Barter Now A Multi-Million Dollar Business
Barter Now A Multi-Million Dollar Business
Many Kiwi businesses now looking at options to a strictly cash economy
New Zealand’s slowing economy is forcing many businesses to look seriously at alternatives to the cash dollar – and many are now taking a keener interest in what options are open to them.
Barter has been around in its various forms for centuries, but it is now a national –and international –business phenonomen.
In the last financial year, in New Zealand alone, Bartercard New Zealand Ltd turned over the cash equivalent of $185 million in barter deals involving 5500 businesses from one end of the country to the other.
By comparison, that figure spiralled to just over $675 million in Australia, and an estimated $1.2 billion internationally, over the same period. Bartercard operates in 14 countries – Australia, Egypt, Hong Kong, Jordan, Kuwait, Lebanon, Thailand, the United Kingdom, Malaysia, Russia, Sri Lanka, Cyprus, the United Arab Emirates and New Zealand.
That, naturally, delights Bartercard New Zealand Ltd’s Chief Operating Officer, 32-year-old former Wall Street trader and expat Canadian, Michael Parsons.
He says the multi-million dollar volume of Bartercard business shows the Barter Trade Dollar can be an extremely valuable business tool, probably more so as the brakes are being applied to the country’s economy.
It is in that environment that Bartercard NZ Ltd sees major opportunities in changing attitudes to how we do business in 2006.
“Most businesses do a bit of contra here and there,” Michael Parsons says.
“The advantage of using Trade Dollars is whenever there’s an imbalance in contra demand between two businesses, the transaction is still able to take place.
“As the economy slows, businesses will have more downtime, more excess stock, and owners and managers will find it harder to generate the same amount of revenue in a strictly Cash environment.
“What we bring to the table with the Bartercard Trade Dollar concept is a very powerful marketing tool which can bring you critically important new business, even in an economy that’s slowing down.”
However, Mr Parsons says many businesses do not understand the Bartercard Trade Exchange and its benefits, because most businesses are focused on traditional methods of generating profits, and saving cash.
“Most businesses are concentrating on what they have to do day-to-day in order to keep their operation functioning. They’ve all got their nose to the grindstone, and many don’t have the time to consider alternative ways of generating revenue.
“That’s a major hurdle for us. The Bartercard system is flexible and works for anyone, but it also takes time to explain.
“It’s not like, for instance, holding up a pen in front of someone, and explaining: ‘okay, if you need to write, here’s something to write with.’
“Our concept can’t be easily explained in five minutes. We need the time to sit down and talk to businesses, to help them understand how Bartercard can work best within their business.
“Getting that time from people who are very busy is one of the biggest challenges we face.”
The current New Zealand ice-hockey representative adds, with remarkable
candour:"Bartercard has a profile in New Zealand, due to our association with rugby league (they sponsor the national Bartercard Cup competition) but I’d hesitate to say that many people know what Bartercard actually does, unless they know someone who works at Bartercard, or a Bartercard member.
“Part of our marketing strategy is to change that. More business people are realising a structured barter system is a profitable and valuable option.
“Trade dollars don’t replace the Cash equivalent. What they do is allow businesses an alternative revenue source that they haven’t tapped in to before.”
The wide variety of Barter business –internationally, nationally, and regionally – has surprised many in the business sector.
As an example, significant Trade Dollar transactions have taken place in property exchanges within New Zealand, as Kiwi Baby Boomers plan for their retirement.
Since the launch of Bartercard property in July 2003, the organisation’s New Zealand members have transacted over $50 million in property sales, with over $15 million of that figure being paid in Bartercard Trade Dollars.
There are currently 79 properties listed on the www.bartercardproperty.co.nz, website.
Overseas travel is another business area where the Bartercard Trade Dollar concept funds either part, or the whole cost, of holidays abroad.
Bartercard runs its own Travel Desk from Tauranga, and turns over holidays with a Trade Dollar value of over $600,000 a year.
Main destinations are Australia, Rarotonga, Fiji, Thailand, Britain and Hong Kong, although travel options are also available in other overseas countries Bartercard operates in.
Services offered vary from accommodation at boutique B and Bs to five-star international hotels, car and limousine hire, restaurants, bars and entertainment, as well as a host of other leisure activities.
Importing is also an area Bartercard Trade Dollars can be utilised.
In New Zealand, the Bartercard services offered are immensely varied. The Bartercard Business Directory is an excellent source of business services. The latest Directory runs to 540 pages, and includes individual trade listings, as well as display advertising.
Bartercard has been operating in New Zealand for the last 14 years.
Founding director, Kerry Gordon, stepped off the plane from Australia in 1992, carrying ‘Bartercard New Zealand’ in a shoebox of files, and four floppy discs.
The following year, Bartercard New Zealand Ltd was established as an independent franchise.
In 1997, the Australian shareholders purchased the company back, and in 2001, Tony Falkenstein’s Red Eagle Corporation acquired 90 per cent of the New Zealand operation, with the remaining ten per cent being held by Bartercard International.
Mr Falkenstein pioneered the ‘water business’ in New Zealand with Just Water and the Cool Water Company, and also established the Onehunga Business School in Auckland in 2002.
Bartercard New Zealand supports the school, which is a New Zealand first. Its mission is to train and develop high school students – including those from overseas and adults wanting to return to the work-force – in the skills of doing business in the 21st century.
The relationship between the two clearly demonstrates Bartercard’s commitment to promoting entrepreneurship, and the importance of thinking ‘outside the square’ in business.
As the economy slows, more and more people are realising the benefits of Barter, in particular its benefits in generating new business, and seeing it as a valuable business option.