Posted on December 9th, 2009
When the owners of Joey’s American Road Service wanted T-shirts for their staff, they didn’t need money. Instead they bartered services for the shirts and were able to conserve their cash for more important things.”I have always loved working with the bartering system,” said Gabe Magnone, co-owner of the business at 1725 S. Nova Road.
While the idea of bartering — the direct exchange of goods and services — is hardly new, advances in technology have expanded the scope of bartering far beyond the early days of swapping butter and eggs for sugar. Firms now use trade dollars or credits they earn by trading available inventory or staff time for products and services.
Christopher Muller, a professor at the University of Central Florida, said bartering has been used effectively by restaurants and other businesses for years. “When the economy turns soft, many people think of it as a good way to control cash flow,” Muller said this week.
At various times, all restaurants do some kind of trade for goods and services, he said. “It is especially useful for radio and television advertising programs.The restaurant will offer a certain amount of face value dining coupons and the media outlet will run advertising in the same amount, both sides see themselves as winning.”
Bartering is a great way for businesses to get rid of excess inventory during slow periods like the current recession. Many businesses don’t have the cash flow they need or are sitting on excess inventory with no buyers in sight. Paul Rompf, another UCF professor, agreed. “Bartering makes sense if you have excess capacity and you want to reduce cost. It (also) is a way for businesses to acquire goods and services they otherwise might not be able to afford,” Rompf said.