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Barter As An Essential Tool For Women Running Their Own Business

by Lydia Gonzales, Design Director

A lot has been made about how women have different (some say superior) manging styles compared to men. Whether those are true enough to be generalized remains debatable, but I tend to believe that a collaborative and relationship-driven style does characterize the way business-women operate. Because of that, barter is the perfect mechanism to leverage this characteristic and achieve good bottom-line results.

Barter historically meant you had to find someone who not only wanted what you had, but had what you wanted. "I will trade you flour if you give me milk." However, thanks to computers and, now, the Internet, complex multi-barter arrangements are easier and accessible. If I want to barter flour for milk, I no longer need to find somebody who's got milk and in search of flour.

This is possible through the use of credits, which is an alternative currency to keep track of barter exchanges. For example, suppose I trade flour for $10 in barter-credits. Somebody else, a florist, for example, has $10 in credits sitting in her account and she needs some flour. She expends those $10 in credits, which then accrue to my account, for flour. I take those $10 in credits and spend it someone who does have milk, even if they have absolutely no need for flour.

No cash is exchanged between bartering parties (although a transaction fee, typically 5% of the transaction for the buyer and seller, is paid to the barter exchange in cash or by credit card). What this means is you are able to conserve cash. I didn't have to spend $10 of hard-earned cash to get the milk; I had extra flour, got a reasonable market price for it (it would have otherwise sat unused) and got milk with just 5% (50-cents) going to the exchange. That's a good bargain.

Another benefit that you get is that you can rid yourself of "excess inventory." Inventory is typically associated with hard goods. A jewelry-maker, for example, who has goods sitting on shelves that aren't moving out faster than than she makes them would have excess inventory. As long as it is sitting on the shelves, it's making your shop pretty, but isn't earning you any money. Most businesses, unless they are heavily in demand or have a very scarce supply, will have some kind of excess inventory. Barter those goods. You'll get the same market value in exchange.

But "excess inventory" can also refer to unused time or service. For example, a friend of mine runs a bed and breakfast. It is always busy in the summertime, but cools off dramatically during other seasons. The place may go for several weeks empty. Each day represents a loss of value to her since she still upkeeps and maintains the place. Once she started to barter, she was able to appeal to cost-conscious travelers and got credits which she spent on renovations, groceries, and just some personal things like dining out. That "excess inventory" of empty rooms was converted into a value-producing asset through barter.

Because computers help to keep track of accounts, the Internet has introduced ways to make barter much more convenient. Lasso! has pioneered this space by providing on-line barter transactions that are secure, convenient, and easy-to-use. They are also very open to suggestions from users to make the site easy to navigate and understand.

Despite the use of the Internet to make the barter exchange, the actual transaction takes on a more personal level than does a typical transaction. Although the credits are as good (some would say better!) than cash, conducting business by barter, particularly with other women members, has a different feel. There is an understanding of trust, that we are engaging in a collaboration to make our businesses succeed. There's a greater appreciation of the value and skills we bring to the table in this transaction, making them more valuable, ironically, in the absence of cash. The interactions tend to be more personal (barter members typically run their own business, so they have a common assumption) and conversational. I'm not sure why, probably because money has become a somewhat neutral intermediary with an unknown source (is she just born rich, is the money from her husband), whereas barter credits represent hard-work or skills that have taken on value in the marketplace.

Some of these latter observations are "warm and fuzzy," but I think have an appeal to women because of their emphasis on collaboration and relationships. Even without these particular aspects, barter makes sense to any business owner, male or female, because of the opportunity to conserve cash, reduce excess inventory, and grow your customer base.

Lydia Gonzales is Design Director for Lasso!, which is the leading Internet-based value-exchange, which enables people to barter with multiple parties by providing an alternative currency. Lydia was bartering her design skills when she learned about Lasso! and subsequently joined three months ago. She is active in promoting the use of the Internet to help women succeed as entrepreneurs.

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