For many small businesses struggling with low demand and slow cash flow in the wake of the a tough economy, an age old idea could drive new business: barter. The 200 plus members of Jambalaya Trade Exchange can conserve cash and expand reach by selling their products and services on its exchange for trade dollars accepted by fellow members, says Tim Bergstresser Executive Director of Jambalaya Trade Exchange (JTEX). JTEX was established in 2012 in Ascension Parish, LA ., and is an independent trade exchange that is a part of the Trade Authority network of trade exchanges. Local exchanges are now in 13 cities through the southeast region of the USA. Trade Authority facilitated over $20 million in business-to-business trades last year and it’s member exchanges have over 3200 members..
Barter is an age old idea, and seems to be catching on with businesses in Ascension Parish. Why?
The idea of barter of trade, hasn’t reached anywhere near critical mass. But it’s really catching on. The main obstacle to organized barter, like JTEX, is a misconception about the word “barter.” People still think about barter like trading a peanut-butter-and-jelly for a salami sandwich at the school lunch table. That’s direct trading.
Barter within an organized exchange network like JTEX, is not a direct trade between two members; that’s all wrong. It’s a system that allows payment for goods or services in trade dollars that can be spent with anyone else in the system, which opens worlds of possibilities. In our simplest form, we are merely a payment-processing system that aggressively sells for member businesses and promotes those businesses to other members.
How does a barter transaction work?
Let’s say we have a member who needs dental work. Using our member directory they can choose a local Dentist, make and appointment and get their work done. Payment is made using their membership card. When processed, trade dollars are immediately transferred from the buyers account to the Dentists account. Pretty simple. The Dentist now can use those new trade dollars with any other member business he(or she) chooses.
What are trade dollars?
Which businesses take advantage of barter?
Has your membership been growing?
There’s no question that we have been getting more attention from the local business community in the past few years. Our membership has grown by about 50 a year in the past 4 years. We continue to seek businesses that fit the trade model.
What are the tax implications of barter transactions?
In 1982, the IRS recognized barter as legal tender and barter exchanges as third-party record keepers, like accountants and banks. The exchanges must report barter income to the IRS on form 1099B. We issue these each year in January.
Have you heard about any unusual trades made by members?
One of our members recently got married. His fiancee (now wife) took on the task of using trade to cover as many wedding expanses as possible. She was very successful and used trade to pay for wedding rings, the venue, catering, her wedding dress , presents, photography and the honeymoon trip. Not bad! I’d to say she is a Ninja Trader!
Check out the JTEX website here.
