My first experience with bartering was the school lunchroom when I was a kid. Bored with the same old thing, I found someone who had a more appetizing cuisine. “I’ll trade you my ham sandwich for your peanut butter and jelly.” Since my mother wasn’t big on peanut butter and I had plenty more ham sandwiches waiting to be made at home, I figured I found a bargain. Plus it didn’t cost me a dime. As primitive as that barter was, it worked because I had something to offer in exchange for goods I didn’t have to pay for. I saved my cash for the coke machine; I got what I wanted and so did the other kid.
Obviously bartering for adults is a different matter and today it’s a multi-billion dollar industry worldwide. With concerns about the credit crisis and the threat of increased taxes, more small businesses are using this method to stretch their dollar.
The modern barter and trade system at Itex is one example of how bartering increases cash flow but how it can also lead to cash transactions. Pete Benes, who is in the process of buying his own Itex franchise, says it’s a great tool. “It’s actually one of the businesses that does well in an economic downturn because you’re attracting new customers, generating new sales, increasing your cash flow and you’re improving your bottom line.”
How does it work? Forget trading apples for oranges and think more like an online monetary account. When you sign up your small business for a bartering account, you receive a credit line of $2,500 Itex dollars which are the equivalent to our own U.S. dollar. By selling your goods and services you replenish your account with more Itex dollars. A business can place unlimited ads at Itex.com free of charge and immediately begin trading without having to make a direct swap. “The credit line gets you started, giving you spending power right away. So day one if you find something that costs $500 Itex dollars and you use your line of credit, you want to make that back by gaining business.”
Although it is ideal for the internet savvy, members are not limited to online transactions. In a few weeks, you receive an Itex checkbook in addition to the online electronic account. You can mail or present the check at a member’s business, send it electronically or simply use debit option online.
It’s not entirely cashless however. There is a monthly fee of $20 and a cash transaction fee of 6% but Benes said it’s well worth it considering how much cash you save. “People pay $50 a day for a newspaper ad, this is $20 a month and I guarantee my members new business.” Prospective members receive a consultation with Benes who evaluates their expenses to judge how other businesses can meet their needs and what opportunities are available to them for new clients. “If I can’t get you new business then it’s not going to do me or you any good.” Spending your Itex dollars is not limited to business expenses either but is also used for personal expenses to improve your way of life.
Itex reports $300,000,000 in transactions and has over 25,000 members in the U.S. and Canada who offer services in numerous categories. “Advertising, printing, travel, construction, accounting, art, clothing, legal services, food and the list goes on.” said Benes. Benes has used everything from marketing to web design services and eased dining and travel expenses.
Benes said members also gain cash sales. “I emphasize that it’s not only my job to promote my members to other Itex members but to promote cash business as well. My wife and I went to dinner with someone at Shorty Smalls, restaurant member in Oklahoma City. We paid with Itex dollars but they paid cash. That’s business they would not have received if I had not brought that customer with me.” He also paid with Itex dollars for their family vacation. Some of his friends decided to take the same vacation but will pay cash.
Itex opens up new markets to businesses as well. Benes recently purchased a sign from a company in Oklahoma City who otherwise wouldn’t have found a market in Ada. Since Benes was pleased with the work, he decided he will use them again. Opportunities abound nationwide as well. As a partner in Cutters Cross, a specialty food business that makes salsas and spices, Benes decided to market their products on Itex. They weren’t prepared for what happened next. “It’s a very small business and we got hammered with orders. We actually had to shut off orders because we got orders from all over the country. One order was for a hundred gift boxes an executive plans to give his clients in several states. If his clients like our products, then they’ll order but they’ll pay cash so it’s a great way to get our name out there.”
Itex has been around since the 1980’s but experienced exponential growth in 2004 since CEO Steven White took the reins. Although the bartering industry has been corrupt in the past, a lot has changed and Itex has championed high business standards. “Businesses weren’t reporting to the IRS and a lot of them were shut down. Here everything is reported to the IRS but you do get the same tax benefits for donating your Itex dollars to non-profit members. We donate ours to Boys’ and Girls’ Club of Ada. Since it works the same as cash, I will get a tax deduction for that even though it was Itex dollars. It’s a great system.”
Although Benes offers a one-time credit to members’ accounts for referrals, he said Itex is not a network marketing company. “This has nothing to do with levels or anything like that. It is a network of businesses but it is not a network marketing company where your success depends on recruiting other businesses.” Although other brokers charge as much $1,500 to set up membership, Benes does not currently charge a setup fee.
Whether Itex’s growth is the result of tougher economic times or American ingenuity, small businesses are finding a better way to survive. For more information about Itex, you can visit them at www.Itex.com. Contact Pete Benes at 580-320-0178 or email, pete.benes@Itex.net His office is located at 119 N. Broadway Ste. 17 in the mini mall.