Employee Benefits on Barter

Employee benefits represent a major cash cost for most businesses and are rapidly becoming unaffordable for many small businesses. Barter represents an opportunity to cut costs and perhaps even generate cash income for savvy business owners.

It doesn’t matter whether the company has many employees or just a few. There are dental plans, vision plans, chiropractic physicians, health spas, day care, and numerous other employee benefits, such as health club memberships and vacations, that are available in a barter exchange and can be paid for with Trade Dollars.

Providing employees with better benefits purchased using trade dollars can help small businesses attract and keep skilled employees. Another approach is to make benefits available to employees at a reduced cost. For example, an employer might pay for day care at a local center on trade, then offer the service to employees at half price as a payroll deduction.

The employee receives a significant saving on a valuable fringe benefit. The employer reduces its payroll cost, and the expense provides a tax deduction.

Another benefit that can be provided to employees would be a dentist or optometrist. In these cases employers can send an employee to a barter exchange member dentist, then submit the bill to the insurance company for reimbursement in cash, thus converting barter to cash.

Barter Software to Start a Trade Exchange

Following is the abridged version of Barter Software. Click Here to read the complete article.

Today, you have several options for online barter software to manage your barter exchange… Making the best choice not only depends on your specific needs and desires, but also choosing the right business partner to provide and host your software.

You want the software to be bullet proof and hosted at a top tier hosting facility to assure reliability and zero downtime. And, you want to be able to make your own rules and business decision about your barter exchange, rather than being told by your software provider what you can and cannot do.

Here are several considerations to look for and other considerations that should be a warning sign to look elsewhere…

Does the software provide you with a platform where you can control your member’s trading experience and run a world class business to business barter exchange where you, not your software provider or licensor, sets the rules?

Does the software feature a huge marketplace filled with yard sale merchandise, overpriced off brand products, used household items and trade listing offers that often never get shipped, where you are locked in to sharing your members and offers with other exchanges?

Does the software automate your administrative tasks so that one or two people can manage a 300 to 500 member exchange, so you can spend most of your time acquiring new members and generating trade velocity?

Make sure the software is totally intuitive, simple to use, easy to navigate and doesn’t require a college degree in computer technology or you will be spending your time showing members how to use it or actually doing everything for them.

Can the software provider enable you to facilitate large corporate barter transactions without the need to build the infrastructure, when a transaction doesn’t fit into the retail barter model, so that you can earn tens of thousands of dollars at three times the percentage you would earn from a retail barter transaction?

Does the software provider charge a percentage of your revenue because they think that they should be your partner and the more you earn, the more they should get, or do they just charge a monthly subscription fee?

Does the software provider focus their efforts on on running their own barter exchange, and actually designed the software for their own use, but is now licensing it to other exchanges?

Perhaps you are exploring a franchise in a regional or national barter system. They often keep 25% to 40% of your revenues for accounting, collection and administrative services that you can actually do yourself for less than 5%!

Explore all of your options and do your due diligence as many barter exchange owners make the wrong choice and then find themselves with the daunting task of switching software and perhaps, even loosing their members to an unscrupulous software vendor who won’t release their member and transaction data.

Click Here to read the complete article detailing all of the features and functionality you will need when considering Barter Software…

Definition of the Barter Industry

By David Wallach
Excerpt from Barter News Magazine.

Ancient barter was man’s first form of commerce and consisted of the one-to-one direct exchange of goods and services. Advances in technology have greatly expanded and enhanced the scope of barter far beyond this limited one-to-one model.

Today, International Reciprocal Trade Association (IRTA) member barter companies using the “Modern Trade and Barter” process, made it possible for over 400,000 companies worldwide to utilize their excess business capacities and underperforming assets, to earn an estimated $10 billion dollars in previously lost and wasted revenues.

In terms of income, excess business capacity represents the difference between actual cash revenues received, and the cash revenues and profits that would be realized, if a business operated at 100% of its capacity. Most businesses are operating at less than 100% of their potential business capacity.

