American Express Cards Briefing
The Phenomenon of Bartering
The number of companies using barter continues to grow at an annual rate of 12%, according to The International Reciprocal Trade Association. These businesses, including many restaurants, use their excess inventory (i.e., restaurant seats) instead of cash to purchase products and services, usually with the help of a broker at a barter association. “Any restaurant with empty seats should consider barter,” explains Joan Varner, Executive VP, Illinois Trade Association, which has 5,500 members. “After all, the majority of costs of doing business – real estate, utilities, staff – are incurred whether seats are filled or not.” According to Bob Meyer, publisher, Barer News, “Barter is a way to get your name out there and bring in new customers. Members of these groups will drive an extra few miles in order to use their barter dollars.”
Richard Wohn, owner, Fireside restaurant, Chicago, IL, has been hooked on barter since he opened his restaurant seven years ago, trading for almost everything from cleaning supplies, paintings, and freezers to fresh fish and employee dental services. “I’ve found that 90% of customers who use barter dollars are owners of their businesses, many of whom have never been here before,” says Richard. He adds that his barter customers have consistently high average checks and dine mainly on Mondays and Tuesdays. Kevin Cody, co-owner, Cody’s Irish Pub and Grill, Essex, VT, likes using barter because it allows him to keep his cash in the bank. Both bathrooms were recently renovated on barter, as was new carpeting and the kitchen manager’s holiday bonus – a skiing trip.
Bob advises to restaurateurs, “Work with a barter association that is in your area so it’s convenient for members to use their barter dollars.” He recommends talking to those already using barter before you sign on – asking what they barter and what’s hard to get. “Do your homework and get bids, just like you would if you’re using cash,” says Richard. “Remember, you’re bartering for excess inventory – what’s available and when it is available may not meet your exact specifications – so you need to be flexible.”
Barter association helps out Michigan Humane Society
When Metro Trading Association President Michael Mercier and Meribar Pet Supplies owner Bob Frazzini reviewed the Michigan Humane Society’s latest wish list, they put their heads together to come up with a generous donation.
Frazzini, a Metro Trading Association member, and Mercier recently delivered several hundred pounds of dry and canned dog and cat food to the Michigan Humane Society on Auburn Road, east of Adams, in Rochester Hills.
“We take pride in supporting the Humane Society,” said Mercier. “Their contribution to the well-being of neglected and homeless pets is immeasurable. We strongly encourage businesses and organizations throughout Southeast Michigan to lend much-needed support.”
In addition to dog and cat food, the MHS wish list includes a Polaroid camera, office supplies, tennis balls, VHS and 8mm video tapes, peanut butter, bound carpet square samples, a first aid kit, and an industrial shop vacuum. For more information, call the Rochester Hills Humane Society at 248-852-7420.
Meribar Pet Supplies is located at 27130 Dequindre in Warren. The Metro Trading Association is headquartered in Troy. It was founded by Mercier in 1978 to give local businesses the opportunity to lower costs, increase cash profits, and obtain clients through the bartering system.
As a member of the North American Barter Group, MTA offers clients over 20,000 businesses throughout the United States as bartering partners. For more information call 1-888-LETS-TRADE.
Barter industry poised to make big expansion
December 5, 2000
By Jill Armentrout
Michael Mercier is president of the Troy-based Metro Trading Association, which he established in 1978. The association is the largest and one of the oldest barter networks in the Midwest, with 2,000 members from southeast Michigan. Members deal in electronic barter called trade dollars, taking advantage of goods and services available in the network in exchange for a future new sale. Mercier describes this kind of barter as a marketing mechanism that can advance growth. His company charges fees for a membership and collects 10 percent of a new sale.
Transactions are recorded and credit extended through a debit card system. Metro Trading is a member of the International Reciprocal Trade Association and the National Association of Trade Exchanges. Mercier has served on both boards.
Q: How has bartering grown in the past 20 years, and where is it going?
Q: How large a network can be?
A: In July, Metro Trading joined BarterNet, an association with more than 70,000 members worldwide. Now, I can move into international trade. We can digest larger inventories, in over 100 cities. BarterNet is planning to go to public in 2001. The barter industry also is uniquely positioned to take advantage of the Internet. The Net is struggling to come up with an international currency; we have been using electronic currency for 20 years. BarterNet is in the process of establishing an Internet trading apparatus.
Q: What kinds of businesses enter into barter and how prices are set?
