EXPLODING BUSINESS OF BARTER

 (excerpt from the Harvard Business Review)

Business bartering has been around for a while (Pepsi conquered the USSR by exchanging the soft drink for vodka in 1990), but the pace is rapidly increasing. In 2010, for example, the North Carolina Bar Association approved the participation of attorneys in organized barter exchanges allowing them, for example, to swap legal services for credits to "spend" on a vast range of services from computing to web design, auto repairs and advertising. Now, at barter exchanges across the world, professionals from doctors to electricians are trading their services for goods, services or "trade credits" which can then be used to pay for business expenses whether printing, advertising or travel. Meanwhile, corporate barter firms, the intermediaries in barter transactions, have flourished, helping companies to create value from assets which may no longer fit their strategy, may not be working at capacity or are no longer needed. Client firms swap what they don't want or need for something they do — frequently media services. In addition to swapping goods and services for media, companies can use the trade credits they receive from the bartering intermediary to exchange for freight, travel, waste management and equipment. Honda, Kia and Subaru have bartered cars for media trade credits. Haymarket Exhibitions made part payment for advertising using tickets to their exhibitions. Leading electronics firms have bartered discontinued stock, placing it in leading hotels in exchange for media and trade credits — gaining a potential new client in the hotel group in the process. Food manufacturers have bartered excess inventory in exchange for media credits or trade certificates allowing them to purchase other services such as hospitality and cleaning. Lufthansa has bartered real estate for media credits and aviation fuel.