Thursday, April 18, 2024

Retail Barter

Collective Currency is an online retail barter exchange for members to facilitate multi-party trades between any two or more businesses in the network.

Small business owners conduct barter transactions through their membership in Collective Currency, and can access our select affiliated reciprocal network of commercial trade exchanges. In practice, most members do their business within a 50 km radius. A significant proportion of commercial barter business revolves around services – everything from chiropractors, attorneys, graphic designers, and plastic surgeons, to mom-and-pop businesses like dry cleaners and auto repair shops.

There are approximately 400 commercial barter exchanges in the U.S., and another 200+ worldwide. The number of members per exchange ranges from under 200 to over 10,000, with most exchanges listing under 1,000 members. In total, the global business-to-business network of barter exchanges represents over 450,000 companies and service providers.

Under the Tax Equity & Fiscal Responsibility Act of 1982 (TEFRA), trade exchanges are classified as third-party record-keepers, with the same fiduciary responsibilities as bankers and securities brokers.

Corporate Trade

Larger companies can trade goods and services through accounts receivable (AR) trading, relying on a corporate barter exchange to purchase the goods and services they need with their trade credits, and subsequently to fulfill the credits by providing their goods and services, when requested by another member, whether it is the same member whose trade was bartered for in the initial deal, or a third party.

An approved trade broker may act as the principal in the barter transaction, buying and selling for their own account, and becoming the purchasing agent for its clients, with regard to the use of their trade dollars.

Corporate barter as it is practiced today originated in the late 1960’s. At that time, corporate barter was primarily a financial tool – a way for companies with excess or obsolete inventories to recover costs and even full wholesale value for their inventories. Today, corporate barter both remains a profitable alternative to markdowns or liquidation and provides a valuable way to expand a company’s advertising and marketing plan using the leverage of a barter network. Corporate barter also facilitates foreign trade with countries that have goods and services to exchange, but no hard currency.

Examples of corporate trade are numerous: unfilled trucking on return trips, idle plant equipment, excess maintenance inventory, years on a lease when a company moves, and even stock in a firm. Privately held companies sell restricted stock for trade dollars to offset marketing costs that will help build name recognition and market share, to build trade dollar reserves or to purchase hard assets such as real estate. Only our most experienced Trade Brokers are authorized to operate as Corporate Trade Brokers.

Barter Basics

  • Increase your client base from Collective Currency referrals.
  • Sell excess, unsold capacity to your new customers.
  • Increase your buying power with revenue from new sales.
  • Use Collective Currency to pay for the products & services you want.
  • Conserve cash and increase cash flow.

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