bartering - helping you save your cash
However thousands of businesses are doing exactly that with the help of the original trading system - bartering. Modern technology has turned bartering - or commercial exchange - into a $14 billion a year global industry which is used by more than a million businesses and individuals. Around 600,000 of these are in the USA and they include 70% of the top 500 Fortune companies. However the most established system, WIR, was founded in Switzerland during the last depression in 1934 and has 90,000 members, nearly 20% of all Swiss companies. Bartering can benefit companies which have strong, stock-based balance sheets but weak cash-flow and helps them trade their way out of trouble with other companies to their mutual benefit. Richard Logie and his partner Linda Sim run The Business Exchange (Scotland) Ltd (TBEx) which was established in 1995. It is Scotland's only trade exchange company and has links with the world's largest organisations. Aberdeen & Grampian Chamber of Commerce has been a member since the company was formed and regularly buys furniture and equipment from the exchange earning the necessary credits with the provision of training courses. The Chamber is currently looking seriously at setting up its own dedicated member's exchange with TBEx and is carefully watching the success of a similar project being launched this month by TBEx and the Edinburgh Chamber of Commerce. The exchange enables businesses to use unsold goods, downtime or services to pay for items they need without spending cash. It does not reduce the number of cash paying customers but brings in new customers and new sales. Members can use the income they receive through TBEx from these sales to replace cash spending on goods and services allowing them to take a greater proportion of their cash income as profit. Among the current local members there are accountants, hotels, caterers, car and van hirers, couriers, furnishers and holiday companies. A hotel might, for example, trade £1000 worth of rooms to clients and will receive in return £1000 in trade credits which it can use to purchase what it needs from other pool members. This could be advertising space, furniture, stationery, or the hotel owner may choose to use some of his credits to secure flights and hotels for holiday at home or overseas. The Business Exchange acts as the third party record keeper, providing monthly statements to clients and charging a small enrolment fee and a small commission fee when successful transactions are made. Richard Logie said: "We believe we are ideally placed in this current economic climate to be a real benefit not just to local business but businesses throughout Scotland. That's why we are very excited about our partnership with the Edinburgh Chamber of Commerce and launching its new barter system. "In recent years we have progressed from simply operating a barter system in Scotland to providing expertise, know-how and technology for business networks and communities to run their own local systems under our guidance and governance, round the world. "In these difficult economic times when conserving cash is crucial and the future uncertain our members are definitely smarter by using barter through TBEx - helping them to generate new sales, conserve cash and increase profit." Gordon Prentice, Aberdeen & Grampian Chamber's Business Services Manager said: "The Chamber has been a member of the Business Exchange for many years and we are very interested in setting up a scheme exclusively for members to help keep business local. "We would like to hear the views of members about the idea and will be watching the Edinburgh project very carefully."
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It seems an unlikely proposition at first - winning new sales, attracting customers, and increasing profits all without spending any of the limited cash which many companies have access to today.
