Barter, a system of exchanging goods and services for other goods and services, has been around since 6000 BC or thereabouts. While largely overlooked in these days of formal monetary systems, bartering has outlived countless conflicts, epidemics, Acts of God and, yes, even currencies. In fact, it seems to thrive in uncertain times.
Covid-19 has crippled small businesses worldwide. Statistics remain hard to find, as the crisis is so mercurial. Will there be a second wave of infections? A third? Who can be sure? One can say that the trend data is predominantly negative. Analysts have predicted that >8% of US commercial mortgages will default in the coming months, up from under 0.5% in normal times. Why? Because restaurants, retailers and other small business tenants will be unable to pay their rents. With below average revenues since mid March, it is the rare small, retail business that is not cash constrained. PPP and EIDL loans only go so far.
So, what’s a small businessperson to do?
There is no simple answer to that pressing question, but barter could play a small role in a range of possible solutions. Online networking platforms have long since lessened the primary inefficiency of bartering: Finding someone with whom to trade. Craigslist, Fiverr and other well known sites allow one to sell goods and services, but all require cash or credit card payments. There are alternatives, including:
BizX is a bartering website designed for business to business goods transactions. The site works by allowing a business to buy and sell goods from other member businesses in exchange for a digital currency called “BizX Dollars”.
Barter Network is a business to business barter exchange that was originally designed to help businesses dispose of excess inventories and/or capacity.
BarterQuest allows both individuals and businesses to exchange goods and services.
These are just a few of many online bartering options. They may be worth some study . . . just like the bundle of 1985 Bolivian peso notes in my desk drawer, a souvenir from my days working in the Latin American Division of Bank Boston. During those hyperinflationary times in the heart of the Altiplano, the peso had little value . . . but goods and services did.
Mr. Dragone has spent the past twenty years as an acting/consulting CFO for a number of start-ups in a wide range of industries. Peter’s prior experience is that of a serial entrepreneur, managing various start-up and turnaround projects. He was a co-founder of Keurig.