As recession bites, firms save money by trading goods and services online
By Irene Tham 8 February 2009
Here’s the deal: In exchange for our accounting software, we would like these services - printing, air-conditioner servicing and meals.
That was the message that local accounting software firm A2000 Solutions put out, and by tapping a digital-age version of the age-old practice of cashless bartering, the Singapore firm ‘saved’ $10,000 on the services it needed last year.
And instead of time-consuming and often futile direct barter, the firm used Internet-based barter brokerages to get the deals sewn up.
‘It’s a good arrangement that saved me from stumping up cash,’ said Ms. Margaret Lim, the boss of A2000 Solutions.
Indeed, in these slow-sale and cash-strapped times when retailers are singing the blues, ‘goods’ such as advertising, printing and vacation packages are being actively traded at barter websites.
Singapore’s two major barter exchanges, BarterXchange and Barter Vista, said the last three months of last year saw a flurry of online transactions.
They reckon that in a slowing economy, bartering enables companies to conserve cash by using their products and services - or sunk costs - to ‘swop’ for new purchases.
Six-year-old BarterXchange saw the value of goods swopped in the fourth quarter of last year, estimated at $2.5 million, quadruple from the previous quarter’s.
The most popular items traded were advertising, real estate and vacation packages.
‘With banks tightening their credit facilities, goods and services became an alternative payment,’ said Dr Lee Oi Kum, executive chairman and founder of BarterXchange.
Three-year-old Barter Vista, formerly called Ozone Barter, saw a more modest increase of 30 per cent in the same period. About $500,000 worth of services - chiefly printing, website design and advertising - were traded in the fourth quarter of last year.
‘The credit crunch has become more severe since last October, pushing our members to barter more,’ said Mr. Terry Thng, managing director of Barter Vista.
The two set-ups employ a medium of exchange called barter points or credits, which buyers and sellers use. With each transaction, points are debited against the buyer’s account and credited to the seller’s account.
Each point equals one Singapore dollar or one Malaysian ringgit, depending on where the members are based. Currencies are subject to the same foreign exchange rates as in the real world, and the value of goods reflects their retail value in the real world.
BarterXchange has 300 members here. They are mostly small and medium-sized enterprises (SMEs), including Youcan Foods International, Just Media and Stamford Land, which deals in real estate. The exchange also operates in Malaysia, with another 300 members there.
Barter Vista operates only in Singapore and has 400 members, most of which are SMEs such as Delhi Restaurant and Beauty Reformings, which offers beauty products and services.
BarterXchange is projecting $30 million worth of goods to change hands this year. It foresees that property developers will be among its major clients.
‘Barter is a recession buster,’ said Mr. John Avenell, trade director at BarterXchange, pointing to a recent property supply glut in Malaysia resulting in developers offloading some real estate on its platform.
Its first major deal in real estate took place last month. A member in Singapore ‘bought’ a RM800,000 (S$334,400) residential property in Kuala Lumpur from another member in Malaysia for investment purposes. Payment was made entirely in barter credits.
The International Reciprocal Trade Association, a global promoter of online barter with 90 exchanges on its membership, estimates that the value of goods swopped reaches US$10 billion (S$15 billion) yearly. BarterXchange is a member, but Barter Vista is not.
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Age-old barter trade back in vogue
As recession bites, firms save money by trading goods and services online
By Irene Tham
8 February 2009
Here’s the deal: In exchange for our accounting software, we would like these services - printing, air-conditioner servicing and meals.
That was the message that local accounting software firm A2000 Solutions put out, and by tapping a digital-age version of the age-old practice of cashless bartering, the Singapore firm ‘saved’ $10,000 on the services it needed last year.
And instead of time-consuming and often futile direct barter, the firm used Internet-based barter brokerages to get the deals sewn up.
‘It’s a good arrangement that saved me from stumping up cash,’ said Ms. Margaret Lim, the boss of A2000 Solutions.
Indeed, in these slow-sale and cash-strapped times when retailers are singing the blues, ‘goods’ such as advertising, printing and vacation packages are being actively traded at barter websites.
Singapore’s two major barter exchanges, BarterXchange and Barter Vista, said the last three months of last year saw a flurry of online transactions.
They reckon that in a slowing economy, bartering enables companies to conserve cash by using their products and services - or sunk costs - to ‘swop’ for new purchases.
Six-year-old BarterXchange saw the value of goods swopped in the fourth quarter of last year, estimated at $2.5 million, quadruple from the previous quarter’s.
The most popular items traded were advertising, real estate and vacation packages.
‘With banks tightening their credit facilities, goods and services became an alternative payment,’ said Dr Lee Oi Kum, executive chairman and founder of BarterXchange.
Three-year-old Barter Vista, formerly called Ozone Barter, saw a more modest increase of 30 per cent in the same period. About $500,000 worth of services - chiefly printing, website design and advertising - were traded in the fourth quarter of last year.
‘The credit crunch has become more severe since last October, pushing our members to barter more,’ said Mr. Terry Thng, managing director of Barter Vista.
The two set-ups employ a medium of exchange called barter points or credits, which buyers and sellers use. With each transaction, points are debited against the buyer’s account and credited to the seller’s account.
Each point equals one Singapore dollar or one Malaysian ringgit, depending on where the members are based. Currencies are subject to the same foreign exchange rates as in the real world, and the value of goods reflects their retail value in the real world.
BarterXchange has 300 members here. They are mostly small and medium-sized enterprises (SMEs), including Youcan Foods International, Just Media and Stamford Land, which deals in real estate. The exchange also operates in Malaysia, with another 300 members there.
Barter Vista operates only in Singapore and has 400 members, most of which are SMEs such as Delhi Restaurant and Beauty Reformings, which offers beauty products and services.
BarterXchange is projecting $30 million worth of goods to change hands this year. It foresees that property developers will be among its major clients.
‘Barter is a recession buster,’ said Mr. John Avenell, trade director at BarterXchange, pointing to a recent property supply glut in Malaysia resulting in developers offloading some real estate on its platform.
Its first major deal in real estate took place last month. A member in Singapore ‘bought’ a RM800,000 (S$334,400) residential property in Kuala Lumpur from another member in Malaysia for investment purposes. Payment was made entirely in barter credits.
The International Reciprocal Trade Association, a global promoter of online barter with 90 exchanges on its membership, estimates that the value of goods swopped reaches US$10 billion (S$15 billion) yearly. BarterXchange is a member, but Barter Vista is not.
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