, works with brokers who send out emails each day and faxes once a week advertising one member. This allows members to see what is available and also gives each barter client pinpointed recognition. The exposure is given at no cost. Any business owner knows, on a regular basis, they will spend thousands to have their name heard by potential customers. With barter it’s done for free.

Small businesses enjoy being a part of barter companies because it helps them keep pace with larger competitors. With thousands of businesses trading on a regular basis, the chance of one barter member picking up from another is much more likely than the initial member choosing to use a non-barter customer and paying cash. This sends business from the larger companies, who do not belong to the group, to the barter members, creating a new set of clientele for the smaller business.

Becoming increasingly popular, the industry is looking forward to continued growth throughout the next year. Barter is now recognized as a business tool every company of every size should consider using to increase market share.

The good news about barter and the positive wave of help and assistance it’s bringing to businesses in need around the US continues to spread. Once again it’s encouraging to hear that Merchants Barter Exchange is spearheading the thrust of positive PR about the industry.

Steve Bolles, founder and President of Merchants Barter Exchange, recently finished a whirlwind radio tour of over 16 national radio shows promoting the benefits and virtues of the highly-proven MBE-system.

“It was an exhilerating challenge,” comments Bolles, who was approached independently six weeks prior to the tour. “I’ll always try to make time in my schedule to help educate and promote the true value barter brings to the business world.”

The tour – conducted predominently via phone – last week included brief appearances on shows like Lifestyle Talk Radio with Frankie Boyer, WDIS Newstalk with Dan Collier, “Ericka and Jack Attack”, Bob Langstaff with WAMV, and Rude Awakenings with “Bulldog” Jeff the Dude.

Steve and MBE, with the continued solid work by their PR company Smith & Associates, are looking forward to a very strong third quarter of continued record growth around the US and even more media exposure in print, radio, and soon on TV news shows.

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Members of the media wishing to interview Mr Bolles, or contact MBE about their incredible activities in the national business community should contact their liason, Caitlin, at Smith & Associates: 919 674-6020

Already in existence for 8 years in the rest of the country, Merchant’s Barter Exchange has rolled into town and is helping local businesses to conserve cash, decrease their excess inventory, and generate new sales.

Already, local businesses are starting to take notice.

Eric Wood, of local web design service MoonViper Web Services says that since he began working with Merchant’s Barter Exchange, his business has more than doubled, and he’s having to turn away projects because of too much demand. He’s looking into hiring more designers to help handle the workload.

According to the Los Angeles Times (August 11th “Local currencies cash in on recession”), communities all over the country are starting to generate their own local currencies based on the federal government and major banks inability to provide enough currency to the marketplace.

“This currency could be used to pay for goods and services in the marketplace, such as carpet cleaning, dentist appointments, and clothing, but because of the banks lack of funds in the mortgage fallout of last year, businesses are having a hard time getting loans” says Wood.

“Businesses today are not suffering from a lack of demand, they are suffering from a lack of money to pay for their services” he continues. “By providing those goods and services to the economy, businesses stand to generate valuable trade currency, which they can then use in exchange for other goods and services which they need.”

Merchant’s Barter Exchange works by allowing members to trade their goods and services for other things that they need. For instance, a web designer may create a website for one client, and in exchange, they are able to trade the value of that service for other items they need. With Merchant’s Barter’s nationwide network, and over 10,000 member businesses, the list of items and services available is huge.

Member businesses provide everything from hotel rooms and spa visits, to expensive luxury condos. As long as the goods and services are traded at the same value, everyone receives a fair deal, and the economy continues chugging along.

Unlike the local scrip described in the Los Angeles Times article, Barter Dollars earned through the exchange are good nationwide, at any participating business, and are spent just like cash. When asked how he spent his Barter Dollars, Wood said that he has used them for sign printing to promote his business, hotel stays for out of town guests, and even financed his entire wedding using Barter Dollars. “Though the exchange, I was able to find a wedding planner, a florist, limos, cakes, a tremendous catering service, even the diamond rings that are now our wedding bands.”

Long time Burning Man participants know that, on the playa, cash is not only not needed, it’s not welcome. Everything at the Burning Man festival is traded, and that’s part of the allure for those who attend the festival. Some even feel that allowing cash trades would completely destroy the feeling of the event.

Even Craigslist has noticed the uptick in trades across the county, and has a great graph on their blog showing a huge increase in the number of barter postings nationwide. “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 .”

Wood plans to continue to accept Barter Dollars to grow his business. “By allowing me so many options,” he says, “I’m free to grow my business the way I want, and at the same time, meet some great people.”

Peter Daniels, owner of Print 411, is firmly standing by Merchants Barter Exchange. “MBE is a remarkable company providing a remarkable service to businesses like Print 411 around the country,” stated Daniels. “I will continue investing my time with Merchants Barter and will honor my membership with the company.”

Print 411 generally works within their Tri-state area, however Merchants Barter Exchange allows the company to extend their services nationwide. As a result, Print 411 has gained customers who would have otherwise been unattainable.

“Being known nationwide is very exciting for this company. My broker does a great job advertising us throughout all of the members and I also find out about members I would never have utilized if it wasn’t for barter,” stated Daniels.

Print 411 is planning on taking on a $30,000 printing job for a firm in one of the newest MBE territories in the Midwest. MBE has recently completed a successful training program in Phoenix and Seattle

For those unfamiliar with barter, what is Merchants Barter Exchange and what does it do?