IRTA member companies can help your business realize lost revenues and make additional profits by making use of your excess business capacity.

Businesses that choose to participate in modern trade and barter should become a client of an IRTA member company. As clients when they sell their goods and services to other clients in the system they earn trade credits, which are deposited into their accounts. They then have the ability to purchase goods and services from other member clients utilizing trade credit in their accounts.

Barter companies play a vital role as they provide organization, system management, record keeping, maintenance of transaction record and broker services to each member client.

It is important to note that there are other forms of modern trade and barter. Some of these include complementary (or local) currency organizations, LETS (Local Exchange Trading Systems) and many other forms of alternative monetary systems to help local and regional economies.

Learn more about the Barter Industry at Barter News Magazine

Barter Exchanges: Grow or Go!

From Bob Meyer, Publisher of Barter News Magazine…

The magic bullet for growth is sales, always has been and always will be…yet the industry’s overall growth is anemic. Why? Maybe it’s because we’re not providing on-going education about our unique way of doing business. Knowledge is always a pre-requisite to taking sustained action.

And for those newcomers, the lifeblood of an exchange, awareness of and understanding about the value of trading is even more important.

If you expect prospects to come aboard and your members to be more active traders, but you are perplexed when the results are less than you desire…there’s a good reason. You must continually educate and motivate every month–month after month after month!

Such action is necessary because, let’s face it, more cash business, not trade, is of paramount importance to your members. You must break through this “cash only” focus and redirect their thinking toward barter. Although most exchanges don’t see the importance of doing so, many industry leaders are taking action and so can you.

As the owner of your own operation, there is an easy and inexpensive solution for moving forward…look into using The Competitive Edge newsletter. It’s a camera-ready, 4-page, professionally written, informational marketing tool…available in PDF format as well as print. So regardless of how you reach your prospects and clients, you will have the necessary vehicle.

Written especially for you, the busy trade exchange owner, I am certain it will be the best investment you ever make.

For more information about The Competitive Edge, and how it can benefit you click here.

Trade Opp: Sonos Whole House Audio

Sonos Promo 120 Bundle

You can now use trade dollars for partial payment of Sonos whole house audio system bundles and components…

The new Sonos Promo 120 Bundle gives you everything you need to wirelessly play music in two rooms of your house. And with SonosNet’s superior wireless range, no room is out of reach.

Consisting of two award-winning ZP120s with built-in amplifiers and a Sonos Controller, the Promo 120 Bundle also comes with a free charging cradle worth $39.99. Just connect each ZonePlayer 120 to speakers in two rooms where you want music. Connect one ZonePlayer or ZoneBridge (sold separately) to your network and all the rest work wirelessly.

For the ultimate in convenience, choose the Sonos Promo 120 Bundle with Loudspeakers and you’ll also have two pair of powerful bookshelf speakers to attach to your ZP120.

To start playing music, just grab the full-color wireless Controller and simply pick a room, pick a song and hit play. With the Controller in hand you’ll have instant access to your entire music collection, plus thousands of Internet radio stations, and the most popular online music services to play all over the house. When you want to play more music in more rooms, just add ZonePlayers and Controllers to your heart’s content.

The Sonos Controller for iPhone™ is a free application that turns your iPhone (or iPod® touch) into a full-fledged Sonos Controller. Plus, it uses the familiar touch-screen interface and fits in your pocket so you can carry it with you all over the house. Best of all, you can download it for free on the App Store in seconds. Just grab your iPhone and simply touch the screen to pick a room, point and flick to pick a song, and then hit play. Grouping zones and searching tracks has never been easier. You can mix and match Controllers for maximum flexibility. Or get started with Sonos using the iPhone you already own and one or more ZonePlayers spread throughout your house.

Click to Request Trade Opportunity Details

Equity Trading

Trading shares of stock is a new trend gaining popularity in the investment and securities arena. Typically companies will sell 144 restricted stock for Trade Dollars which is a form of currency recognized by the IRS. They can then use the Trade Dollars to offset cash marketing costs with trade thus marketing the stock and advertising the company to gain name recognition and market share.

