Don’t take that financial hit this year! You have alternatives that will not impact your balance sheet or income statement at all. You have the opportunity to take those assets that have been a balance sheet headache and trade or barter them for prepaid assets such as media. There are many corporate barter exchanges that make trades like these every day and it is an absolute win-win for all parties involved.

A perfect and fitting example of such a trade would be a local bank that is carrying many foreclosed properties on its books nearing the requirement to write down one or more of said properties. This bank might take one of those properties and trade it for the current value on the books for a prepaid asset that might be for marketing, advertising, promotional items, building maintenance or many other items with a corporate barter exchange. This transaction would allow the bank to avoid any reduction in their balance sheet and/or bottom line impact in income. This example uses a bank as the business and foreclosed property as the medium of exchange. Other mediums of exchange such as excess inventory, aged inventory, prior year’s products, products nearing expiration and many other products covering numerous types of businesses are easily replaced with the above example.

While this example sounds great with no apparent downside, it must be said that spending the prepaid assets will require attention and patience. These prepaid assets are not as liquid as cash and might take more involvement to utilize than cash. Despite these facts, it is hard to argue that these creative financial methods would not have the ability to help many businesses in today’s economy.

“People don’t care how much you know until they know how much you care.” —- Joe O’Malia
Ashby Green
Tradebank of Atlanta

General

Plenty of specialty bartering sites exist, but some of the best allow you to trade anything and everything, from cars to games and clothing. Check out these to give and get just about anything.

1. Freecycle Freecycle allows you to donate items, as well as get stuff for free in your town.
2. Tradeaway Create ads and make offers to swap with others based on actual values for items.
3. Swap@Home Post items you don’t want anymore, get coupons in return, and use the coupons to get items from other members on Swap@Home.
4. SwapAce Swap anything, for anything, with both bartering, free, and money-only trades available on SwapAce.
5. U-Exchange Using U-Exchange, you can “trade anything, pay nothing” in just about any type of trade, including services, home exchanges, and even vehicles.
6. Rehash Trade your clothing, accessories, books, and more on Rehash, where you can join groups, socialize, and perhaps best of all, get new stuff!
7. Craigslist An incredibly popular site for everything from hookups to free baby food, Craigslist also has a very active bartering section where you can trade just about anything for no money at all.
8. Stuff Pal Lend, borrow, and swap stuff with people you already know through Facebook using Stuff Pal.
9. Barter Bucks Banc Traders in the UK can barter any product or service on this online bank.
10. ReUseIt Network Become a part of the ReUseIt Network to find ways to make use of items that would otherwise be discarded.
11. iOffer iOffer’s want ads offers a great place to buy, sell, and trade clothing, movies, jewelry, and more.
12. Swap-Online Swap-Online is a great venue to do a swap meet online, trading items for other things people are looking for.
13. BarterQuest Trade goods, services, and real estate on this site that allows you to post and trade absolutely free. Trades include dental work, vintage clothes, services, and more.
14. TradeAttic Dig out some stuff from your attic and use the TradeAttic to buy, list, and trade just about anything for free.
15. Trashbank Trashbank encourages users, “don’t trash it, bank it!” on a site where you can barter, swap, trade, buy, and sell online for free.
16. Junk For You Junk For You believes that one person’s junk is another person’s treasure, and offers a great way to clear out spaces of junk in return for something you can put to use.
17. SwapDen The SwapDen is a 100% free online swap meet where you can even create your own personal wish list to get notified when the items you want are available for swapping.
18. SwapTreasures Give and get stuff for free with no fees, and no hassle on this bartering platform that rewards you with points.
19. Zaarly It’s not exactly a swap site, but Zaarly makes it possible for you to name your price for anything and buy it from your neighbors.
20. WhiteWilly In the spirit of white elephant trades, White Willy allows you to list items and make offers on other peoples’ items, getting a fair trade every time.
21. Listia Get rid of old stuff, and get new stuff for free through Listia, a popular site with more than 2 million trades in their marketplace.
22. Trade Stuff On this simple trading site, you can trade your stuff for other people’s stuff, including video games, antiques, and even boats.
23. Zilok You can rent anything online from businesses and individuals, making it easy to use expensive items just for a short amount of time without spending a fortune.
24. NeighborGoods NeighborGoods allows you to share stuff with your neighbors, like a neighbor who needs to borrow a ladder. You can save money by not having to buy items you only need temporarily, and make friends with your neighbors at the same time.

