On February 8th 1991, three Gold Coast business partners launched an audacious concept when they created a central exchange for bartering.
They called it Bartercard.
Although barter is the oldest form of commerce, in a sophisticated economy it is unrealistic to expect a café owner to directly barter with a plumber, or an accountant to swap goods and services with a book retailer.
The invention of Bartercard 20 years ago resolved that problem by establishing an electronic clearing house for members and creating ‘Trade Dollars’ as the currency for barter inside the system. So member businesses could ‘sell’ their own goods and services into the system, and convert them to trade dollars, with which they could ‘buy’ goods and services from another member business.
This eased cash flow difficulties for thousands of small businesses.
The fact that Bartercard now boasts approximately 20,000 businesses as members in Australia alone and operates around Australia and the world, is evidence that what to some looked like a novelty has now become an alternative finance system for small business owners, including EFTPOS cards and lines of credit. Bartercard accounted for more than $25 billion in barter transactions over the past two decades.
Bartercard International’s executive chairman and co-founder Wayne Sharpe is convinced that it’s the company’s unique business approach that has been responsible for defying the odds and being able to celebrate its 20th anniversary this year.
“The Bartercard difference includes a credit card type account system, an extensive member directory, web-based eCommerce solutions and Bartercard’s members-only inventory auctions which allow one business to offer up its excess stock for bids.
“We implemented some of these things very early in Bartercard’s life, when our critics didn’t see how it could be done. For instance, we launched Bartercard with a plastic member’s transaction card when the US based industry was using vouchers.
We developed the functionality of that card and eventually became the first non-bank company to have financial transactions over the EFTPOS system. Some of the banks were hesitant, but we got it up”.
“So we always saw this not just as a barter network, but as an alternative finance system for small businesses,” says Sharpe, now 53.
He says having extensive training programs and developing a direct customer relationship with trade coordinators has been another feature of Bartercard’s success – a success measured against the fact that in its early years of operation, the Southport-based company competed with up to 26 other barter systems and exchanges.
Bartercard is easily the largest of a small list of 3 now. Success didn’t happen by accident – over the past 20 years Bartercard has invested $50 million in technological development and more than $150 million in sponsorship and branding, on top of many $ millions and thousands of man-hours on training.
And Sharpe is proud that Bartercard is a true Aussie business, with 22 million transactions to its name over the past two decades. Of the 400 businesses signed in the first year way back in 1991, 63 are still with Bartercard – a huge success given the high attrition rate of small businesses.
Now focusing on the international development of Bartercard, Sharpe remembers the company’s modest beginnings on the Gold Coast. Since then, it has become the first barter exchange in Malaysia, Sri Lanka, Thailand, and the Middle East.
“There were many barter exchanges in the mid to late 90s and now there are three”, says Sharpe. “Some we bought, others failed.”
A franchise model has worked well. When Bartercard started, Wayne thought that franchisees had to be successful and profitable before the core operation could.
“We enabled both the franchisee and Bartercard to be profitable and to benefit mutually from each other’s success,“ says Sharpe. “That way you are going to get top quality franchisees and work together with them to achieve a fabulous outcome.
“We have a commitment/ obligation to train franchisees. Conversely, the franchisee has to have a commitment to being trained.”
Mostly, though, member businesses must see the benefits of being in Australia’s largest barter system, meaning an active trained sales team.
Sharpe remembers that the first couple of years of operation were the most physically difficult: he used to often sleep in the office. The most psychologically challenging was the difficult three years 2006-09 around when Bartercard was listed on the London exchange, known as the AIM, where they had mixed results and raised little capital.
Of the success in terms of members and trading he says “Like any other service business, you have to earn respect and loyalty. But we are still here after two recessions and the GFC, and that’s not a bad achievement.”
Bartercard was founded in 1991 on the Gold Coast, Queensland, and has grown to become the world’s largest barter exchange, with over 110 offices worldwide. Bartercard assists over 55,000 businesses Globally to barter their goods and services without the challenge of a direct one to one swap.
Although the concept of barter is thousands of years old, bartering though Bartercard is an innovative way of combining modern technology, a network of businesses and direct and indirect marketing channels to increase a business customers base, sales and profit, and improve cashflow.
The bottom line is business profits.