1. What are the advantages of trading?
First, trade allows you to conserve cash. Instead of spending cash
to purchase needed goods and services, you can use accrued trade dollars
– earned by trading your goods and services – keeping
the cash in your business for other purposes, like payroll, insurance,
rent, etc. Secondly, trade increases your market share. And being
a member of a trade exchange immediately produces new business. Finally,
trade lets you put idle resources to work; excess inventory, excess
capacity or excess time can become a commodity within the trade exchange(
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2. How does a trade exchange work?
Members of the James River Trade Exchange (JRTE) use trade dollars
instead of cash to do business together. If a member trades one thousand
dollars of goods and services to another trade member, that member
will receive one thousand dollars in trade credit which can then be
used to purchase a variety of goods and services from other members
of the JRTE. Hotel rooms, resorts, restaurants, advertising, printing
and many other goods and services can be obtained with trade dollars.
JRTE manages the members’ trade accounts and acts as a third
party record keeper. Monthly statements reflecting purchases, sales
and current balance are mailed to each member. (
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3. What other companies are involved in barter?
Nationally, there are over 100,000 businesses currently involved.
It is estimated that 75% of the Fortune 500 Companies engage in barter
in some form or another. Locally, JRTE has near 200 business owners
and professionals currently involved. Local companies who are currently
trading with the (JRTE) include Peoples Income Tax and Business Service,
Cobb Office Technologies, Manchester Gardening, Aarrow Transmission
and Automotive and many others.( go back to top )
4. Why is the James River Trade Exchange unique?
JRTE uses the latest in industry-related software that allows us to tailor
or design individualized accounts allowing
each member to chose their level of participation. This software
also assists us in managing those accounts effectively and efficiently
with personalized service. Our knowledgeable staff makes us the
organization with which to trust your trade management, trade brokering
and trade accounting needs now and throughout the coming years.
Our website also provides our members with pertinent information
regarding co-members, the trade industry, and upcoming events which
may prove beneficial to our members.( go back to top )
5. What does it cost to join the James River Trade Exchange?
There is a one time only initiation cash
fee of $527 that covers the initial setup charge. There is also a
$144 annual trade contribution (trade, not cash) that every
JRTE member makes. This trade fee is usually applied to your account
on a monthly basis. This trade contribution allows JRTE to participate
in the trade exchange which keeps our cash costs at a minimum therefore
eliminating high overhead expenses that most companies pass on to
their members. However, we do have other plans that may better fit
your budget. ( go back to top )
6. How does the James River Trade Exchange profit?
While there are no charges to the seller, there is a standard cash transaction
fee or broker commission which is charged to the buyer for each
trade transaction. This fee is necessary to maintain the operating
costs of the Exchange.( go back to top )
7. Why charge the buyer and not the seller? Shouldn't it be the other way around?
The transaction fee is justified by the new business the Exchange generates
for its members. The Exchange does not believe it should earn a
fee until a member actually spends their accrued trade dollars.
The Exchange assists in each member spending their accrued trade
dollars as advantageously as possible. Most importantly, this arrangement
means you pay only after you receive a benefit from the Exchange.( go back to top )
8. Why a commission fee?
Remember
-- trade business is new business. Many businesses are happy to
pay a small commission for any type of new business. The fee represents
a broker commission and also a source of revenue for the services
JRTE provides. In many cases JRTE serves as the record keeper, member
recruiter, match-maker, event planner and marketing consultant.. ( go back to top )
9. I already trade on my own; why should I join the James River Trade Exchange?
The
problem with one-to-one or direct trading is each business must
want or need what the other business has to offer in equal dollar
amounts. Very rarely is anyone held accountable for any discrepancies
and there is no record keeping. Direct trade is also very limiting
allowing you only to trade with those know. Trading through a trade
exchange brings many more options for spending accrued trade dollars.( go back to top )
10. What if I cannot spend my trade dollars on the things I need the most?
When
the James River Trade Exchange does not have the goods or services
a member needs, it becomes our job to find go out and recruit new
businesses. New businesses are sought to join the Exchange on the
basis of their ability to provide goods and services needed by the
current membership. It is also a good practice for existing JRTE
members to try to solicit or refer new members as well.( go back to top )
11. How
can I spend my trade?