A: Most businesses are looking for new business. We deliver $10 million a year for clients. The vast majority of Fortune 500 companies barter in corporate bartering, with million dollar inventories. We deal with companies making up to $300 million in sales to those just starting out. We have major sports teams and people who repair shoes and own carwashes.
The first rule of fair trading is to use regular retail prices. We know our prices; they are the same as those in stores. If a member isn’t giving a fair price, we can revoke their memberships. That happens 20 to 30 times a year.
Q: What are the misconceptions about bartering?
A: Barter brings up images of haggling or inconvenience. You may have to drive a few miles to use a member auto shop, but people are going out of their way to get to your business. People also need to know that a barter profit is the same as a cash profit.
Q: Why is barter so important now?
A: We hear that the economy is slowing down. Very few companies do better in softer times. Barter does better in these times because our raw material is in excess inventory and space. This will be a big year for barter.
The Oakland Press – Money & Business
Barterers cash in their chips for holiday
November 5, 1999
By: Karen Talaski
Rochester Hills- R.D. and Joe Ann Hatley are not wasting their cash on Christmas this year.
Instead, the Waterford Township couple are using another form of currency to purchase presents. As members of Metro Trading Association, the owners of Hatley Stump removal trade their services for credit. They estimate they earn – and spend – between $10,000 to $20,000 annually through the barter system.
“And if I can’t (spend it all), the kids can wipe me out like that,” said Joe Ann Hatley, her fingers snapping.
Hundreds of association members met Thursday to do their holiday shopping at the Shotwell Gustafson Pavilion on the Oakland University campus.
The Troy-based Metro Trading Association is the largest barter network in the Midwest. The group has 2,000 members from southeast Michigan, hailing from Clio to Trenton.
“In a barter system we create a currency called trade dollars,” said Pete Cooney, a former association employee who now creates Internet sites.
These dollars are maintained in the association’s database in individual accounts. Each time a member sells a good or services to another member, he or she receives an equal amount of credit from the association. Members, then use their credits toward whatever they need.
Services range from accounting services to massage therapy to zipper repair and replacement.
For example, Cooney might trade his skills at developing Web sites for Detroit Pistons tickets or party-planning services.
“If you need anything, you name it and they’ll find it for you,” said Jenn Cornell, who trades her services as an employee of F&A Communications for things to fill her post-college apartment.
About 600 businesses attended the association’s holiday show. While Christmas carols played overhead, these so-called shoppers picked out presents from sizable displays.
There were auto parts, picture frames, Beanie Babies, diamond bracelets, couches, and end tables. Trade manager Omar Towghi said the association seeks a diverse membership to make bartering as beneficial as possible.
“The whole idea of trade and barter is this is over and above your cash business,” Towghi said.
John Curzydlo has been an association member for eight years. He is the owner of Affordable Flowers in Birmingham and other flower shops in Troy and Royal Oak.
“We trade our services for auto service, equipment maintenance, building repairs, even employee bonuses,” Curzydlo said.
The Hatleys, who began trading in the early 1980, said the association has brought their a larger pool of customers. Those who barter tend to stick together, Joe Ann Hatley remarked.
The Suburban News
Trade association helps Episcopal Center
May 13, 1999
Metro Trading Association recently donated more than $500 in paints and drawing supplies to the Christ Episcopal Center for use in its summer art program. The association also donated use of its suite at the Palace of Auburn Hills for students to watch a Vipers play-off game. Representatives from the Christ Episcopal Church in Flint traveled to Metro Trading Association, headquartered in Troy, to accept the donation. The contribution included art supplies, hospitality supplies, and student incentive gifts. The Christ Episcopal Center serves the Flint area community and focuses on education, literacy, lifelong learning, job readiness, cultural enrichment and personal growth. The center provides a supportive, positive environment for children, parents, grandparents and people from all walks of life. They offer preschool programs, a day camp, computer and reading classes, meals on wheels and midnight basketball sessions.
“Everything I’ve seen and heard about the Christ Episcopal Center has proven to me the work they do there is absolutely invaluable to the Flint community,” said Michael Mercier, president of Metro Trading Association. “I’m proud to have the opportunity to help an organization that does so much to change people’s lives for the better.”
Mercier founded the association in 1978 in order to give an area for their businesses to have an opportunity to lower costs, increase cash profits and attain new clients through the barter system.
Barter system is alive and well
Trading goods and services is a way to network
February 24, 1999
By: Gary Gosselin
One of the oldest practices in human history is alive and well. It has changed with the times, however, to take advantage of modern technology.
