When you hear the word 'Barter' do you instinctively think of two farmers trading a horse for a cow, or the likes of latter-day trappers carrying furs to a trading post to exchange them for food and provisions, or like millions of savvy business owners around the globe, do you think of a high-tech way of marketing your goods and services beyond your usual scope, and becoming more efficient in the process?

It's strange that during my entire business education at university (and I was fortunate enough to be educated in some of the best business establishments in London, Munich and Florence)not once did the word nor concept of barter ever surface - even in economics. Strange, don't you think, when barter was the foundation of all modern commerce?

So, how has barter stayed the 'best kept marketing secret in business'? Simple, it has never been perfected on a larger scale until recently with the advancement of computers. Globally barter accounts for almost $1 trillion in annual business. Little 'mom and pop' stores all the way up to Super Power governments barter, some with more success than others. Most recently, in fact, the entire country of Argentina had to utilize the incredible power of barter to pull itself out of bankruptcy, and today over 500,000 companies barter there on a regular basis.

Bartering is a very simple concept: it is the exchange of goods and services for other goods and services. In an ironic manner, workers all over the world barter their time and skills for a salary. As a child, you possibly traded playing cards. It's all the same concept. BUT, how is this an effective advertising/ marketing tool?

Reciprocal trading, whereby two businesses directly trade with one another (radio advertising for airline tickets, for example) is not as effective as trades that occur through barter exchanges and often create less publicity and marketing opportunities. Utilizing an ethical and trustworthy barter exchange on the other hand can be a very effective means of bartering.

There are more than 1400 barter companies in the US alone, varying wildly in size and scope, and therefore in effectiveness. The two major players in the national barter arena are ITEX (a consortium of smaller barter companies) and Merchants Barter Exchange (one of the only 'true' 100% bartering companies in the US). Both companies offer many benefits, some of which are:

+ Greater efficiency (better use of time or inventory)
+ Increase in customers
+ Improved purchasing power
+ Cost-effective exposure to national markets
+ Measurable ROI
+ Word of Mouth Advertising

Since only businesses can be members of barter companies, there is a huge propensity to generate new cash clients that are not business owners. Outside of effective networking groups, like Business Networks International (BNI), barter exchanges are the most effective tool to generate word of mouth advertising and track it.

Barter companies like ITEX (www.itex.com) and Merchants Barter Exchange (www.merchantsbarter.com) act as 'third party record keepers' - similar to credit card companies - brokering and tracking the trades between members. In essence each member has a bartering account - just like their bank account - and are allotted barter credits (usually the same value as the currency of the country - but make sure to check before joining, as some exchanges have inflated economies!). Members purchase things they need - printing, cars, advertising, etc. - with credits in their account, similar to writing an IOU, and owe back the amount of those goods and services with their surplus inventory or down time.

Membership fees for such exchanges are very affordable compared with other forms of advertising, usually much less than $1,000 for a one-time set-up charge, and broker commissions are usually levied on purchases only (generally 10% of the total trade). Again, be warned when checking out bona fide companies, as some charge a lower fee, BUT on both the sale and purchase of goods and services.

Barter: The Oldest and Most Effective Marketing Tool - So Simple, The Cavemen Invented It...!