Low Down on the Barter Industry

First the statistics:

The fact that the industry is underdeveloped in North America provides a tremendous opportunity for an individual who wants to make a great income and make a difference in their business community.

  • There are in excess of 500,000 corporate trade exchange members globally.
  • Almost 1/3 of all small businesses in the US use some form of bartering.
  • 65% of corporations listed on the NYSE are involved in bartering.
  • Barter accounts for 30% of the world’s total business (U.S. Department of Commerce).
  • 65% of fortune 500 companies engage in barter in one form or another.
  • The Swiss barter industry (a population of 7 million) currently outperforms barter in the entire North American trade sector. (Swiss Barter System WIR)

→ Information provided by The International Reciprocal Trade Association (IRTA) reports, NATE (National Association of Trade Exchanges), WIR, and the U.S. Department of Commerce.

The Real Story

Barter is experiencing a tremendous upswing right now. Cash is tight. The economy is forcing many business owners to look for creative solutions to the complex problems they face on a day to day basis. Even though there are hundreds of barter exchanges in the United States and the world, the collective membership of all of the barter exchanges in the world amounts to less an 1% of the businesses in the world that could benefit from barter.

The barter industry has been relegated to a second place behind cash, especially in the U.S., where we’ve enjoyed fantastic currency exchange rates for decades. Now, with the dollar weakening and the ability to finance operations getting more difficult, barter is poised to enter the mainstream consciousness in a real way, in a way that the industry has never seen before. Barter is about to come of age.

Regulation and Barriers to Entry

The Barter Industry is unregulated, except in the area of taxation. A barter exchange is required to provide 1099-B documented information to the IRS and to exchange members on a yearly basis. Other than that, the industry has been too small to warrant federal regulation.

Entering the barter industry at a local level has very little barriers. Any person on the street can legally create a fiat currency and start marketing it as a barter exchange. The next level up would include a software platform, most of which cost less than $500 to initiate and a small monthly transaction fee, usually less than $500 per month.
To enter the industry at a regional or national level requires capital for outside offices, staff, and facilities. The lion’s share of expenses, however, are directed at paying commissions and salaries. Most barter professionals lack the skills and ability to train and manage a sales staff, let alone a regional or national sales organization.

If you are interested in starting your own barter exchange, click here for more information.