Exchanging goods and services is increasingly popular in a cash-strapped economy.
Exchanging goods and services is increasingly popular in a cash-strapped economy. SmallBusiness.co.uk looks at three companies engaging in the practice.
Bartering has existed since time immemorial, but it can seem an anachronism in these days of split-second money transfers and financial products that are too complicated for even the financiers to understand. Given the struggling economy, however, cashless transactions could be making a comeback.
Gavin White is the founder of seed box supplier Allotinabox, whose products allow customers to grow food at home. He takes part in regular seed swapping events, where seeds may be exchanged for other seeds, or for goods and services such as PR or packaging design. ‘I believe this might escalate and start happening around the country,’ he says, pointing out that the Greek city of Volos has already launched its own alternative currency.
Trade exchange networks
Other bartering systems are more formal, such as that offered by Bartercard, a trade exchange aimed at small and medium-sized businesses and operating in six countries including the UK, Australia and Thailand. The advantage of a system like Bartercard’s is that you don’t need to find a direct match between your needs and those of a second company.
Stella West-Harling, chairman of Dartmoor Food and Drink, describes the Bartercard service as ‘quite like a bank except with its own currency called a trade pound’. You accumulate trade pounds by providing goods and services, then spend them with other businesses in the network.
West-Harling uses her ‘trade pounds’ both to buy equipment and services for her business, and for personal expenditure, such as meals out. One benefit of the service is the ability to claim back trade pounds for services not delivered, she adds, which is covered by an insurance fund that all users pay into.
A different bartering model is used by Miroma, a London-based company founded in 2002 that sells on its clients’ surplus stock to fund media campaigns. Its clients include T-Mobile, which has supplied call minutes, and Honda, which has offered cars.
CEO Marc Boyan explains, ‘People are not selling as much of their product as they would in a buoyant economy. Therefore there’s more product to use as a currency to buy the advertising.’
Whilst bartering is no longer the primary method for all trading, there are certainly obvious advantages to obtaining goods and services that are you need in return for goods and services that you don’t. According to Boyan, ‘The UK market for corporate barter is worth about £250 million’.
See also: A better way of doing business