The Return of the Barter Economy ... Life Online and How to Get What You Want Without Spending a Dime
© 2014 Elena Fawkner
We're hearing a lot these days about the "new economy" and
the "old economy". The "new economy", of course, refers to
the growth of stocks in internet and hi-tech companies while
the "old economy" (some might say "real" economy considering
what's happened to the Nasdaq this week) refers to
traditional, bricks and mortar stocks.
The new economy has brought with it a revolution unlike
anything we have seen before in our lifetime. It has
impacted on every area of our lives from the way we
communicate and shop to the way we work and play.
One would think that, because it's technology-driven, the
internet revolution would have brought with it an
'anonymization' of business and business relationships.
What has actually occurred, though, is an awareness that the
foundation underlying this new medium is only as strong as
the human relationships of which it is comprised.
On closer analysis, of course, this is really not so
surprising. Because we are all, to an extent, 'anonymous'
online (I could be a bearded old man with half my teeth
missing writing this article in my grungy vest for all you
know) there is, naturally enough, a certain hesitation we
all experience before taking a leap of faith and choosing to
do business with someone we meet online. I mean, I'm not
going to give out my credit card number to just ANYONE online
and neither, I'm sure, are you!
But eventually we DO make the decision to do business with
someone online. What is it that tugs us over the line from
hesitation and healthy skepticism to a level of trust
sufficient to convince us it's safe to give the other person
our credit card information or write them a check?
Answer: we invest time with the other person, we communicate
with them, get to know them. Electronically, to be sure, but
there is real communication with a real person on the other
end. At the end of the day, we trust them. It's that simple.
So, the paradox is that because we're all so anonymous we
must enter into relationships with each other to bridge the
trust gap in a way that simply doesn't happen as readily in
the 'real' world. After all, how often do you go to that
sort of trouble when you're passing your credit card over
the counter when you're shopping at the local mall? Why is
the owner of that business, someone you don't know from Adam,
someone you won't even think twice about giving your credit
card information to, when you know much less about them than
the person you're doing business with online?
What are the implications for this relationship-based
business model for your online business? Plenty! Much has
already been written about how to develop trust in the mind
of your prospective customer. What I'd like to look at is a
particular aspect of the model and that's business-to-
business bartering ... a new form of currency in the new
If you're forging relationships with prospective customers,
you're also forging relationships with prospective suppliers
in your role as customer. What if your prospective supplier
wants something your business has to offer? Has it occurred
to you that instead of exchanging cash for each other's
services, and all the tax implications that go along with
that, you could instead exchange services?
And, let's not limit this to just you and that one
individual. What we want is a barter RING, a group of
likeminded individuals who provide an exchange to any member
of the barter group in exchange for something of equal
"value" from any other member in the barter group. This
opens up many more possibilities than a straight 1:1 barter
arrangement. The possibilities are endless!
One way to approach it would be to strike a notional credit
value for every service in the group. Hosting of webpages
might be worth 1 credit per page hosted, for example.
Someone else might throw classified advertising in their
ezine into the barter pot. That might be worth 5 credit
points, for example, depending on the number of subscribers
to the ezine. Someone else might offer web design services
at the rate of 10 credits an hour. Another might offer
webpage optimization services (to tweak pages to rank well
in the search engines) at 10 credits a page. Someone else
might offer coaching/mentoring at 10 credits an hour.
Now, someone is obviously going to have to handle the
administrative side of all of this. You might start out
something like this. Let's say you have a group of people
prepared to barter the following services: webpage hosting,
classified ad space, web design, webpage optimization,
coaching/mentoring, search engine submission and copywriting
Your first task is to 'credit equalize' the above services
so that they are all worth the same value on a per unit
basis. A good starting point might be to take the market
dollar value of these services and convert dollars to
barter credits. Let's say one credit equals $5 of market
value. Your ezine publisher charges $15 for a single
classified ad in her ezine. So for every classified she
runs for a member of the barter ring, she gets three
credits. Your copywriter member may charge $50 for a full
page sales letter. Your copywriter is entitled to ten
credits. And so on.
Next, each barter member would be required to agree to
provide a certain predetermined number of credits worth of
services to other members of the barter ring. You may
decide to set a fixed number of credits per month, for
example. Also, think about things such as whether credits
not taken up in one period can be carried forwarded to the
next or are they forfeited? This has implications for ease
of administration but there will be tradeoffs too. I don't
like the fact that I lose my frequent flyer miles if I don't
take them by a certain arbitrary date. So give some thought
to these sorts of issues.
As administrator, you would obviously need to set up some
sort of a ledger to record and keep track of all of this.
So credit each member's account with the number of credits
they're throwing into the pot. This also represents the
number of credits they're entitled to redeem from other
members. Then it's just a matter of recording deposits and
withdrawals of credits to make sure everyone's getting and
giving their fair share. Playing by the rules, in other
And don't forget your compensation for handling the
administration of your barter ring. This could grow into a
pretty major undertaking once it takes off. Make sure you
receive compensation in the form of additional credits.
That's something else you need to agree with your barter
As you can see, with just a little bit of creativity and
thinking outside of the square, properly run, a barter ring
can be a way to deliver real value to members without anyone
having to spend a dime.
Think about the people you're already dealing with day in,
day out. I'll bet there's half a dozen you can think of
right off the top of your head that would fit well into a
Of course, you would only deal with people you know and
trust (or that people you know and trust, know and trust).
But that's the beauty of this revolution. If you're doing
business in this medium, your very survival is already
dependent upon the quality of your online relationships.
Why not put them to good use for the benefit of all of you?
So, how about it? Anyone want to start a barter ring?
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Elena Fawkner is editor of Home-Based Business Online.
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Friday, 22-Feb-2019 22:37:06 CST