Ron Whitney | Field | barter-exchange network | executive director

OBVIOUSLY, THE QUALITY of the barter-exchange network is vital; the more diverse the collection of companies, the better the selection of goods and services. “Any barter exchange is limited by the scope and breadth of its immediate membership base,” says Ron Whitney, executive director of the International Reciprocal Trade Association. When an exchange’s membership is diverse, bartering can provide businesses plenty of benefits, many of which are particularly helpful in today’s soft economy. “The two primary benefits are (1) new sales and (2) saving cash,” says Richards of BizXchange. “The two things companies right now are having the most trouble with are generating additional sales and cash-flow problems, and that’s why the demand for our services is increasing so dramatically.”

For Kirchner, not only has bartering allowed her to conserve precious cash, it has also drawn people into her store who otherwise probably would never venture inside. “One of the biggest advantages in barter is that people will come into the store who would not otherwise come in. There’s an overall perception that comfort-shoe stores are for old people with really bad feet who are willing to wear really ugly shoes,” she says. “It gets people into the store who would not respond to ads.” Even better, Kirchner says, once people come inside and see that comfortable shoes don’t have to be hideous, they refer their friends, who then often become valuable cash-paying ¬customers.

For many companies, bartering is also a meaningful way to get some value out of excess capacity. “The engine that drives barter is the unused or excess capacity that any business has,” says Whitney. “In a hotel, a wonderful market is a 92 percent occupancy rate, but, hey, you still have eight percent unused rooms. In a bad economy, it’s 50 percent occupancy, and barter can help in both cases; you can go from 92 percent to 98 percent, and from 50 percent to 60 percent or 70 percent.”

While bartering can certainly help companies preserve cash and survive in a down economy, perhaps the biggest beneficiaries of the increasing interest in it are the barter-exchange companies themselves. “We do well in a good economy, and we do great in a bad economy,” says Field. He says it’s much easier to get people to sign up for bartering during the recession and that the number of transactions has tripled over last year; in fact, he says that last May, ¬NuBarter was processing about 300 transactions per month and that by the end of 2008, the number was up to between 600 and 700. He says that as of fall 2009, NuBarter is making 900 transactions a month and is on pace to reach 1,000.

For his part, Richards doesn’t foresee his company suffering when the economy makes its eventual rebound. “We still provide companies the ability to gain market share and save cash,” he says. “There’s never a time when those two things are not ¬important.”