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 draws its membership from businesses across the same Northwest Arkansas and River Valley area we serve.
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.
Where logistics fits into a local trade network
Trade works best when what you offer is something other members genuinely need on a repeating basis, and delivery qualifies. A retailer that trades for delivery capacity can offer same-day drop-off without buying a van; a manufacturer can cover an unexpected run without pulling someone off the floor.
Two of our services fit that pattern especially well. Dedicated routes suit members with predictable, repeating movement — the same stops on the same days — because a fixed schedule is easy to budget for in trade dollars. Residential delivery suits members selling to households, where the last leg to the customer’s door is the part that is hardest to staff in-house.
If you are weighing whether to bring delivery into a trade arrangement, the practical question is volume: a steady weekly pattern is far easier to price and schedule than occasional one-off runs.
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.