Web Hunter: How to get what you need when you don't have the cash

Russ Kratowicz, P.E., CMRP, executive editor, demonstrates a time-honored way to get what you need despite budget cuts.

By Russ Kratowicz, P.E., CMRP, Executive Editor

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Most manufacturing plants already have put their corporate spendthrifts on short leashes. When economic pessimism rules the day, maintenance spending has a nasty way of dropping to zero while the need for tools and parts continues on, heedless of the economic punditry on the telly.

For centuries, mankind has managed to exchange goods and services in the absence of cash, credit, banks and the other institutions we now think are so necessary for functioning in the real world. We’ve lost our ability to haggle in an unstructured marketplace. We’re not sure how to do it anymore. That uncertainty becomes the launching point for this opportunity to root around in the chaos we call the Internet in search of some credible, practical, zero-cost, noncommercial, registration-free resources that can shed some light on barter and trade for the industrial world. Remember, we search the Web so you don’t have to.

Getting started

There are three main variants of the cashless transaction and quite a few benefits accruing to a company from using such exchanges. So says Nigel M. Healey in his article titled “Why is corporate barter?” Pay a visit to http://findarticles.com, where you’ll see “Find Articles in:” and select “Business.” This lets you browse publications in alphabetical order, and you should select the letter B to zero in on a publication called Business Economics. Scroll to the lower part of the page, click on April 1996, and read this eight-page article (including three pages of footnotes and references) to learn about the variants, the benefits derived from engaging in industrial barter and an analysis of the domestic barter industry. The article examines a selection of barter-related material published since 1974.

Case studies

The typical plant warehouse probably holds several examples of excess unsold inventory, each item of which represents cash that should be deployed in far more productive ways. Companies that have found themselves in this situation include MTD Products Inc., AT&T, Konica U.S.A. and Heineken U.S.A. Inc. It was some form of barter arrangement that helped each of these companies liquidate that inventory. Maybe you could help ease your budget crunch by doing the same thing. All that’s needed to get things moving might be some case studies, in which case you should open your book to www.industryweek.com and access the drop-down menu at the top right corner under the word magazine. The past issue you want is dated May 18, 1998, and the article you want is titled “Corporate Barter: Out Of the Dark?” In it, Karen M. Kroll shows you how these companies disposed of lawn mowers, sunglasses, handheld consumer products and, amazingly, office space. Now, you can go forth and be the financial hero of the moment.

Money source

In the beginning, there was barter. Ancient peoples had unmet needs, but no mints, coinage, paper or printing presses to make greenbacks. They had no choice but to use other readily available items as a medium of exchange. Society had an inexorable desire to improve, so the beads and trinkets ultimately were abandoned in favor of coins. That scenario appears to be a point of contention between Nick Szabo and Mencius Moldbug, a pair of bloggers, the former at George Washington University and the latter being a pseudonym for someone out there. When you have enough time on your hands, you can get a sense of the give and take between the two by reading Szabo’s “Logical emergence of money from barter,” and the subsequent online debate. The material is located at http://unenumerated.blogspot.com, and you should scroll down to the archives in the right-hand column and select the March 2008 issue. When that loads, drop down to the March 5 entry (they’re listed in reverse chronological order) and click on “Links to this post” found just below the last line of the posting. That will get you the original essay and the comments from both parties.

Everybody’s doin’ it

If your company isn’t actively investigating the barter concept, you folks might be missing out on something good. But, don’t take my word for it. The skeptics out there in readerland might have an interest in the next Web site. It presents the basic idea of how the different barter exchanges operate and highlights the dollar volume trends in the world of bartering. Toss your mouse at http://news.thomasnet.com and enter the word “bartering” in the search feature at the upper right corner. You’ll want to select the article titled “Small Biz Owners Revisiting Age-old Tradition: Bartering,” by Jorina Fontelera. It’s a link-rich page that will take you many interesting places.

For the Pacific Northwest

Martin Kagan runs The Capital Asset Exchange Ltd., Beaverton, Ore., which seeks to be a forum and trading environment for its members. To that end, the organization established the Oregon Trade Expansion Network (OTEN) to act as a clearinghouse for barter transactions among members in that state. Of course, there’s a Web site associated with both entities and I’d like to direct your attention to a specific page there. Head on over to www.capex.com to access the link that takes you to OTEN. The new page has a link to an article titled “Trade Economics 101.” Kagan says that it will help you determine whether barter can give you a competitive advantage in terms of getting new business, selling surplus, conserving cash or alternative financing. Kagan’s prose is a bit too abstract for my tastes and the graph that’s supposed to be on the page is missing, but there’s a message here that might prove to be of value to your real-world problems.

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