Bartering Best Suited for SMBs

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I wrote last spring about how their flexibility and relative lack of red tape often help SMBs be more innovative than their larger competitors. (Of course, sometimes behemoths like General Electric can be incredibly innovative. Check out my post on their internal social network that boasts 400,000 users around the world.)


So I felt compelled to share an interesting New York Times story about an online network that allows SMBs to barter for goods and services, a practice that just wouldn't work for most large companies, some of which maintain entire departments devoted to procurement.


The site, Joe Barter, has 400 business-to-business members. Unlike the 2,500 individual members, who use the service for free, businesses pay consultation and referral fees.


It turns out that Joe Barter commands only a tiny slice of the bartering or trade exchange business. According to Robert Meyer, publisher of Barter News, some 450,000 companies participate in bartering. The companies that facilitate bartering, as well as their clients, tend to be small, says Meyer.


Steven White, CEO of a trade exchange called Itex Corp., says bartering helps SMBs conserve cash and also come into contact with potential customers.


Meyer credits the Internet with helping expand the barter business. Last year the total value of commercial barter transactions hit $6.5 billion.