As a business owner, would you trade your services to a mechanic for car care rather than cash? How about designing a logo in exchange for an accountant managing your books? Or booking a hotel room by painting a house?
Last August, Thom Gates, a 33-year resident of Central Oregon, founded the Deschutes Trade Exchange (DTE), a bartering network that allows business owners to exchange goods and services at full price without actually spending any money. Four months in, he's hoping to expand on the current list of 14 members and become a serious hub of trade.
"The real bread and butter of this is that there are small businesses out there that need something, whether it's office or printing supplies, marketing help, or even a car fixed," Gates said. "They don't have the cash on hand to pay for it."
The Deschutes Trade Exchange will help business owners pay for things they need while leaving cash in their business, Gates said.
THE NUTS AND BOLTS
Here's how it works: A business joins the DTE (currently there is no fee to become a member) and then sells its products and/or services in exchange for so-called trade dollars rather than physical cash.
So, if you sell $500 of products or services to another DTE member, your company receives $500 in trade dollars, which can be spent with any company across the entire bartering network.
Currently, DTE has just 12 members, including Etches and Sketches, a Bend-based graphic design firm owned and operated by Ellisse Dickey.
"I haven't used any of my trade dollars yet because, personally, I'm waiting to see if I can find a mechanic or a dentist," Dickey said. "I'm trying to pass on the word to help and get other local businesses signed up for this thing. It's interesting—bartering and not adding physical money into the equation. I think it will work once people become comfortable with the idea."
The DTE also is connected to the South Bay Trade Alliance and other exchanges, so members can trade with other companies nationally.
Gates said marketing the DTE to prospective members, at this point, is basically a door-to-door endeavor. He makes cold calls. He attends local networking events, like the Bend Chamber of Commerce's "Business After Hours." He talks to business owners face-to-face to let them know the DTE is operating, and how it has the potential to positively impact their bottom line.
WILL IT WORK?
Bend Chamber Executive Director Tim Casey said he was not familiar with the DTE, but he thinks the concept sounds promising and something Central Oregon small businesses could use beneficially.
"In theory, any form of bartering system should be able to help small businesses," he said, "and right now they need all the help they can get."
But Oregon Economic Forum Senior Director Tim Duy isn't keen.
He said people abandoned the idea of bartering thousands of years ago and returning to it now, even during a sluggish economy, doesn't make sense.
"The Central Oregon economy is headed in the right direction, but relative to what people became accustomed to five or six years ago, certainly the pace remains disappointing," Duy said. "Exchanging money for goods and services remains the best method of conducting business—money is far more efficient."
BARTERING BUILDS BUSINESSES
However, bartering as a viable means of conducting business is accepted by many in the business world.
Omni magazine reports more than 240,000 U.S. companies conducted $5.9 billion in barter transactions in 2011, and the Washington Post reports there are 12 or so flourishing bartering exchanges around the U.S.
Andrew Schrage, co-owner of Money Crashers Personal Finance, a website that strives to help people "make financially sound decisions," said there are many benefits to bartering.
"Many small businesses do not have a great deal of cash on hand, and a bartering network solves this problem by allowing a business to get what it needs without significantly affecting cash levels," Schrage said. "It is also a way to market your goods and services to a wider audience."
Ken Meharg, chief executive officer of New England Trade, a bartering exchange in operation since 1980, said his company helped thousands of businesses gain a competitive edge through bartering.
"Worldwide, more than $600 billion is traded annually by small firms and giant companies alike," he said. "Nearly one-third of all U.S. businesses are involved in some kind of barter, and more than 65 percent of the corporations listed on the New York Stock Exchange use barter to reduce surplus inventory and bolster sales."
Gates said right now DTE primarily is focused on Bend and Redmond but that his goal is to attract companies from Madras to La Pine.
"Most people who get into bartering use it a lot," Gates said. "It becomes another opportunity for doing business. I'd hope to see the Deschutes Trade Exchange catch on in Central Oregon and help local businesses grow."
Deschutes Trade Exchange Members
Affordable Upholstery B & G Video Productions Benchtop Transmission
Bill's Painting Diane's Bookkeeping Service
Drawn to Black
Etches to Sketches
German Auto Specialty Jax
How it works
• Visit DeschutesTrade.com
• Sign up to become a member
• Shop for service listings from local companies
• Search the national exchange for offers from companies across the U.S.
• Purchase trade credits to use in exchange for your desired item
• Spend your credits by offering your own services as currency