in the news
Time Magazine: Have Hotel, Need Haircut
By William Lee Adams: Monday, November 9th, 2009
When the check arrives at the as advertising firms, electricians, hotels, places an appeal for barter business on
Patpong Thai restaurant in paper suppliers, restaurants, translators Bartercard's online site or through the
Chingford, England, Reg Burrows and even zoos. firm's brokerages — there are currently
usually pays with plastic. But 100 offices around the world to help
Burrows, the owner of an industrial-
Barter, of course, isn't new: firms
connect members. If the hotel is 70% full,
storage-supply firm, doesn't pull out
routinely arrange exchanges on their
the cost of filling an otherwise empty
Visa or American Express. He pulls
own. But cultivating those relationships
room is virtually nothing. Plus, it brings in
out Bartercard.
takes time and presents numerous
customers who may return to the hotel in
hurdles. "Many direct-barter transactions
the future — and spend cash. Hill, who
As a member of the Bartercard trading don't succeed outside of our network
trades roughly $100,000 a year through
network, Burrows receives "trade because businesses have to match one
the service, uses his credit to pay the
pounds" instead of cash whenever his another in timing and interest," says
hotel's $650-a-month flower bill, and
firm, Global Equipment Trading, works for Wayne Sharpe, Bartercard's founder and
recently refurnished eight of the hotel's
fellow Bartercard clients. He can then chief executive. While a restaurant owner
rooms without spending a cent. He's
spend that credit at any of the 75,000 may need $10,000 worth of printing
also purchased jewelry through barter
member businesses around the world, services in the next week, it's unlikely that
and then resold it to hotel guests for a
including Patpong Thai, where he any printshop owner will need the
profit. The system works for personal
frequently entertains clients. So far this $10,000 worth of fish and chips that the
use, too. Hill's wife has spent the hotel's
year, Burrows has exchanged around restaurant can provide in return. "With
barter credits on cosmetic dental work
$410,000 in goods and services, helping our service, the transaction is complete,"
and perms, and the family recently went
to offset expenses and keep cash Sharpe says. "The restaurant owes
on a ski holiday in France on barter
available for other outgoings. "Using $10,000 to the network, not to the
pounds.
barter we've purchased everything from printer."
air-conditioning units, computers and All that trading means more profit for
desks, to lorries, forklifts and security
Bartercard's bank-like system — which
Bartercard. The privately held company
gates," he says. "It's a phenomenal tool
includes monthly statements and an
charges a one-time membership fee —
that can enhance almost any company."
interest-free line of credit — also provides
$1,200 to $2,400, depending on the size
security and accountability that informal
of the business — and a 5.5% cash and
As businesses battle to get through the bartering can't. Members must pass a
1% trade fee on each transaction.
recession, more and more are turning to credit check and sign a contract pledging
Sharpe is confident the firm will continue
third-party-exchange networks like to deliver goods in a timely manner. In
to expand even as the economy
Bartercard. According to the International terms of barter rates, a service that costs
improves. "Companies will need to hire
Reciprocal Trade Association, the $600 is equivalent to 600 trade Dollars;
new staff and restart advertising and
industry trade body, more than 400,000 members constantly police one another,
marketing campaigns which they pulled
businesses transacted $10 billion globally ensuring that their advertised barter rates
during the recession," he says. "Bartering
in 2008 — and officials expect trade match the rates they charge the public.
frees up cash for that." It's a concept he
volume to grow by 15% in 2009.
Bartercard, the world's largest exchange
Members are not obliged to accept
obviously believes in: the firm uses its
network, is leading the charge. So far this
barter clients all the time. "There are
trade credits to pay the rent on its U.K.
year trades through its network are worth
times of the year when our hotel is full
headquarters.
more than $2 billion, up by 20% over
and we know we can generate cash
2008. Founded in Australia in 1991,
payments," says Stephen Hill, the owner
when the country was mired in recession,
of the 24-bedroom Hotel Penzance in
To read the full story please visit
the firm now does business in nine
Cornwall, southwest England. "There are
www.time.com/time/magazine/articl
countries — including New Zealand, Sri
other times when we can't — and that's
e/0,9171,1931665,00.html?artId=193
Lanka, Thailand and the United Arab
when Bartercard comes into its own."
1665?contType=article?chn=world
Emirates — and boasts clients as diverse
Whenever Hill has unfilled rooms, he
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