Make a list of your needs. List everything you normally spend cash on.
Do not limit yourself to one or two time item purchases. Use your
checkbook as a memory tool. Also, think of your personal needs.
If you regularly take cash out of the business for personal living
expenses, travel or home improvements -- you should consider using
the trade income you have accumulated, and save your cash for goods
and services the barter network cannot easily acquire. Then go to
JRTE’s website and look at the member list, double click on
any business you may be interested in and find out if you can contact
them directly, who to contact, and what they offer on 100% James
River Trade.( go back to top )
12. What
if I earn more trade credit than I spend?
Members should only trade in proportion to their ability to spend. If one
member sells goods or services in high demand, it may become necessary
for them to limit their trade activity. Our experienced management
team monitors all trade transactions, thus ensuring a balance of
credit and debit. A general rule of thumb is to trade (both sales
and purchases) no more than 10 to 12 % of your expected or projected
annual revenue. Every business needs CASH to operate and to meet
the responsibilities and demands of running any successful business.( go back to top )
13. How
will other members find out about me?
One
of our jobs is to promote your business to other members. When you
first become a JRTE member and profile page is developed for you.
JRTE sends out an email to all members notifying them of your membership.
This email contains a link directly to your new JRTE member profile
page on the JRTE website. The Exchange can also promote your goods
or services to other members via our newsletter, directory, mailing
lists, events and direct contact.( go back to top )
14. Is
it true getting something for trade can take more time than getting
it for cash?
Yes.
Sometimes a business must show priority to its cash customers because
of cash flow necessities. However, advance planning and communication
with your trade broker for alternatives will make trading an effective
and profitable experience.( go back to top )
15. I
am looking for a computer. If I save my trade credit, can I get
it through the Exchange?
Saving
trade credit in order to purchase a specific high demand item can
lead to frustration. Be sure to let your broker know of your specific
as well as your general needs. Clients should spend their trade
credit as they go. And many hard goods, such as a computer, are
difficult to find or obtain on trade as the profit margin is not
that of a “service or labor-oriented business and therefore
not as likely to be plentiful.( go back to top )
16. What
if I need goods or services and I do not have enough credit to purchase
it?
Trade
credit lines can be set up for members just as a bank extends credit
to its qualified customers. All trade credit loans are backed by
acceptable collateral under guidelines established by the National
Association of Trade Exchanges and must be repaid in one year.( go back to top )
17. What
other ways are there to use barter?
Many
members use trade credit to pay employee bonuses. Some members pay
their employees a portion of their salaries in trade credit. At
your request, we will set up employee sub-accounts and will assist
your employees in using their trade credits as advantageously as
possible. Employees need not pay a 10% brokerage fee. This fee can
be prepaid when a member transfers credit to a sub-account. It is
also possible to pay some of your bills with trade credit. We can
help your creditors spend their trade dollars effectively. Paying
bills with trade credit is just one more creative way to use your
trade credit. JRTE can even use trade credit to collect past due
accounts. Often, a business that owes you is willing to pay on their
account with goods or services. If their goods or services are acceptable
to JRTE, we will purchase them in the amount equal to your account.
We will credit your Exchange account for the amount of your Debtor's
delivery. You can then use that credit to obtain goods and services.( go back to top )
18. What
if I quit the Exchange? What happens to my trade credits?
Any
member who quits the Exchange is given three months to spend their
trade dollars. Extensions are usually granted for members with large
balances.( go back to top )
19. Are
there tax advantages to trading?
Trade
income is the same as cash income for tax purposes. There are no
inherent tax advantages. Trading should be considered a marketing
tool, not a tax tool. As with cash income, trade purchases that
are business related are tax deductible..( go back to top )
20. How
do I know how much trade income to include on my tax return?
At the
end of the year, the Exchange will total your trade sales and submit
this information to the IRS on form 1099B. The Exchange will also
send you a copy of this form for your records, sixty days prior
to our filing date.( go back to top )
21. Who
decides what price the seller will charge?
