When businesses begin to feel the pinch during a slow moving economy joining a barter exchange organization, such as top ranked VIATRADE (www.viatradebarter.com) in Toronto , can be an excellent offensive according to many economists. Companies can trade their products and services for others they need, instead of parting with precious cash needed to stay afloat during hard times. Companies are going to need to preserve cash as much as possible to pay for bank loans, leases, credit cards and such. They should absolutely be looking for ways to leave cash in the bank. Trading for things they need is the perfect alternative to writing a check, says Michael Price, President of VIATRADE and a 15 year veteran in the barter industry. The only time VIATRADE is not a good option for a business is when they are at 100% sales capacity and can no longer handle any new business, which is rarely ever the case, says Price.
Sell Excess Inventory or Downtime Instead of Wasting money!
Excess business capacity is common place among companies that are hit by recession. One of the biggest benefits to joining a network like VIATRADE is that companies can make use of excess inventories or down time. Fixed costs are fixed costs, and a business exists whether bartering or not. A company might as well use the resources it’s got and that may not be cash, it may be inventory or staff downtime. A business that sees employees twiddling their thumbs because of lack of work or sales is a business that is paying employees to do so. This breeds a heavy cash flow crunch. Companies need to put that excess capacity or inventory to work for them and trading allows them to do it. When you are a member of an organization such as VIATRADE you can sell products or services and receive the equivalent value back in VIATRADE currency. This currency can be spent with thousands of other businesses. So if your business has the capacity to trade some of your products and services for those that you need, why wouldn’t you? If you needed a new sign for example, is it smarter to pull cash out of the bank or trade your idle assets for it? The first form of commerce was barter and trade, and it’s still a very good option for companies at certain times.
“Companies that are being affected by the lack of credit available in the financial markets are looking for ways to continue to keep their businesses operating without having to take on more debt,” said Stewart Thornhill, executive director for the Pierre L. Morrissette Institute for Entrepreneurship at the University of Western Ontario ‘s Richard Ivey School of business. “The fact that dollars are not exchanging hands doesn’t change the fact that goods and services are being consumed. That’s the reason an economy exists, to allow us to satisfy our needs.”
VIATRADE can help your company in the following ways during recession:
- increase sales, with no additional staffing costs
- help move underutilized inventory/time/space or capacity common in a recession
- sell inventories that may otherwise need to be marked down and sell them at regular prevailing prices
- give you an alternate new source of capital, trade for things, so that you can leave more cash in the bank
- introduce you to many new buyers and increases your market share and local exposure
- gives you word of mouth advertising, members that buy from you tell their friends
- Improve purchasing power with a line of credit payable in products/services rather than cash
How it works:
VIATRADE operates as a third party record keeper of transactions between members and helps market clients to one another creating a mini economy. This allows companies to trade for what they need, rather the trade with one person directly. When a company makes a sale they earn a credit which is then loaded onto a barter credit card. They can then use the card with any of the other vendors, not just the one that bought from them.