Historically barter is the one-on-one exchange of similar or like-valued goods or services instead of using cash or currency. Merchants Barter Exchange is an ever-growing national network of diversified business owners that utilize the simplicity, ease and efficiency of our MBE-barter system to trade for multiple hard goods and services at the same price as cash with other members of our network. In short we have created an alternative payment mechanism for business owners to turn what they have too much of (time, inventory, or capacity – in essence their inefficiency) into positive revenue, increased cash flow, better marketing, and save a bunch of cash as they do so.

What was your inspiration behind Merchants Barter Exchange?

Back in the 90s I had another business and was a member of an older and very different kind of barter company. The more I used their antiquated mechanism, the more I noticed many flaws and huge areas of improvement. They had no systems in place to prevent people inflating the price of their goods or services, or price gouging, they also charged when a client bought and when they sold, they didn’t seem to have much control over how people traded and with whom, and even allowed members to pay part in cash and part in trade, which didn’t seem to make any sense to me. Most of the other members I dealt with were very unhappy with the overall system. That’s when I started to look for a better barter company, but after extensive research I discovered that every single barter company had the same flaws and challenges.

So what did you do to make Merchants Barter Exchange so different?

Firstly, we centralized the control and the membership list. This allowed us to ensure we only sent members brand new business and were not converting cash clients to trade clients. It also ensured we had secure systems in place to stop people charging more than they would for a cash transaction. It didn’t make any sense to pay more because it was barter, as you lost all the economical benefits. Since we have the control, we are able to expel any member that should try to break the rules that keep our system running effectively. Secondly, with control of the integrity and value of the MBE-barter dollar, it allowed us to do large and small trades for our members. I believe we are the only national barter company that can brag the ability to do $100,000 printing jobs 100% on trade with no cash element. Thirdly, since our system worked so well, we expanded very rapidly and needed to develop a solid and ongoing direct sales division to ensure we were able to meet as many of our members needs as we could. To date I think we have the best fulfillment rate and the greatest client retention rate (95%) of any barter company in the US.

What are you currently doing to ease the crisis in the US economy?

Even though we have grown steadily since we began in 2000, we are nowhere nearly as large as I would have liked us to be by now to help the millions of small business owners around the US, and around the world that can benefit from the MBE-barter system. Right now we are working on rolling out our corporate licensing program as fast as we can to reach as many new businesses and as many new cities around the US as we can. The major challenge has been screening the right entrepreneurial candidates that not only have the investment capital to buy in, but have the right morals, ethics, and responsibility for us to allow the priviledge to own and operate a local sales region. We are helping all those we can right now and improving the lives of our members and people in their communities, in time we will help increasingly more individuals.

Looking to the future, do you have any plans to expand beyond the US?

Absolutely! Our primary focus obviously is to assist the American business owners right now, however we created our business model to be a global monetary alternative. We already have interest from other countries around the world eager to implement our system into their economies. When the time is right we’ll definately expand internationally. Everything in good time.

I also heard you’re working on a book, is this true?

Yes. I’ve been co-collaborating on a book about the industry and the major differences and functions of the MBE-barter system with a close colleague in the industry. Right now we have more pressing issues to deal with and the book project has taken a slight back seat. We’ll finish it in due course, but it’s been an interesting project to work on.

Doug mentioned he had bartered often in the past, as he also owns and runs his own dairy farm – who hasn’t heard of a farmer that barters! Roberta – aka the “Queen of Cheap” – added that she had utilized the many benefits of bartering in her business experience. Both were interested in Merchants Barter Exchange’s rapid and successful expansion program.

In light of growing concerns about the ‘real’ stability and direction of the US and global economy, MBE could not have asked for more fertile times to be rolling out their aggressive business licensing program. Unlike most other barter companies, MBE insists on transactions being 100% on trade (no part cash, part barter, or ‘blends’ as they are called in the industry) and actually allows all members to spend first, if they wish (which most other companies say, but rarely actually can!) Most importantly in this current “cash is king” environment, MBE has systems in place to stop pre-existing cash clients being converted to barter ones.

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More information about owning and running your own MBE exchange can be found at: Licensing Info Site. Additional information about the Good Day Show that broadcasts to 360 stations nationwide and airs week days 4am – 10am to approximately 3 million listeners: http://www.dougstephan.com/.

The MBE Information Booth

Hundreds of Christian businesses, business owners, and industry experts converged upon the beautiful city of Austin, Texas, on April 22nd to 25th for this years K.E.Y.S. event (Kingdom Economic Yearly Summit) at the Promiseland Church.

More than forty speakers and panelists like Os Hillman, Dr Lance Wallnau, Dr Matt Mannino, and Dr Sharon Stone captivated the audience with their insight, awakenings, and knowledge about Christian solutions to the increasing global economic troubles effecting business today.
The Main Stage

The Main Stage

Merchants Barter Exchange was priviledged to be one of the major sponsors of this years event, and the radically different and effective MBE-bartering system gained incredible attention from almost all attendees. Representing the company were licensees Shawn Cressman and Anthony Donnelly, and founder and President, Steve Bolles.

“It was as if the entire conference was organized just for us!” states Cressman. Speakers like Pat Franis and economist Dennis Peacock, to name just a couple, actually called for a reinvented method of doing business: namely a return to the proven system of bartering to solve our economic woes.

The entire conference was extremely envigorating, as Donnelly comments, “I’ve been to many events in the US and in Europe, but this summit was incredible… the energy and power of all the participants was almost overwhelming.”

Branding the event as a “total success”, Bolles and his growing barter organization have extremely high hopes for a continued growth in 2009, predicted to be even larger than their growth the previous year.

Our thanks goes to Dr Bruce Cook and his team for organizing such a fantastic Christian business event. For more information about K.E.Y.S., go to http://kingdomeconomicsummit.com