The return of the barter economy

Hey there, time traveller!
This article was published 08/05/2020 (2022 days ago), so information in it may no longer be current.

There is already talk about how the post-COVID business world will mean the start of a new economy.

No one is exactly sure what that will look like, but with so many businesses shuttered for two months already, many have costs sitting on shelves and goods and services that they need now to restart but don’t have the cash to pay for those additional expenses.

There are some who believe it is the perfect environment for a revival of bartering.

John Porter, the founder and CEO of Hamilton-based BarterPay, said that just like the rest of the Canadian economy, activity on his network is depressed with about half of his national network of 4,000 small- and medium-sized business shuttered for the past several weeks.

But he said the good news is he’s signing up new members at triple the normal pace.

Although BarterPay is only a couple of years old, Porter has been developing bartering networks for more than 20 years. He believes this is a good time to grow the concept because things have slowed down enough for people to have the time to think about new and creative ways of doing business.

“The marketplace never has been and never will be more ripe for a bartering community to emerge,” he said. “We have the captive audience of the business owner to tell them something new.”

With franchises across the country including in Manitoba, BarterPay is an on-line network that has recently been endorsed by the Retail Council of Canada, the Ontario Chambers of Commerce and Restaurants Canada. And its charitable arm, BarterPay it Forward, recently partnered with Imagine Canada.

Mike Rosenby, a partner in the Manitoba franchise, said high-profile national partnerships with mainstream business organizations are very good for business.

“If people had questions about whether or not we were on the up and up, when you get organizations like Restaurants Canada endorsing and promoting you it adds legitimacy to the business,” he said.

This is a time when a lot of small and medium businesses are trying to figure out how to proceed after being closed for a couple of months.

“Many have no cash flow because of everything that’s been happening. They are able to use barter credits to potentially offset other expenses,” he said.

The credits can’t be used to pay rent or buy gas, but some are using it for things like landscaping services or renovation expenses.

“Those are some things they would otherwise pay cash for, but BarterPay lets them hold on to that cash,” he said.

Barter may be the oldest form of commerce, but when Porter started 20 years ago it was too early for the market and the technology was not there.

“The mindset of the business owner was not open to other alternative forms of payment,” he said. “But for such a time as this, I’m glad I stuck it out.”

He is hoping to increase national membership to about 100,000 in five years.

Rosenby said the Manitoba barter market has more competition than elsewhere in the country. He said that’s good for business because it means there is awareness of the concept.

There are about 170 Manitoba members of BarterPay. They pay an initial sign-up fee and then a monthly subscription that is low enough most members can make up the value with even minimal trading activity.

Marc Palud, a businessman in Ile des Chênes, has been interested in the barter business for many years. He joined BarterPay out of Regina before the Manitoba franchise was even active.

Palud operates an online business called RevGenApps.com — a marketing company affiliated with the chamber of commerce movement — and a chemical wholesale and distribution business where he has the exclusive Canadian rights to a fuel additive called XP3.

Palud has spent the time to figure out how to optimize such a platform.

“I have the ability to get exposure and get connected to companies and people that I otherwise would never be able to,” he said. “I am shipping product to people I’ve never met because they have seen me through the barter network.”

martin.cash@freepress.mb.ca