Hopefully this is the first of many books to come that I will review on the topic of barter. I heard about this book through a fellow barter fanatic who recommended it to me. It was written by Bill Meacham of BancMarc who is a 30 year veteran in the industry. I traded some emails and phone calls with Bill and he proved to be a wealth of information about all things barter and generously offered to send me a copy of his book for review.
Smarter Companies Barter is an 80 page self published book that is a quick read even for speed-challenged readers like myself. What it lacks in polish it more than makes up for in passion. The book explains the value of a modern barter exchange to the uninitiated, really hammers on the importance of ethics for all parties involved in barter and does a good job reminding folks that run barter exchanges of how to run a tight ship. A recurring theme in the book is the importance of member education. One potential use for the book is for exchanges to give it to new members as part of an educational program.
I have to admit that the book did lead me to question one of my own trading practices (more on that later). It’s an unusual book that motivates me to make changes in my own life so I have to give this book my recommendation.
If you want to buy a copy of Smarter Companies Barter it is available at www.smartercompaniesbarter.com. Ironically it is not available on barter at the time of my publishing this article. I would also like to note that the author has mentioned the idea of sponsoring this blog. That possibility has not influenced my review in any way, but I’m afraid you’ll need to take my word for it.
A great way to improve cash flow and decrease accounts receivable is to create your own barter currency. This can be as simple as issuing gift certificates. You might be amazed how many people you do business with might accept these as payment. Of course this will always be easier with new vendors rather than ones that already expect cash from you. It’s as simple as asking the person with authority if they would accept your gift certificates as payment. Your barter exchange may also be willing to purchase gift certificates from you.
Of course, some services would be better suited than others for this type of trade. For example, my primary business is web development. Although the vast majority of businesses need a website, many of them already have a vendor in place and a website isn’t a consumable item that you need to re-purchase every month. Not to worry if you are in that situation. Here’s a cool twist on this classic concept: You can use other people’s gift certificates as your own barter currency too. For example. My firm does web development with an online grocery store that specializes in organic food delivered to your home. Because absolutely everyone has to eat, this is a perfect barter currency. Right now I’m negotiating with a local butcher shop to build their website and I’m hoping to do the same thing with them. My family does not need thousands of dollars worth of steak, but I sure do have a lot of friends in my barter network that would love to get their hands on some gift certificates for meat from this shop.
The one part I still have to work out is the actual certificates that will be used if I make a deal with the butcher shop. Currently I’m thinking that I will have numbered scrip printed up for the butcher shop which each piece of scrip worth $10. I can have them printed for the shop (on barter of course), they will pay me with them, then I will trade them away when I buy other items through my barter network. The butcher shop is a big winner too because they will have many new customers come through their shop. Hopefully once they spend their scrip they will come back and spend cash.
Of course I should mention that (regardless of what you use as currency) all sales need to be reported to the IRS. Additionally, make it clear on your scrip that they are gift certificates and ARE NOT US currency. None of us want to be talking to the secret service about counterfeiting.
Don’t you wish Yoda would have shown you the ropes when you first started bartering? There is so much to learn when you first start bartering. Many business owners are so busy trying to run their own business that they really have no time to devote to teaching themselves how to get the most out of trading. Additionally many brokers are so over-loaded that they simply don’t spend a lot of time training their members. The end result: There are a lot of people that are really bad at barter and there is a much higher attrition rate for exchange membership than there needs to be.
I propose that all barter exchanges develop a formal training/mentoring program. Everyone gains from having more potential barter partners so everyone should get involved. My vision is two-pronged:
- Exchanges should set up formal group training sessions. The sessions should include basic training for new members and advanced training for folks that have been around the block and just need some new ideas. These classes can either be taught by management, brokers or even by advanced members that are paid on barter. I wouldn’t pay members to attend, but I would have lots of good food/prizes at all the events (all purchased on barter of course). The events could even have a “mixer” feel to them and be hosted by a member that has products/servcies for sale at the event.
- Exchanges should set up a formal mentoring program where advanced members can help newer members one on one. Mentors could be minimally compensated (on barter of course). Mentors can help their assigned members find good ways to spend their credits (the most common problem for new members) as well as help with all other aspects of barter.
Please post back if you are familiar with programs along these lines of if you have any suggestions for improvements.
Without getting too much on my soap-box I have to say that I think it is totally ridiculous that many/most barter exchanges have rules against trading for firearms. The best I can tell these rules are based on either a bias against the second amendment, or fear based on ignorance of the law. Seeing that it seems unlikely that the barter exchanges will see the light any time soon all the firearms I’ve bartered for have been direct trades.
Here’s how it’s done:
As with all direct trades the first step is to find a willing trade partner. In my case, I have a well established web development company. Seeing that most gun shops need a website, all I had to do was contact enough gun shops offering a trade and eventually I’d find someone who wanted to barter with me. Once I found a few trade partners, I wrote up contracts to develop websites for them and how much the projects were worth. The gun shops provided me with a credit in their shop for that amount. That was all there was to it. I purchased the firearms exactly the way I would for cash. I did the background checks and I sat through the “waiting period” and eventually I picked up my shiny new guns. Perfectly legal. Perfectly easy.
I haven’t done this, but it’s also easy to trade for firearms from joe-citizen that does not run his/her own gun shop. In those cases you agree to your trade, then you and your trade partner take the weapon to a federally licensed dealer who conducts the paperwork for you for a small fee. If barter exchanges were to allow firearms trade, all they would need to do is stipulate that trades aren’t finalized until after the paperwork is completed by a licensed dealer. Even interstate trades would not be a problem. Laws about firearms vary from state to state however the dealer will spot any problems along the way so neither the traders or the exchange need to be experts in the industry.
The truth of the matter is that the joke is on the trade exchanges. They are excluding themselves from profiting from a large group of honorable and perfectly legal transactions. Maybe I should set up a barter exchange that specializes in firearms trading. What do you think?