Do you know all of the ways a business can benefit from trading hard goods or services? Read on to see if you do!
New Business and Increased Market Share
Probably the most important reason business owners join a barter exchange is because they want an increase in business. Membership in a barter exchange introduces their products and services to thousands of new customers without requiring outlays of cash for either advertising or sales promotion. The exchange locates new customers and expands sales opportunities to help its members gain a greater market share. Trade business is not a replacement for cash business. In the past, present and the foreseeable future, the base of any business is cash. A barter exchange offers a profitable addition to the cash base of any business—a new source of income, and the equivalent of an extra checkbook.
Increased Buying Power (Barter Leverage)
The new income and the resulting profit margin allow a company to make purchases at its own cash cost of goods. For example: An exchange member goes to a jewelry store to buy a watch for one hundred dollars. He pays one hundred trade credits from his account. The jeweler, however, can replace the watch for fifty dollars. Now the jeweler goes to a printer to buy one hundred dollars worth of printing which, in actuality, only cost him fifty dollars—the price to replace the watch. Although, the jeweler can always buy the jewelry at wholesale, the barter exchange in actuality allows him to buy printing and hundreds of other items at wholesale as well. We refer to this as barter leverage.
Membership in a barter exchange can benefit a business by converting non-liquid assets into needed goods and services. In other words, a needed or desired asset is gained with no cash outlay. A business continuously spends money to cover its expenses. Either the company can continue to spend the cash it has earned to meet its expenses, or it can generate some new customers and thus a new source of income to offset some of those expenses. Then, the cash the business produces can be used to pay taxes, utility bills, replace inventory, or for other expenses where trading is difficult or impossible. For any level of business operation, cash flow is a crucial consideration and requires an even greater degree of analysis and planning during inflationary and recessionary periods. By paying some of its expenses using inventory or excess capacity instead of cash, businesses realize a net gain in their cash-flow reserves.
Most businesses at one time or another, have problems with collections. However, there are no collection problems with sales generated in the IMS barter system. When a seller receives an authorization for any transaction, the payment is guaranteed. It is a simple matter of the exchange software transferring revenue from one account to another. Members need to get an authorization on all sales. An authorization must be obtained by calling the exchange’s 24/7 national authorization phone number, or by processing the transaction online at the IMS website at www.imsbarter.com.
IMS provides a local and national network for moving inventory, including overstocked and slow-moving items. The exchange can open new markets for a business without the additional expense of advertising in different parts of the country. This can result in a positive reduction of inventory finance costs and, in some cases, a reduction in inventory tax expenses.
The IMS barter exchange can put unused production capacity or surplus time to work through increased business. For example, if a plumber has only enough work for six hours a day, he can either go home, or use those extra two hours to generate the income needed to maintain his vehicle or advertise to generate more cash business. If an apartment complex has an empty unit, the investment the owner has made in bricks and mortar produces no return. It makes sense to convert that extra space into income that could pay for carpet cleaning, roofing or lawn care, all of which would otherwise require cash expenditures.
Gross Profit Margins Preserved
Many of the methods used to generate new business require that the company mark down merchandise to put on sale or offer discounts of one kind or another. This is not the case for clients of IMS. All items are offered for sale at fair market value and require no discounting. If sale items are offered on the barter exchange, it is at the seller’s discretion. Sometimes a business will mark items down to get rid of them. At other times, businesses may feel that they can’t afford to trade when they don’t make a sufficient profit. Both opinions are valid.
A member business may spend its trade income with other exchange members offering hundreds of thousands of products and services from which to choose. Furthermore, a business is not limited to just those items that are currently being offered for trade on the exchange. If a member business makes his needs known, the account executive will make an honest effort to fill those needs.
New First Line Products
When selling in the IMS network, standard merchandise is offered with regular warranties and guarantees.
Trade provides a nationwide electronic network for buying and selling. There are programs designed for retail and commercial accounts.