Essentially,
the market determines just as it does with cash. Generally a retail
cash dollar is equal to a retail trade dollar. Where the seller
has a sufficient margin, they are expected to trade their goods
and services for barter at the same price they would sell them for
cash. In some instances, where margins are tight, a seller may adjust
their price to manufacturer's list price. Such a situation most
likely occurs with electronic items such as television sets, copiers
and fax machines. The Exchange frequently publishes guidelines on
this issue. By accepting or rejecting prices, the Exchange's members
act as the ultimate authority in pricing.( go back to top )
22. What
do I do when trade prices are substantially higher than cash prices?
Usually
trade prices are not higher than cash prices. In the event they
are, you have to consider how much you actually invested for the
trade credit you hold on your account. If your merchandise costs
you fifty cents on the dollar, $10,000 worth of trade credit actually
costs you $5,000. If you are a service related business, your trade
credit may only cost you idle time. Always remember, you are using
your goods and services when making purchases with trade dollars,
not your cash. It will often be less expensive to pay retail price
with trade dollars than to get the same article at discount cash.
Seasoned traders are always aware of this difference and use it
to their advantage. On the other hand, if someone overprices their
products or services beyond a reasonable limit, do not do business
with them. Instead, call our office for another referral.( go back to top )
23. May
I exclude anything from my inventory?
Yes.
However every JRTE member MUST offer at least one of its major products
or services on 100% JRTE trade. But keep in mind, you should only
trade what you want to trade. The idea of trade is to move excess
inventory which gives you an advantageous profit margin. Reasonable,
specific restrictions on certain goods or services are databased
by JRTE to maintain a smooth trading environment.( go back to top )
24. I
have heard that barter is only good for the acquisition of services
and not for goods. Is this true?
Barter
is obviously best suited to high-margin situations in the marketplace.
Margins are highest where businesses trade only their time or where
there is an excess capacity such as undersold radio time, hotel
space or idle equipment. However, barter can also be used to acquire
goods at regular prices if margins are adequate. Where margins are
tight, goods can be readily acquired by trading them at list price
or with a cash component.( go back to top )
25. Can
I use my trade credits to negotiate purchases with businesses that
are not members of the Exchange?
bsolutely!
However, take care not to promise anything without first checking
on its availability with the Exchange. A member purchasing a $10,000
car from a non-member dealer should ask the non-member if they will
accept goods or services for the down payment. If the car dealer
accepts, and if the Exchange has what the dealer wants, the trade
can be made. Members are always encouraged to negotiate at least
a small trade component for purchases with non-member businesses.
The Exchange is always willing to assist you in developing any special
trade transactions.( go back to top )
26. Can
my trade credit be spent with other trade organizations?
Absolutely!
However, take care not to promise anything without first checking
on its availability with the Exchange. A member purchasing a $10,000
car from a non-member dealer should ask the non-member if they will
accept goods or services for the down payment. If the car dealer
accepts, and if the Exchange has what the dealer wants, the trade
can be made. Members are always encouraged to negotiate at least
a small trade component for purchases with non-member businesses.
The Exchange is always willing to assist you in developing any special
trade transactions. These transactions are often called “One
Time Only” or OTO transactions.( go back to top )
27. Can
my trade credit be spent with other trade organiz?
In the future as JRTE grows, we will have the ability to trade with
other trade exchanges across the country. When we reach a membership
of approximately 300 members you may spend your trade credit with
any trading member that belongs to the national trade network of which
we are a member. This way you gain access to the goods and services
of literally thousands of businesses across the country. Arrangements
must be made in advance through our office.( go back
to top )
28. What is the $144 trade contribution and why is it required?
Every James River Trade Exchange member is required to contribute
$144 trade dollars per year ($12 per month) as these trade dollars
go into a specific fund which allows JRTE to participate as a member
itself. The trade dollars which are collected are used to pay for
services and products that benefit the trade exchange and its members
as that benefit the trade exchange and its members as whole such as:
- JRTE Website
- Co-op Advertising Reimbursement
- Member Referral Rewards
- Quarterly Socials
- Office Needs
Using trade dollars for expenses like these keeps cash costs down, which keeps overhead at a minimum thus reducing the costs to you, the member. This practice allows JRTE to offer the lowest membership fees and commission fees in the area.( go back to
top )
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