Other cash expenses that can be offset with trade purchases include design of company logos and collateral materials, printing of annual reports, 10Ks and 10Qs, legal services, Internet site design and a host of other services typically needed to launch an IPO or remain compliant.

Pre-IPO companies can also use stock sales to build a Trade Dollar reserve which may be used as assets. Or, Trade Dollars can be used to purchase other hard assets such as real estate. Companies should always do their due diligence by discussing these concepts with their advisor or accountant to determine their feasibility.

An added benefit to companies that sell stock for Trade Dollars is the accrual of new investors who talk about their investment to friends, family and associates who can become potential cash investors thus creating demand for the stock and trading activity.

Since Trade Dollars come from excess capacity or from additional new business and have a low incremental cash cost, many investors can be more aggressive and take chances in investing in new companies. Because trade exchange members can earn Trade Dollars without significantly affecting cash flow, investors can buy speculative stocks and wait for share values to go up. Once the restriction expires, it’s possible to turn trade investments into cash.

Earn Cash While Selling on Trade

Some businesses can also generate cash sales as a by-product of earning Trade Dollars. Hotels and resorts are a good example of this process.

The mortgage, insurance and utilities on a hotel are fixed, whether the hotel is fully occupied or nearly empty. The incremental cost of filling an unused room is minimal. To pay for the extra house cleaning, laundry, and complimentary items such as soaps and shampoos, it costs about $20 per room night.

But just think about how much cash revenue that twenty dollars can generate. The people staying in that room order room service, buy sodas from the machine, magazines and gifts from the gift shop and eat in the restaurant. It’s even more lucrative if it is a resort. When a destination resort offers sports, tours and entertainment, visitors spend a lot of money on peripherals.

The hotel has generated cash it would not have had while producing full value for the room in Trade Dollars. In addition to the new cash flow, the hotel can use the Trade Dollars to offset cash expenses, spend on capital improvements or enhance their advertising campaigns.

Real Estate

Real estate provides excellent opportunities to invest Trade Dollars that will generate cash profits. Real estate isn’t a particularly liquid asset, but real estate becomes more valuable over time and provides an excellent inflation hedge and tax shelter. Since Trade Dollars come from selling surplus or from additional new business and have a low incremental cash cost, many investors find that they can be more aggressive in pursuing investments such as real estate.

Because barter exchange members can earn Trade Dollars without significantly affecting cash flow, investors can buy speculative properties and wait for values to go up. In some cases, it’s even possible to walk away with a pocket full of cash.

Even if the investor is forced to sell at a paper loss, the sale can still represent a cash profit. Here’s how it works. Let’s say a business has an incremental cost of 35 percent in its Trade Dollars.

The business owner buys a piece of property for $100,000 trade, so the cash cost in the property is $35,000. If he sells it for $70,000 cash, he has still doubled his cash investment while reporting a $30,000 loss on his taxes. The IRS doesn’t care whether you pay for the property in cash or Trade Dollars. The reportable loss is still the same.

Investing Trade Dollars in improvements to a hard asset like real estate is another way to generate cash profits on Trade Dollars, since the investment enhances the cash value of the property. For example, a doctor has paid for replastering and painting of a house, had a new sidewalk put in, has renovated a garage, and made other improvements using Trade Dollars. Since the doctor’s cost of a Trade Dollar is only his time, the actual cost of the improvements is negligible.

Even when a contractor isn’t a member of a barter exchange, members are still able to finance improvements with trade. Vacations, vehicles and building materials can be bought with Trade Dollars, which can then be traded to contractors.

Where electricians, remodelers, plumbers or other contractors are barter exchange members, owners can easily upgrade the cash value their property. If the real estate is income producing property like rentals, the improvements can generate immediate cash through rent increases.