Media

Books, CDs, movies, video games, and more are on the table at these trading websites.

1. TitleTrader This site offers a great place to swap your stuff, including used books, DVDs, and CDs.
2. Swap a CD Trade used CDs, albums, and more on this exchange site that offers a music club and CD exchange.
3. BookMooch Give books away, and get the books you want through the BookMooch site.
4. Bookins You can easily swap books with other readers on this site that’s lauded for its simplicity, and “more available books than the largest Barnes & Noble.”
5. Swap.com On Swap.com, you can list books, CDs, movies, video games, and more that you want to trade, and you’ll get credit to buy other items in return.
6. Swap a DVD Join this movie club to swap, trade, and exchange DVDs for free, listing your used movies and choosing from thousands of available DVDs.
7. Swap Simple Exchange used textbooks, DVDs, video games, and other hot items on Swap Simple, and put together a wishlist for items you’d like to see available for swapping.
8. GameTZ Game Trading Zone is a community of traders where you can exchange things for other things, especially video games. Even better, this site has been around for more than 10 years with plenty of experienced traders.
9. Paperback Swap Swap paperbacks and more with this free online book swap site, just by listing books you’d like to swap, sending them out, and choosing from millions of available books.
10. Goozex On Goozex, you can play games, trade games and movies, and save money while playing video games.

Clothing

Need to clean out your closet and refresh your wardrobe? Get them both done at the same time by swapping clothes on these sites.

1. Clothing Swap Declutter, find a Clothing Swap event through the website, and have fun while you get pampered as you find awesome new clothes and get rid of your old ones.
2. Dig N’ Swap Swap fashionable clothes by sharing pictures of clothes you don’t want or need anymore, and dig for stuff you really do want on Dig N’ Swap.
3. Swapstyle Shop for clothes and accessories guilt-free on Swapstyle, the world’s original and No. 1 fashion swap site.

Whether you want a place to stay for the night or forever, you can find an absolutely free deal through these bartering sites.

1. Airbnb Rent out your extra space, and find cheap places to stay on Airbnb.
2. SharedEarth Have a family farm that’s just sitting dormant? Bring it back to life and get free farm produce when you share it with a gardener that needs the extra land. Or, if you’re a budding gardener, make use of land that’s just waiting for a fresh crop, totally free.
3. CouchSurfing Offer your couch up to others on CouchSurfing, and you can find a couch to crash on wherever you’d like to go, free.
4. HomeExchange Use HomeExchange to find a place to travel and stay for free anywhere in the world. All you have to do is trade your home (or dorm room) that someone else can use in exchange.
5. Goswap If you’re lucky enough to own a home in college, you can swap it out for a new one anywhere in the world, provided you can find the right buddy to trade with. Check out Goswap to find out what’s available for a permanent house swap.

Services

If you’ve got a skill you can trade, and need some help in return, you can turn your services into free help for the things you can’t do.

1. Care to Trade Trade what you want for what you’ve got by swapping items, bartering services, and even real estate.
2. Skills 2 Barter Trade skills and swap services in a cashless economy on Skills 2 Barter.
3. Trade School Can’t pay for tuition? At Trade School, that’s not a problem. You can actually barter for instruction at this NYC institution.
4. Badabud Badabud takes the bartering idea one step further and adds a social network for creative people and experts to not just barter, but collaborate, trade, and get rewarded.
5. Trade a Favor Find out about a life outside of using cash, trading with friends and others in your network for goods, services, and more, even taking advantage of assisted negotiations if needed.
6. BabysitterExchange Most students probably don’t have a need for babysitters, but if you’re a student with kids, this site is amazingly valuable, offering a way to trade babysitting and other tasks within your community.
7. FavorPals Need a favor? Have a favor to offer? Swap favors and services with others using the FavorPals site.
8. BizXchange If you’ve got a dorm room business, use the BizXchange site to grow and get value from your spare capacity and downtime.

Jasmine Hall

Off we go to test it out.

