RICHMOND, VA (WWBT) - In this tough economy, companies are constantly looking for ways to save money. More businesses are turning to bartering for goods and services and growing their business while doing it.
You are probably familiar with the concept of bartering: people trading products or services with each other. But there's an entire industry based on helping companies barter, not just one on one, but within a large group, where they exchange their services using credits they've stored up in a bank.
Nacho Mama's is nacho ordinary business. Owner Raul Cantu has been bartering for his business for ten years. "A lot of times cashflow is tight, so we barter for, let's say, equipment needs, flooring, carpeting for example. We just got carpet done up stairs here at the restaurant."
He pays for these things by giving gift certificates for meals to other businesses that are members of a bartering exchange called BancMarc. Explained BancMarc President Bill Meacham, "What you buy and sell is added or debited to your account. So as we create new sales for you, this creates more money for you to expand your business and save cash when you're out spending money."
BancMarc also sends members emails promoting client services and products, networks with other bartering exchanges to offer more business partners, and offers online yard sales to help companies unload inventory. Some members have even traveled free through bartering. Said Meacham, "We send people on trips to Hawaii, we send people on trips to the Bahamas. Travel is a big industry within ours."
John Rueger has been bartering for his company, West End Machine Welding, for nearly 30 years, offering his company services, "any type of portable welding, machine work, metal fabrication," he says, in exchange for roofing, dry cleaning, and office supplies. Rueger gets a wholesale price and it saves him from paying cash.
Said Rueger, "Take $10,000 out of your cash flow, that's a big difference, that's a sizable job."
Cantu says bartering has saved him about $50,000 over 10 years and brings Nacho Mama's new business. "A lot of my business friends that do bartering through BancMarc, give gift certificates, as an example, to their employees as incentives, so they reach new customers."
Bartering transactions are reported to the IRS. BancMarc says its members pay about 6% commission for trades.