Bartercard PLC

Barter is the exchange of goods and services without the need for cash. However, direct barter or contra as it is sometimes known suffers from a lack of flexibility. For example, the goods to be traded between two parties are not always of equal value, and a trader does not necessarily want to trade for the particular goods that another trader wants to exchange. Organized barter, via a trade exchange, overcomes the problems and restrictions of simple barter or contra arrangements.

Acting as a clearinghouse, the Bartercard Trade Exchange offers flexibility, in that a trader can trade with any other Member without the need for a direct exchange. Bartercard provides an accounting and administrative facility which monitors the debits and credits of all Members, using a “Trade Dollar”, that serves as a medium of exchange, recording the value of transactions between buyers and sellers within the Trade Exchange.

Bartercard operates as a service to its members who are mostly small and medium-sized businesses and range up to multinationals, who pay initial subscription fees, monthly administration fees and commissions on all transactions conducted through the exchange. Bartercard functions as a market maker, a clearing house and a third party record keeper for participants. Bartercard’s business model is also based upon licensing and franchising. Each country’s exchange operates under a master license granted by Bartercard for which the licensee usually pays a large up-front fee and ongoing transaction and sales fees.

Bartercard has a card holder base of over 70,000 members worldwide which makes it the largest Trade Exchange of its type in the world, with turnover exceeding $A1.2 billion last year. In addition, Members have opportunities to trade with over 100,000 international businesses that are Members of other trade exchanges worldwide through Bartercard’s reciprocal arrangements with the International Reciprocal Trade Association (IRTA).

The Benefits for Members:

A summary of the benefits that businesses who are Members of Bartercard Trade Exchange typically derive include:

· Increased sales, ability to generate higher profits;
· Improved cash-flows by reducing the need for cash;
· An increase in the size and diversity of their customer base;
· Access to new markets;
· Interest free credit lines, reducing the cost of funding working capital;
· Accelerated accounts receivable;
· Ability to market to a captive audience in the form of the Trade Exchange Membership;
· Increased ability to manage and balance fluctuations in production and overtime;
· Additional resources via a network of Bartercard employees actively interested in building a Member’s sales and helping to maximise the value available on barter
· Realised value for under-utilised assets;
· Access to cash savings through the use of Trade Dollars to meet business expenses.

CASE STUDIES
1. A shoe retailer pays T$210,000 for an investment property with Bartercard Trade Dollars, rather than cash. In other words, he paid with shoes.
2. A pasta wholesaler, having expanded throughout Australia, decides to venture into New Zealand. Without ever having visited the country, or spending a dollar on advertising, he generates additional business, using trading services in his Bartercard Brokerage and Bartercard International.
3. A Queensland artist/sculptor obtains two wholesale Member contract accounts in Melbourne via Bartercard and subsequently receives another three CASH contracts by word of mouth.

EXAMPLE
A restaurant wishes to ”Barter” for $10,000 worth of printing using meals and drinks. No printer would ever want $10,000 in meals, however, by selecting a Bartercard printer, the restaurateur pays with T$10,000 TRADE DOLLARS. The printers account is “credited” and the restaurateurs account “debited”, so the restaurant now owes T$10,000 in meals to the Bartercard network, NOT the printer. This is repaid as various Bartercard Members come to the restaurant (new business) over the following months. Hence, the restaurant has paid for its printing requirements with meals, using an interest- free “line of credit” and at a cost of approximately 30 – 40 cents in the dollar, in replacement product cost.The printer can now use the Trade Dollars earned to buy office furniture, advertising, car repairs, stationery, courier services, colour separations, accounting and legal services ~ even a family holiday. These are all commodities for which the printer would normally pay cash. By using his Bartercard Trade Dollars, the printer conserves his cash and benefits from the extra business.The bottom line; more profit in both businesses ~ a WIN/WIN scenario for everyone concerned.

How a Bartercard Transaction Works

A Bartercard transaction is effected in a manner similar to a credit card transaction. Once a customer has indicated that they are a Bartercard Member, the merchant simply completes a transaction voucher (which the customer must sign) or obtains a verbal, automated or electronic authorisation.

The transaction is confirmed by posting the transaction voucher to Bartercard’s head office in either country for processing or by swiping the customer’s Bartercard card through a Bartercard enabled Electronic Swipe Terminal, where available. Bartercard enabled Electronic Swipe Terminals are widely available in United Kingdom, Australia and New Zealand and shortly in Jordan and Lebanon. Online transactions are processed immediately.

Members receive electronic or manual (over the telephone) authorisation 24 hours-a-day. Members hold either a white, green, gold or platinum Bartercard card which have differing authorisation requirements.

Bartercard’s Profile is Changing

Bartercard has developed a considerable corporate profile highlighted by it’s being including in the 2001 Business Review Weekly Fast 100, which recognises the fastest growing 100 private companies in Australia. The Business Review Weekly is Australia’s most prestigious business magazine.

In 2001, Bartercard won the Franchise Council of Australia’s award for the best franchise system that was subsequently taken internationally. Also in 2002 Bartercard was awarded Best Franchise System (Entry Capital $50,000 – $200,000) and Best Franchise Export System as judged by the Franchise Council of Australia.

In 2002, Bartercard was announced the winner of the sponsorship ‘strategy’ category in Australia’s most prestigious sponsorship awards as judged by the Australian Sponsorship and Marketing Association and the Public Relations Institute of Australia.

Bartercard has vigorously pursued its strategic goal of international expansion, and is represented in 17 different countries including Australia, United Kingdom, New Zealand, Hong Kong, USA, Lebanon, Thailand, Jordan, United Arab Emirates (UAE), Malaysia, Egypt, Sri Lanka, Kuwait, Russia, Turkey, Cyprus and Qatar.