Right off the bat my BS meter is going off. It’s a new site. At the top it says there has been almost 5M large in savings…so either that number is BS or the site isn’t new. You decide.

The Free registration button at the top right is inconspicuous which to me isn’t a great thing. The registration form is pretty standard with some check boxes for further contacting, which I like. I prefer to be able to choose whether to subscribe or not, so they get extra points for this.

Then I see a link that says you have to go to a different page to complete the registration, but also a Save button…hmmm…go to the page and it has shipping information and no link back to the previous page…not good. I hit the back button and I’m back on the other page, but this time I’m hitting Save.

Apparently the site owner does not anticipate users from the United States to use the site, because the site wouldn’t let me use my US zip code.

So, I can’t tell you anything more than that. I’m not allowed to register. Sorry.

No grade, can’t complete the review. To their credit they do have some cool stuff on the site, but the lack of support for US users kinda stops me from finding out more. If you live in Canada, check it out and maybe you’ll have better luck than I have had.

More than anything the site has the feel and look of a blog. I wouldn’t be surprised if the site was built on an open source software like WordPress.

After posting my ad, I was taken directly to a list of what is available for trade, which in my world gets an A. Any time one of these sites not only makes it easy to find stuff to trade for, but then does that automatically, we’re in business. The detail pages are a little clunky and boring, but they work.

OOPS! Then I see on the details that there is no way for me to bid or buy?! How is this supposed to work then? Am I to email the person directly and set something up? Poor design boys!

When I’m testing a software, if I hit a road block like this…man…I’m done. So b2betrader.com…you get a C-. You got everything right, if not good looking, until I couldn’t make an order. Better luck next time.

First, don’t make a video with one of your part cash customers. Your other clients find out you allow part cash transactions and everyone will want to follow suit. It’s just bad for business.

Second, make the video a little more interesting. They’re boring.

Check it out for yourself.

The home page design is pretty enough, though I just don’t know what a white elephant has to do with barter, unless it’s some low-level dig at a white elephant party or something. And why Willy? Anyway, let’s get on with it.

The how it works section says you can sign up for no cost and they give you money to use on the site. Strike one for me. If you have to bribe people to use your site like that then there might not be value, and if you are giving your money away for free, there really isn’t any value.

The sign up process was smooth enough. Create your account, sign up, with an email confirmation.

One thing they got right is the list of things available. The list is laid out well, and when you click for details on any given item, it comes up in a nice lightbox instead of navigating away from the page.

Unfortunately, this is where the good feelings left my heart.

I found something cool, something I wanted (a 3030 rifle), and hit the button that says Express Interest. My assumption is that by expressing interest I would be able to send a message or something, but instead I’m taken to a screen called Make an Offer. Whoa there buddy! I wasn’t ready to commit just yet, and the text of the new page says that this will be a legally binding contract. A little early in the process for me to get that committed to the product, whatever it is, you know?

So then I think, I ought to add some items, so I click the Add Items link at the top. Instead of being taken to a form where I can actually add items to trade, I am taken to my Profile….

What?

I wanted to add something…

So I clicked again.

Profile again.

At this point I gave up. If it wants me to buy stuff but won’t let me put stuff up for trade, I’m done.

The site obviously has some beta bugs. And since it is in beta, we’ll be kind and say that they have a good start and that there needs to be some fixes before we feel confident sending people their way.

I give the site a C-. The UI is ok. The look and feel saves the site from getting a D. Sorry guys.

Overcoming Deficits in the Barter Industry

by Jim West

In the last thirty years that I have been in and around the commercial barter industry, a common problem among trade exchange owners has been the existence of a deficit in their exchange. By definition, a deficit happens when the liabilities of a trade exchange (positive trade dollar balances) exceed the assets (inventory or negative trade dollar balances).
When a barter exchange opens its doors for the first time, the operator’s challenge is to begin signing members. Since revenue for the exchange is derived from the movement of trade dollars, the motivation is to get as many trade dollars on the street as quickly as possible. Where do these new members get trade dollars to spend? The only two methods that are considered fiscally sound are to either acquire hard goods into inventory and issue trade currency when you “put gold into Ft. Knox”, or grant lines of credit. Since most exchange operators find that managing a warehouse of inventory can be costly and unprofitable, the most accepted way of capitalizing a trade exchange is by granting credit lines. This is commonly known as a zero-debit accounting system.

