Trade exchanges: the ins and outs

Cutting up money

One of the biggest challenges for any young business is obtaining the right funding it needs to buy in products or obtain services to grow.  

It is for this very reason that many business to business trade exchanges have evolved – enabling organisations to trade goods and services with other members, without the need for a cash outlay. 

There still exists some confusion about how trade exchanges work, who uses them and how businesses reap the benefits so here is a step by step guide which explains how you and your business can benefit.

What are trade exchanges and how do they work? 

Trade exchanges allow businesses to exchange services or products whilst preserving all important cash resources. They operate as a broker and bank in which each participating member has an account that is debited when purchases are made, and credited when sales are made.

So when you sell your product or service to another member you get 'trade pounds' in return. You can then spend these with other members within the trade exchange, rather than being limited to a direct swap.

Most businesses have excess product or services they can sell. For example, a restaurant might not be able to keep the restaurant full all the time so by joining a trade exchange you can attract fellow members, as well as attract their business partners or friends who will bring in cash to the business.

What kind of businesses can join?

Businesses can join from almost every sector. For instance, Bartercard UK has over 4,000 members in the UK offering approximately 10,000 different services. These range from restaurants and recruiters, decorators and DJs, hotels and hairdressers, solicitors, skydivers and vehicle hire to veterinary clinics. It really is that varied. 

Most trade exchanges have an on-line directory that provides members with access to information about other members, so they identify quickly and easily how their trade pounds can be spent.

Are they easy to use?

The advent of the Internet and sophisticated technology has made it easier than ever to trade services and products. With Bartercard for instance, the seller simply

fills out a transaction voucher or swipes the buyer’s Bartercard through a Bartercard-enabled swipe card machine and the buyer then signs the transaction voucher. It’s as easy to conduct as any other type of credit card transaction. Many also have online facilities, allowing members to complete a transaction online for both purchases and sales.

How does the trade exchange benefit?

Normally trade exchanges charge success-based fees; charging a small commission on each trade so, if it doesn’t produce results, costs to its members are negligible.

The advantages

Not only do trade exchanges help businesses to save cash, but they open up previously unavailable paths of new contacts and customers, in turn nurturing new referrals and growing sales within the business. They ultimately keep profit margins healthy – and to be able to do that in a recovering economy, is a real advantage.


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