A newspaper illustration depicting a man engaging in barter, paying his yearly newspaper subscription to the “Podunk Weekly Bugle” with various farm produce. Barter and trade has been a common economic practice for centuries and remains a viable method of commerce. (Photo credit: Wikipedia)
Owning and running a small business takes a diverse array of skills, lots of time and creativity. It also requires the support of the community at-large and other small business owners. “A rising tide raises all ships,” says the old adage and it is true.
One way for small businesses to support each other is by participating in a local trade network. Local trade networks are barter systems where goods and services can be traded without using cash.
The networks allow businesses to preserve cash, get what they need to do business and to support one another. On Time Logistics is a member of Local Trade Partners, a professional trade exchange that has been serving Northwest Arkansas and the River Valley since 2009.
How Local Trade Partners works
Each trade organization is going to have slightly different rules but how it works but with Local Trade Partners, the trades are made using “trade dollars.” If a service or product cost a certain price in standard currency it is that same price in trade dollars. Taxes and tips must be paid in cash.
This method allows members to not be tied to a direct trade of services with a given partner. In other words, we at On Time Logistics accept trade dollars for courier services and we can then use that to pay for our marketing services, catered employee meetings and even vehicle maintenance. Local Trade Partners has approximately 700 members.
How can trade bolster small business?
There are many benefits to small businesses participating in a local trade network.
- Increase sales-trade organization members refer each other, therefore increasing potential sales beyond the trade transaction.
- Access new customers-trade organizations are fantastic referral agencies. You know the members have been vetted and they have similar interests regarding business growth.
- Move excess inventory-instead of slashing prices to move excess inventory, businesses can offer the excess inventory on trade (perhaps for a slightly reduced price) and still have something to show for it.
- Fill idle production time-during slower periods in business, some companies might struggle to have enough work for their employees to do. By accepting trade, these companies can keep their workforce active and employed.
- Improve cash flow-plain and simple—if you’re receiving trade dollars, you can spend those trade dollars on services you might take have taken out of the budget during rougher economic times.
How can my business get involved in a local trade network?
First, you need to know what networks are active in your area. The National Association of Trade Exchanges (NATE) offers an online directory you may browse. Ask the businesses you already work with. Many of them might already be participating in an exchange.
When deciding to get involved with an exchange, be sure to seek one that is facilitated by a certified trade broker. These professionals are knowledgeable in accounting practices, current trade and barter best practices, ethics and barter marketing. Exchange members also may earn this certification through NATE.
Then start bartering and trading! And keep it up. It may seem challenging at first, but you’ll begin to get the hang of it and you’ll soon understand how trading and bartering can help your business grow. Be sure to keep it up so the trade network stays strong.
Can your business benefit from trade and barter? Would you like to know more about our experiences? Contact us On Time Logistics at (479) 717-2206.