In reality, a barter exchange is nothing more than a mini pseudo-bank, the difference being that it does not accept cash as deposits nor is it regulated by the Federal Reserve. With that in mind, the balance sheet of a barter exchange should be managed much like a bank’s balance sheet. The members deposit goods and services in lieu of cash and receive a credit in their account. That credit becomes a liability to the “bank” and the member/depositor becomes in essence a creditor of the exchange. When a line of credit is granted to a member, they become a debtor to the exchange and their debt is an asset/receivable which offsets the positive balance liabilities/payables. In a zero-debit accounting system, the balance sheet should actually balance. If the operator is making a profit there should actually be a net worth, whereby the assets have been managed in such a way that they exceed the liabilities. Should an exchange operator ever decide to go out of business or retire, in theory all positive and negative balances should be able to net out against each other leaving a zero balance in all accounts.

Because barter exchanges are not regulated by any banking authority, there always exists the opportunity for abuse. Far too often, the barter industry attracts unscrupulous operators who view owning a barter exchange as a license to steal because they can actually get away with printing money. In contrast, I have found that some exchange operators are actually ignorant of how their own company is supposed to work and don’t have a clue what a deficit is or how it came to be. This second group is who this article is written for since we can assume that the first group already knows what they are doing.

The problem

How does a trade exchange get into a deficit position? This usually occurs when the operator loses control of trade spending and begins issuing trade dollars at will for whatever business expense comes along, for payroll, for new membership incentives, or for their own personal spending. Their rationale is usually that they are earning trade every month in the form of some kind of monthly accounting fee and it will eventually balance out. What they don’t realize is that they are actually printing money and spending more than they earn. Over time, this reckless practice can snowball until the resulting deficit is so large that it is out of control. On a larger scale, our own federal government is a good example of what happens when deficit spending runs rampant.

Another cause for a deficit is mismanagement. This usually runs alongside deficit spending but it can sometimes occur on its own. Not having a reserve account for bad debt can result in a deficit. When a member goes out of business with a negative balance, the exchange can end up with a loss. Write downs on obsolete or inflated inventory can also result in losses.

Were the members (depositors) to get wind of the existence of a large deficit in their barter exchange, what could result would be similar to a run on the bank and the ensuing chaos that usually results when a real bank defaults on its obligations. Trading could come to a standstill and even worse, a group of “creditors” could get together and force an exchange into bankruptcy if there were enough discontented members. What many exchange operators with deficits don’t realize is that if they were a real bank, the regulators would have shut their doors long ago, and worse yet, they would be behind bars.

The solution

The first action that must be taken to reverse the deficit process is one of acknowledgment. The operator must come to grips with what has occurred, how the problem developed and what behavior needs to be changed to prevent it from continuing. Once an assessment of the problem has been made, the extent of the deficit and a true balance sheet created, a solution can then be implemented.

The traditional method for erasing a deficit has been to pump new product into the system, which when purchased at wholesale by the operator could earn back trade dollars with a retail markup. This requires a cash commitment on the part of the operator to acquire salable hard goods and could also compound the problem further if new trade dollars are issued to acquire products in bulk on trade. This process can be time consuming and many operators who have already made a mess of things are usually not equipped to ramp up a merchandising division like this and make a profit. Also, the result of earning back trade dollars and erasing them from the balance sheet can be a huge reduction in the amount of currency in circulation and therefore an impact on trade volume and fees. While in theory this could work, it is not the method that I would pursue.

