Fair Trade
The digital age brings the good ol' days of bartering to B2B transactions.
Online retailers are turning to an old concept these days to get
rid of excess inventory-they're rediscovering the art of
bartering.
Although bartering itself isn't new, its popularity is.
According to the most recent statistics from the International
Reciprocal Trade Association (IRTA), $16 billion worth of products
and services were bartered in the United States last year. Experts
predict that figure will reach $26 billion this decade.
Some attribute the industry's growth in part to the slowing
economy. Now that more people have less disposable income,
there's more accumulation of unused inventory that needs to be
moved. Plus, large numbers of netpreneurs rely on barter to get rid
of excess inventory these days because they haven't yet
mastered the subtler side of sales-including how to order goods
customers want, calculate proper quantities and bring buyers to
their sites. Too often, eager online merchants end up with
mountains of unwanted, unsold wares.
4
leading Web sites field more than half of all
Net traffic in the United States: AOL, Microsoft, Napster and
Yahoo!.
SOURCE: Jupiter Media
Metrix
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Proponents insist bartering serves as an attractive solution for
business owners because it enables them to get fair market value
for excess inventory and underperforming assets. Bartering also
offers an alternative to selling inventory at greatly reduced
prices to liquidators, holding close-out sales or discounting
excess inventory. In fact, on average, bartering companies pay
businesses trade credits equal to three times what liquidators
would pay for the same so-called distressed inventory.
"When you're liquidating something, you're getting
pennies on the dollar," explains Bob Meyer, founder, publisher
and editor of Barter News, a Mission Viejo, California,
journal for the reciprocal trade industry. "When you're
selling through a trade exchange, you get the full wholesale or
retail rate. So you get top-dollar-the same [amount] you'd get
when selling to your normal clients, only in trade
dollars."
The arrangement works well, in part, because most barter
companies give entrepreneurs tens of thousands of products and
services to choose from-and there's no cash outlay. A sample of
offerings might include: advertising time or space from
broadcasters and media outlets; business travel deals for hotels,
car rentals and airlines; office supplies and products; printing
and packaging services; layout and design services; photography;
carpeting and roofing services; and even telecommunications
services and electricity.
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