What is Barter?
Bartering has been around for thousands of years, beginning when merchants traded goods for goods. Modern retail bartering has brought bartering out of the dark ages and is on the cutting edge of a fast growing alternative to our cash-based economy. Successful business owners are those who stay on the crest of change. Barter may be as old as man, but the men and women of today's barter industry work in a business environment characterized by new systems, new sophistication, and new success. They are a new breed of professionals for the new millennium.
How do I join?
- Join ITEX and open your trade account
- ITEX brings you new business from other members
- You earn trade dollars (known as credits) equal to the cash value of products or services you sell
- You use trade credits earned from new business to buy goods and services from other ITEX members
- You improve your bottom line with increased sales and decreased cash expenses
What are the advantages of trading?
There are several. First, trade produces new business...and allows you to expand your market beyond your cash-paying customers. Secondly, trade conserves cash. Instead of spending your cash to purchase needed goods and services, you can trade your goods and services. Thus, more cash stays in your business for other purposes. Finally, trade puts idle resources to work. for you and your business Excess time, inventory, and capacity are converted into needed goods and services.
How does trade work within ITEX?
Members of our trade association use trade dollars (also known as trade credits) instead of cash, to handle their transactions. If a member trades one thousand dollars worth of products to another member, he will receive one thousand dollars in trade which can be used to purchase anything from our other trading members. Cruises, hotel rooms in most major cities, restaurant meals, advertising, printing, as well as thousands of other products and services can be obtained with trade dollars. ITEX operates like a bank, recording your deposits and charges. As an account holder, you receive a monthly statement detailing your transactions, just like a bank account. As a seller, simply accept an ITEX trade draft (it looks like a check) for the amount of the purchase. Call toll free to to receive an authorization code guaranteeing payment, then fax the trade draft to your broker for posting it to your account. It's that simple to bank your ITEX trade dollars.
What can a barter exchange do form my business?
Increase Sales to New Markets - ITEX members would rather spend trade credits than cash. They will seek you out to do business through ITEX.
Increase the Purchasing Power of Your Business - Your new ITEX clients will add new sales so as to increase your purchasing power.
Put Unused Assets or Production Capacity to Work - An empty seat on a plane or theater, a blank appointment on the schedule of an attorney, doctor, or CPA, Unsold inventory, idle equipment or personnel are all assets you can put to work with ITEX.
Make New Business Contacts - ITEX members are business owners and managers like yourself that will increase your networking power. Referrals increase new cash business and cash flow.
Increase Productivity - By increasing or decreasing your barter business, you can adjust to the ups and downs of the business cycle to keep your business operation at its peak capacity.
Pay Debts or Collect Receivables - Someone may owe you money that they cannot or will not pay you in cash. They may have something else to settle the debt, buy you may not want or need what they have. ITEX can sell what they have and credit your account to settle the debt, making both of you happy.
I already trade on my own. Why join ITEX?
The problem with one-on-one direct trading, is that each business must want what the other has to offer, and for the same amount of money. In ITEX, everyone can trade with anyone, even if the business owner does not want what the other person has and is very similar to a cash checking account.
In the cash world, when you sell you make a deposit into your checking account, and when you buy you write a check which is then deducted from your account, a continuous flow of debits and credits with a fluctuating balance. In ITEX you can sell to one customer and buy from another. In a one on one trade you are limited to what the other trader has to offer, with the biggest problem being an imbalance of ledger credits over a period of time, and each not knowing how to stop it without hurting or offending the other business owner. If one of the other business owners goes out of business, then generally you have lost the trade owed you. With ITEX, ALL SALES ARE GUARANTEED, since once you get an authorization number for the ITEX dollars due you, and regardless of what happens to the company you did business with, your ITEX dollars are yours to keep.
Are there unusual uses of barter I might not have thought of?
Yes! Many clients use trade dollars to pay employee bonuses. Some even pay employees a portion of their regular salaries by using trade dollars. It is also possible to pay some of your bills with trade dollars. We will help your creditors spend their trade dollars. Paying bills with trade credits is just one more creative way to use barter. We pay in trade our office rent in Sunnyvale with ITEX credits.
Are there tax advantages to trading?
Yes, with barter income being new and additional business over and above your normal cash sales for a fiscal or calendar year, the benefits are in the increased revenue from ITEX. As with cash income, trade purchases are business-related and tax deductible, and your personal purchases are treated the same on your books as cash. At the end of your taxable year, ITEX will submit the total of your trade sales to the IRS on form 1099B, with ITEX sending you a copy for your records.
Additionally, ITEX brings you new business and increased revenue. Assuming that your gross taxable income was $100,000 for the taxable year, and you did an additional $10,000 in business in ITEX credits, and factoring in that all of your fixed expenses have been covered, and your cash cost of goods is at 50%, your pre tax profit will be $5,000, assuming that you are in the 30% tax bracket, you will pay ITEX fees $1,500 in cash, leaving you a clear cash profit of $3,500 which you can use to pay against any taxes owed on your original $100,000 in gross income. It is best that you go over this with your accountant or CPA to confirm the integrity of the calculations.
What does it cost to get started?
There is a one-time membership fee to JOIN ITEX with no annual dues. There is a broker fee of 10% on transactions, with 5% being charged on the sale and 5% being charged on the purchase. The ITEX representative will share the positive benefits of the ITEX membership and why the 10% is well earned by your ITEX broker. Basically we are working for you as an outside sales representative with the 10% being our commission. There is an administrative, association fee of $20.00 cash and %10.00 ITEX every 4th Thursday. This covers our expenses related maintaining ITEX account online. Since we only receive a commission when a member sells or buys, if there is no activity with a member in the 4 week period, there is no income generated and ITEX must have a constant and stable income to assure their continued success.
By ITEX maintaining a profitable and successful operation, your ITEX credits are protected for your use. To put the $20.00 dollars into perspective, that works out to 65 cents a day. The real value of ITEX related to the cost will be your success with ITEX and the cash profits with ITEX will make the cost of ITEX membership negligible. The only way one can make the right decision is by experiencing with our 3 month trial membership.