The first problem that must be addressed is the level of trade spending going forward. Here’s where a simple budget is needed. If the monthly trade income is not sufficient to cover the monthly trade expense, some adjustments are needed. Trade compensation to employees, operating expenses paid in trade, and an allowance for discretionary trade
purchases must be covered by trade income. If trade income from monthly accounting fees is not sufficient to cover these expenses, either the expenses must be reduced or trade income must be increased. I recommend a combination of both. Abuses in trade spending must be curtailed and strict guidelines enforced. Treat trade like it was cash just like a member’s negative balance would be if they closed their account. Then, try adding a trade component to the transaction fee schedule by perhaps reducing 1% of the cash fees in exchange for 2.5% in trade or by offering some new value to the member in order to increase the fees by a trade portion. The member will welcome a reduction in the cash fee portion and will appreciate your willingness to accept trade which reaffirms the value of your own trade currency. This new trade income will serve to balance your trade spending budget going forward as well as whittle down the deficit over time. The concern over the potential reduction in cash income can be overcome by a look at the whole principle of Reaganomics that turned our economy around in the 80’s. A reduction in the cash fee component could very well result in higher monthly trade volume as members view the service as being more affordable which further translates into higher monthly fee income.

A bigger impact on the deficit dilemma can also be achieved by taking trade dollars out of circulation and thus reducing the liability exposure. No, I’m not advocating confiscating members’ balances. This method doesn’t really remove the liability from the balance sheet, but it does hold it in suspense accounts with the member’s consent to minimize the potential for a “run on the bank” and the resulting gridlock that may ensue.

There are two industries in particular which provide an intangible product that is paid monthly over time: Media and Real Estate. Most advertising contracts are for periods of time up to a year. Real Estate leases can be for as long as three years or more. Both of these industries have huge excess capacities right now and their product is perishable. And, these types of companies usually employ an accrual accounting system which means that they only want to be paid monthly as the service is rendered instead of in advance. However, because you want to make sure that the advertising member or Lessee member meets their future trade obligation on their advertising contract or Lease, the opportunity exists to have them prepay the entire contract in trade and then deposit those funds into a suspense account from which the monthly obligation would be paid. This accomplishes several things for the exchange. It generates huge trade volumes on the buy side resulting in a spike in cash and trade income, it removes large amounts of trade from circulation into suspense accounts and releases it back into circulation in manageable increments, and it serves to reduce high balance accounts in a hurry which are the worry of many exchange operators.

There will be times when a member wants to advertise or lease real estate without the trade funds to fully do so. That is fine. Here’s an opportunity to grant a line of credit and start backing up the exchange’s liabilities with like-kind assets. Just make sure that you do proper due diligence on your member/debtor and end up with a well secured receivable. You can also attract new members easily when you have the right kind of media and real estate to offer. Granting credit lines to new members that must be paid back with new business creates new activity among existing members, also generating an increased level of cash and trade fees.

What kind of media and real estate is ideal? Depending on the size of your exchange’s deficit, go after media which requires a sizeable monthly commitment. While we believe outdoor is the most effective, it is also the most costly even though it is also the most economical in cost per prospect reached. Find real estate firms that own and operate shopping centers and office buildings. All you have to do these days is drive around and notice all the vacant spaces. A retail or office lease directly offsets a member’s monthly cash expense so it would be in great demand. The real estate company needs incremental trade income to offset their monthly maintenance costs because they are hurting for cash flow. When you consider the big picture, this is a win-win for all concerned.

Back to a Balanced System

With these processes in place, you are on your way back to a balanced economy within your exchange. It’s important to always think of yourself as a bank and more importantly, as a banker. Be ever aware of your liabilities to your members. They have entrusted to you thousands or maybe even millions of dollars in assets to manage and you have a fiduciary obligation to do so responsibly. As you progress towards fiscal soundness, be thinking of ways to demonstrate to your members the commitment you have made towards a balanced system. Who knows, you may someday be proud enough to actually publish your balance sheet for your members’ review, much like a bank does. There’s nothing like accountability!

Jim West is a veteran of the barter industry and currently serves as Corporate Barter Director at Olympus Media, LLC. You may contact him at jwest@olympusmediallc.com or 678-514-5514.

Allow me to wax personal for a few minutes. Rarely do I take joy in the demise of any business or person. This week I’m taking exception. My long-time nemesis, Tradia, is finally gone. I have to say, I’m pretty stoked. I realize also that none of what I could say about the situation would be kind. So I’ll refrain. It’s enough to say Tradia will now be buried with the likes of all of the other ashes of former exchanges whose policy of piracy leads directly to their demise.

Let this be a lesson to us all: taking advantage of members and employees by spending large credit lines and doing bad deals is what will kill your exchange and gives the industry a bad name.