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BENEFITS OF BARTER

Barter increases sales
A barter exchange markets your company to thousands of local, national and international businesses who are all potential customers. For example, as at 2006, Bartercard has over 23,000 member businesses in Australia and over 55,000 member businesses around the world to facilitate incremental business over and above your daily cash-paying customers. Businesses barter to purchase what they need or want, and pay for them with the additional sales of their goods or services.

Barter improves cashflow
Cash savings are the primary benefit of barter. Barter allows you, as a business owner, to pay for what you need with your own goods or services, allowing you to preserve working capital for other expenses. When you use barter, instead of cash, to purchase needed goods and services, you reduce your cash costs by paying for them with revenue generated by incremental barter sales. Making purchases with your Trade Dirhams means the payment is made with new sales - sales made by your exchange affiliation. Bartering helps reduce cash outlays for overhead costs. Many of the services offered through barter — such as accounting, cleaning, gifts, restaurant dining and travel — relate to overhead costs. Obtaining these overhead services through barter rather than writing out a cheque saves you cash. “The reason I like barter is because it’s an effective way of retaining cash when you need to buy something for your business,” says James Tuckerman, founder and director of Anthill Enterprises, publisher of the fastest growing Australian business magazine, Australian Anthill Magazine. “People still need cash, and barter is helpful in preserving cash as a resource. Plus, there are a lot of operational costs that are well suited for trading.”

Barter moves excess inventory and fills idle inventory time
Bartering also allows you to improve inventory management by converting excess products into valuable goods and services. If you barter, you avoid having to liquidate excess inventory through drastic discounting. If your small business experiences seasonal markets, barter provides a profitable way to use the inventory on a regular basis. Using a barter exchange such as Bartercard provides a system to put that excess to use in profitable ways. Bartercard accomplishes this objective by matching your goods or service with businesses looking to purchase them on trade.

Barter can enhance productivity
Barter helps companies put inventory, equipment and employees to good use, creating new revenue that would not have been available otherwise. That new revenue can be used to finance the purchase of new equipment, raw materials or services to support the business. Essentially, a company’s less productive assets are exchanged for more valuable goods or services through the help of a barter exchange.

Barter can reduce non-performing assets
Businesses with obsolete inventory frequently find that bartering the assets yields a much better value than liquidating it for pennies on the dirham. Instead, the company can sell the inventory to a barter member for trade credits close to the carrying cost or book value, and then apply those credits to other business expenses, such as marketing, entertainment, travel or raw materials. Exchanging an unwanted asset for something else of value helps recover a significant amount of incremental revenue that might otherwise have been lost.

Barter can reduce seasonality
During periods when business is typically slower due to a company’s goods or service mix, companies can still strengthen their overall financial position by accepting trade credits through barter.

Barter facilitates new cash sales
The key to sales success is referrals – word-of-mouth marketing. If you perform a good job for a client you serviced through your barter exchange, they will undoubtedly refer their cash-paying friends, clients, family and associates to you.

Barter facilitates increased profits
Sellers within a barter network make incremental barter sales (over and above their cash business) and increased sales mean increased profits. Additionally, the real cost of the goods or service you purchase on trade is actually the wholesale cost of your Trade Dirhams earned (see benefit: Barter creates wholesale buying power).

Barter expands distribution channels
Barter exchange members can cost-effectively expand their business market reach by marketing to the exchange network’s membership base. The larger the membership base, the better, as this provides a larger market and a far higher selection of trading options. Bartercard has a nation-wide and global membership of over 23,000 Australian businesses, and over 55,000 around the world. This provides strong marketing and trading options through its national and global directory service, plus the global e-Commerce and Internet Auction portals.

Barter creates wholesale buying power
With barter exchanges, the real cost of the goods you purchase on trade is actually the wholesale cost of your Trade Dirhams earned. Making sales with built-in profits makes the cost of your purchases more economical on trade. When you join a barter exchange, you open the door to a new, cash-free way of handling everyday business and personal expenses.

Barter builds customer loyalty
When one business is connected to another through barter exchange, the two businesses are connected by more than a simple transaction, rather a network. Businesses that routinely trade for goods and services will bypass competitors to deal with each other.
 
Barter gives you advantages over your competition
Increased customer base, expanded geographic markets, additional sales, improved cashflow and increased profit, all facilitate increased advantage over your competition. Bartering through a trade exchange can assist a small business to portray the image of being a big business without the cash-costs incurred by much larger businesses. For example, barter enables businesses to execute additional marketing to gain more sales without spending cash.
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