Barter Mortgages

You can still buy real estate, including property, homes, condos, even though you don’t have sufficient trade available to pay for it. Trade exchange members purchased a condo in Vermont, 14 building lots in Riverhead, building lots in the Poconos, a 30,000 square foot office building, a 10,000 square foot warehouse and a condo in Pennsylvania. These transactions ranged from $60,000 to over $1 million. Typically, the buyer paid a 20-30% down payment in Trade Dollars. The balance was financed with a barter mortgage, just like in the cash world.

Select Barter Exchanges make mortgages available to qualified buyers of real estate, where the monthly principal and interest is paid in Trade Dollars. You provide your product or service to exchange members and deposit the Trade Dollars into your account. A set amount is deducted from your account each month to cover the mortgage payment. Even better, trade exchange brokers refer the new business you need to make the payments, and online sales can enable you to pay off the property even faster. It’s that simple.

A recent offering was a beautiful house in New Jersey. The owner wasn’t able to sell it in the year it was listed with a realtor. Because he had a need for Trade Dollars, he was willing to take 100% of his equity in the home in Trade Dollars. The asking price was $450,000. The equity of $225,000 was paid in Trade Dollars, the balance of $225,000 was paid by obtaining financing with a bank mortgage.

An example of creative trading would be for the buyer to apply for 60% financing of the $450,000 and get a $270,000 mortgage to purchase the house. The seller only requires $225,000 in cash to pay off his indebtedness, leaving an excess of $45,000 cash that the buyer keeps. The buyer also makes a down payment of 25% of the barter mortgage, $56,250 in trade, leaving a barter mortgage of $168,750. This can be paid in product or service of approximately $4,000/month for five years. The house needs approximately $25,000 in cosmetic interior renovation, most of which can be done on trade.

Bottom line is, the house can be bought for trade and cash, the buyer walks away with $45,000 in cash and lives in or rents the house for five years. The house can then be sold for at least $425,000. Pay off the remaining cash mortgage of approximately $225,000, and walk away with another $200,000 in cash.

If you are interested in creative trading that turns Trade Dollars into cash, joining a barter exchange such may be just the ticket. Then the next time a deal comes along, you’ll be one of the first to know.

Barter Exchange Q&A: Credit Lines & Trade Fees

Q: This question has to do with running an exchange versus what the difference is between the line of credit and a debit to a member acct.

Since an exchange can “create” trade dollars as needed by simply assigning and increasing a line of credit to our exchange, and since those trade dollars have no tax consequences as they are created rather than earned through sale activity, what is the point of charging a member’s account $10 or $15 per month in trade dollars?

We were under the impression that the reason we debit a member account for trade dollars each month is so we have trade dollars available to the exchange for business and personal use, such as advertising for the exchange in a member magazine. But if we simply have the right to create and increase our exchange trade dollar line of credit there appears to be no need to debit the member account other than to create a sense in the member that they need to trade more often since we are debiting their account.

A: One is a credit line where you are using trade dollars that you haven’t earned, which is no different than a business getting a credit line or taking a business loan from a bank to use for business expenses. This credit line (when used) or loan has to eventually be repaid. Charging members a monthly fee in trade becomes trade dollar revenues to the exchange whereby you are earning trade dollars from sales (fees) that you can use to pay for business expenses, such as advertising, office cleaning, computer networking and repair, etc.

Let me correlate this to the US government. The government collects taxes (as an exchange would collect monthly trade fees). They use those taxes to pay for government operating expenses. But, they don’t collect enough taxes because the government spends more than they collect. So, the government is deficit spending, creating a huge deficit in the economy, which a) eventually screws up the economy and b) somehow the deficit needs to get repaid.

Spending a credit line for operational expenses is OK, but only to a certain extent as significant deficit spending will screw up your exchange’s economy. And like any bank loan or credit line, the credit that you extended (even to to yourself) has to be repaid. The only way an exchange has to repay the credit extended to an exchange is to earn trade dollars from monthly trade fees or from profit derived from trade sales.

Most highly successful trade exchanges attempt to maintain a zero or near zero deficit system, meaning the total of all of the positive account balances equal the total of all of the negative account balances, including the exchange’s operating accounts. Exchanges do this by earning as much trade as they need to cover trade dollar expenses.