Let's say you own a profitable company and you have the capacity to handle additional sales without increasing your fixed overhead costs. The traditional way to increase sales is to spend money on advertising and hope it works. The alternative method is to enroll in the A to Z Barter Exchange allowing you to offer your goods to other members of the exchange. The odds are that none of the members of the exchange are your current customers. That means all sales to exchange members are new sales to new customers. Every time you make a sale to another member, you receive barter currency that you then use, in lieu of cash, to purchase products and services you need and want for your business from another member of the exchange. Each time you pay for goods with barter currency instead of cash means the cash your company would have spent stays in the bank, thus improving your cash flow.
Let's say Paul is an accountant and is in the business of providing tax services and charges $100 per hour. As a member of the A to Z Barter Exchange, he sells 1 hour of tax-preparing services to another member in the exchange for $100 barter dollars. As a result of the sale, his barter account is credited with $100. Paul decides to create a new brochure to mail out to prospective clients. Past experience tells him that it will cost about $100 to print these brochures.
Since Paul is a member of the of the A to Z Barter Exchange, he goes on-line and signs in to the A to Z Barter Exchange website to locate a business that will print his brochures without having to spend his cash! He will pay for it with the barter currency he received when he sold tax-preparing services.
Paul contacts Susan, a printer listed on the A to Z Barter Exchange, and asks for a quote on his brochure and specifies that he would like to pay for the printing using his barter dollars. Susan gives Paul a quote of $100. Paul agrees to the price and Susan then calls the A to Z Barter Exchange for an Authorization number. The A to Z Barter Exchange will verify that Paul has at least $100 barter dollars in his account and will issue Susan an authorization number.
When Paul picks up his order he will pay for his printing using an A to Z Barter Check which looks similar to an ordinary check. Paul will sign the Barter Check and give it to Susan as payment just as if it were a regular check. However, instead of depositing the check in the bank, Susan will send the check to the A to Z Barter Exchange.
When the A to Z Barter Exchange receives the Barter check it will credit (increase) Susan's account by $100 and debit (reduce) Paul's account by $100. Susan now has $100 barter dollars that she can spend on goods and services provided by other members of the A to Z Barter Exchange.
At the end of the month Paul and Susan will each receive a statement from A to Z Barter showing all transactions for the month and their respective balances.
In the example above let's assume that Paul's profit rate on the tax services he provided was 50%. That means that in order to sell his one hour of tax services he had to spend $50 in cash. At this point, the sale of one hour of his tax services has generated $100 in barter currency in his account, but he is out $50 cash.
Next Paul spends his $100 barter dollars on printing his brochures.
Now, let's re-evaluate Paul's position. He made an incremental sale, had his brochures printed, and increased his cash flow by $50 (the $100 he saved on the printing less the $50 he spent to earn his $100 barter dollars). Essentially, he traded his $100 service (that only cost him $50) for $100 worth of printing.
Granted the exchange charged Paul a transaction fee to sell his tax preparation services and to buy his brochures, but even after you deduct the fees, Paul still has more cash (and profit) in his pocket than he would have without having been a member of the A to Z Barter Exchange.
Bottom line: