Barter News Weekly

In an effort to inform those that would want to enter the barter industry as a career, I’ve chosen to write this piece about the different pathways that a person can take to break in to barter. Some professionals, like myself, may have used a multi-faceted approach to the industry, which isn’t a bad idea. Below we are going to explore the different ways that the major players handle offices, franchises, employees, and expansion.

The Path of the Employee

My first experience in the industry was as a manager of a small exchange, less that 400 members, which disappeared in 2003. I was hired on in sales in 2000, and within three months was promoted to manage the exchange. Barter was just one part of the equation at that company, with two other operations that promoted business networking and education. I fell in love with barter at that company, though my pay was downright criminal. I received $150 for a $395 sign up and no share of the volume I or my trade directors created. Admittedly, this is not the industry norm, just one of the flaws that company had.

As a new employee you can expect to receive between 30% and 100% of what the company charges on a new account and between 15% and 70% of cash collected on your clients. Depending on how the company’s fees are structured, you could be making more on the initial sale than on the brokering of transactions, so be conscious about who you are doing business with and what the nature of your work is going to be.

Companies like International Monetary Systems, one of the two publicly traded barter exchanges in the United States, or BizXchange do not sell franchises, but every person that represents the company is a corporate employee who has been trained by the corporate staff before working in the field.

Before signing a contract, find out how the company trains their employees, how much time and effort they give to new hires, and how they handle non-compete agreements. Many exchanges spend only a day or two with their new hires and then it is up to them to sink or swim. You’ll need more than just a day to have enough understanding to make barter work as a career.

Also, you can expect that the company will want to exchange their training and employment for an agreement for you not to compete with them. Having been an employer, this is a reasonable request, but there are a couple of caveats: find out what you are going to get in exchange for the agreement, and find out what is generally enforceable in your state. In most states, non-compete agreements between employer and employee are considered “right to work”, which means that you can compete with them in a reasonable time frame (about a year) or if it is the only thing you are qualified to do. You may want to consult with an employment attorney before signing an agreement with an exchange so you know and are clear about what you are getting in to. Plus, you want to make sure that the company is going to give you enough training and support to make signing that non-compete worth your time.

The Path of the Franchisee

ITEX, Bartercard, Tradebank, and Tradia all sell franchises of their systems to individuals or groups that want to start a barter exchange. According to the ITEX website, they offer, ”

“I bought two franchises for $45,000 each. Matt (Matthew Humphreys, CEO of Tradia) promised to come down personally and train myself and my employees, but never did. We operated for months and months without any real training or support, other than the operations manual they sent us. After some time in operation, they started being very hostile and making it very difficult for us to do business. I closed my franchises and took a tremendous financial loss.”

Lastly, make sure you have the stamina and the guts to take this path or the path of the independent. It takes real guts and hours of work and toil to start a business from scratch. And barter is even a little more difficult than most other businesses, because what you are selling is a strange concept at best.

The Path of the Independent

If you don’t want a corporate office telling you what to do or a franchisor to help you get started and provide a team for you, then the path of the independent may be the one for you. Essentially, you create a barter exchange from scratch, everything from the systems and operations to sales manuals and transaction fees. The easier way to handle this is to rent a software package from either Barter 21, Virtual Barter, doBarter, or XO Limited. Each system has its strengths and weaknesses. Pick the one that is easy to use, has flexible options, and allows for the most communication with your members.

Some independents get stuck at the point of startup and need some help getting off the ground. To our knowledge there are three organizations that provide training to new or aspiring barter exchanges: BarterExchangeTrainers.com, BarterTrainer.com, and BarterCoach.net. All three provide sales training, weekend boot camp seminars, and other services to new members. Be sure, before hiring any of them, to ask for credentials, core philosophies, and referrals from past clients so you can better gauge which will align with your idea of business and provide the best bang for your buck.

Success is out there, somewhere

The barter industry is poised for tremendous growth. It needs professionals with grit and determination to take it to a more public and proper level, so if you are a business person who loves a challenge and enjoys long term relationships with clients, the barter industry may be for you.