ITEX in San Diego
Cash is Great, But Barter is Smarter
Arthur Kaliel’s first experience with “barter is smarter” may have been 25 years ago but he still remembers it. “I worked for a small printing company in 1986 and I was curious to know how my boss could afford to treat my wife and I to such great dinners and top-notch vacations,” says Kaliel, a marketing agent for ITEX Corporation’s San Diego franchise office. “When I asked, he told me that his generous employee perks were possible because he accepted barter dollars from restaurants and resorts for his printing services,” advises Kaliel.
Kaliel liked the idea of cashless business transactions so much that in 1992 he went to work for Business Exchange International (BXI), which was bought out in 2004 by ITEX, the leading marketplace for cashless business transactions across North America. ITEX provides a stable and secure infrastructure for businesses to barter and has over 90 franchisees and licensees serving over 24,000 member businesses nationwide.
The ITEX corporate office, located in Bellevue, Washington, debits and credits member accounts processing over $100 million a year in transactions and provides 24/7 automated check authorization service via the internet and by phone to insure that all barter checks clear.
An ITEX Checking Account lets members pay for their purchases with offsetting ITEX Check sales rather than cash. Every ITEX member enjoys new business and saves cash on every purchase. Ordinary bank checks and credit cards require payment in 100 percent cash dollars. But every dollar spent with ITEX Checks can be paid with one dollar in new ITEX sales. A member’s actual cash cost is only the cost of their inventory, so they profit by the amount of their markup. When making a sale, members must charge the same price to ITEX members that they charge their cash customers. Prices may not be increased for a ITEX sale. Sales tax and shipping is paid in cash and all sales up to $5,000 must be at 100 percent ITEX trade credits. For the portion of a transaction over $5,000 a percentage of cash may be negotiated.
“Initially when I joined, I took my ITEX checks home and showed my wife the $2500 line of credit that every member gets when they sign on,” says Kaliel, who adds that he still recalls his wife’s skepticism. “After three days of cashless lunches, dinners, baseball games, Disneyland, hair appointments and new shoes, my wife endorsed it and said ‘this is cool, let’s keep doing it,’” says Kaliel. “To continue I had to sell some printing for BSI [now ITEX] dollars,” says Kaliel.
According to Kaliel, bartering is especially well suited to service-based businesses, such as printing, accounting, consulting or graphic design. In a service-based business, income often depends on the ability to charge an hourly wage. Time that isn't accounted for doesn't produce income, so a services business can benefit from using barter to turn excess hours into hard goods.
Just about anything can be purchased on barter. With ITEX/s national membership of over 24,000 businesses there are literally thousands of categories for goods and services to choose from. “There are 1700 ITEX members in the San Diego area and I keep adding more,” notes Kaliel. “Members tell me about other businesses they want to add to our directory and I go out and recruit them,” advises Kaliel.
“The more members trade and the more referrals they bring me, the more cash they save because they are paying with ITEX dollars. Many of our members are like me; once they started bartering they never wanted to pay cash for anything.”
Elaine Russo wasn’t interested in learning about ITEX when she first heard about it. “I was in my second year as a publisher, and I was just too busy.” But her then marketing director, Gloria Taylor Brown, had other plans for her. “She set up a meeting with Arthur Kaliel and practically had to drag me to it,” she recalls.
By the end of the meeting, Russo signed on for the program. “There was little to no commitment to try it out,” she says. And before she knew it, business began flowing her way without her even having to try. “It’s all because I entered the world of ITEX, and once you’re in it, you can’t see how you survived that long without it.”
ITEX has transformed the way Russo does business. “Almost anything you want to buy on barter is available to you,” assures Russo. “I’ve even built my granny suite and gotten a tenant for it through the ITEX network.” And, says Russo, if you can’t find what you’re looking for, you create it. “Plus, the timing couldn’t be better. With the economic problems our country has been facing, barter systems are becoming more popular.”
Using barter dollars can not only help entrepreneurs reduce expenses, but it creates new relationships with little effort and no cost, and enables members to take advantage of barter exchanges all over the world. “It’s huge,” says Russo. “And it’s global. I’ve even traveled to France and Aruba with the help of ITEX dollars.”
Russo notes that some people are initially reluctant to join the ITEX barter system because they’ve had bad experiences in the past with direct barters. “Oftentimes, people in a direct barter with somebody feel like they’re not getting a fair trade,” she explains. “This doesn’t happen within the ITEX barter network because members get to pick and choose what they want to spend their ITEX dollars on.”
Russo is excited to be an official multi marketing agent for ITEX San Diego, national and international. “Working in harmony with Art in San Diego to attract even more quality members to unite our local community is my main goal,” she says. “And the quantity of members will grow naturally from the quality of ITEX members.”
“Cash is always going to be king, but barter is queen. And there’s never been a more perfect marriage!” adds Russo. “You don’t lose your cash clients, you gain new clients you would not have had and cash client referrals. It’s a natural phenomenon.”Edit ModuleShow Tags