The practice, of course, is bartering – the act of trading goods and/or services in return for other goods/services.
“While good things come from competition, great things come from cooperation,” said Michael Mercier, founder of Troy-based Metro Trading Association (MTA).
“Every year more and more Michigan businesses recognize the value of bartering and the unique advantage it provides.”
Mercier said 65 percent of Fortune 500 companies barter to some extent. MTA has been in business for over 21 years and remains the largest barter network in the Midwest with over 2,000 members from Southeast Michigan.
Larry Jakinovich of the Trenton Athletic Club has been bartering since the 1980’s.
“Cash is still king; that supersedes all else,” Jakinovich said. “My Metro Trading membership brings customers in. When you can bring someone through the door, it’s good.”
Jakinovich has used bartering for many services, including advertising, electrical work, carpet cleaning, and plumbing.
One big misconception is that someone will get out of paying taxes if they barter. “Not so, ” said Metro’s Trade Manager, Omar Towghi.
“The process is simple,” Towghi said. “Customers are issued cards, much like credit cards. As they provide goods and services to other members they are credited with monetary amounts in their accounts, which they can use at other member businesses.”
There is a toll-free number for selling members to call to verify whether buyers have enough in their accounts to cover their purchases.
Towghi said “Metro does extend credit to some members, depending on credit history and business stability, or many times according to the length of time as a member.”
Members receive an annual directory, which lists all members by business category; bi-monthly newsletter; monthly direct mail packages and weekly faxlines. All offering persists with an opportunity to members for advertising their services to others within the association.
As a member of the North American Barter Group, MTA offers clients 20,000 businesses throughout the United States as bartering partners. Until date, MTA has coordinated more than $250 million in transactions since it’s inception in 1978.
According to Towghi, “One member has a son in Tucson, Ariz., and needed some auto repairs. A deal was made to trade local bartering credits for repairs on the member’s son’s car, and the member’s account was debited for the amount of repairs.”
Members pay a one-time sign-up fee plus small monthly dues to retain membership.
Greater Pontiac Area Chamber of Commerce – Inside Business
Bartering Gaining Popularity in Business World
Imagine a restaurant owner who typically enjoys a busy lunch crowd, but occasionally finds himself with a vacant table.
Can he handle some new business at this time?
“If the answer is yes, the business could have excessive capacity or excess inventory,” stated Michael Mercier, president of Metro Trading Association (MTA).
He offers a solution to the vacant restaurant table — barter your restaurant services in exchange for another service or product.
“Let’s say a group of hungry MTA members dine at the restaurant and spend $100. Instead of collecting money from the group of patrons, the restaurant owner gets $100 credited to his MTA account. Yet the patrons consumed about $35 worth of foods and drinks.”
“Soon the restaurant owner wants to reprint his menu and looks for a printer. He finds an MTA business member that quotes him the best price and orders $100 worth of print work. The restaurant owner incurred an overhead expense that would have cost $100 but he actually spent only $35 (from the food and beverage barter transaction). All of this was created from a sale that MTA brought through the restaurant door,” said Mercier.
“Under the barter system, a business can buy things it needs today and pay for them with a future new sale – instead of cash,” Mercier explained. “The result is an improved cash flow and new cash profits.”
MTA, the oldest trade organization in the Great Lakes region, is a network of 2,000 businesses with over 5,000 participants. The association members conducted over $10 million in business transactions during last year.MTA charges members a 10% marketing fee when it brings new customers to their businesses. Participating companies must profit first before the fee is collected.
Mercier predicts the barter system will enjoy brisk business in the 20th century. “There’s no industry that can be impacted at greater levels than the barter industry by the opportunities of the Internet. It doesn’t matter if you’re in Indonesia or Ypsilanti. The Internet makes the whole world a village,” Mercier explained. “When we put our network on the Internet, businesses will be able to trade services.”
Mercier added, “Barter isn’t just for your neighborhood. It’s now international.” The barter system began in the U.S. approximately 30 years ago. Now it exists in 32 countries around the world.
There are many advantages to international bartering. Global locations with opposing weather seasons are one such advantage. MTA successfully traded $70,000 in off-season summer merchandise to a business in Australia, during the Australian summer season.
“We had an opportunity to sell these items for regular price. If we sold them locally, we’d have to price them at a discount due to the end of the summer season,” said Mercier.
“Over the last decade, big businesses – the Fortune 500 companies – have found out about the advantages of barter. And now the smaller companies are finding out the advantages barter has on their bottom line,” Mercier concluded.