Friday, February 26, 2010
Barter--why money was invented
I saw a story about how Nestle asked some prominent business consultants to come give their ideas about the company—and offered them some sweet “prizes” instead of money.
I also had a plastic surgeon ask me to write web copy in exchange for lasering hair off my face. (I was not hairy enough to justify it.)
Andrew M. Kaikati and Jack G. Kaikati wrote about this in the Jan 25, 2009, WSJ. Well, they wrote about barter, not my hairy face.
An estimated $12 billion in goods and services shuffled back and forth in 2008. Barterers even have a trade association—the International Reciprocal Trade Assn.
Consumers barter with each other—C2C, as it were. They organize into General, Specialty and Niche.
Business to business barter, B2B, can be retail (small cos to other cos via trade exchanges) or corporate (larger cos trading with each other or through a large co exchange).
Exchanges match customers and keep track of transactions. When you barter something, you get a credit you can use with any of the other members, not just the one you bartered with. These exchanges can get spendy--$400 to $800 for membership.
The government will even barter with you. There is a Stocks for Food program, allowing farmers to put up some of their crops to secure govt loans. Then when the loan comes due, they can give the govt the crops if they don’t have money. Then the govt trades the crops to companies that give it back as canned veggies, peanut butter and the like for the food assistance program.
Good grief—let’s go back to money!