Ever wanted a ‘secret’ savings account, where you don’t have to deposit any money and there are no service fees? Yet you can make withdrawals -- as long as you do your part -- and receive lots of goodies in return.
That’s the idea behind iTrade Atlantic, a Halifax-based bartering exchange where members trade services with one another in lieu of payment. Instead of dollars and cents, their currency runs the gamut from print jobs to website design.
Mike Casey, who owns Finbar’s Irish Pub in Bedford, has been a member almost since the beginning. He has used his iTrade dollars for items like hotel savings and prizes for sales competitions.
In a typical transaction, other iTrade members would come to his restaurant for some fish and chips, for example, and sign a slip at the end verifying their iTrade status. Afterward, Casey enters the transaction as a deposit into his iTrade account and receives an equal amount of credit for future use. Aside from cash tips, no money changes hands and every service is exchanged dollar for dollar.
In a sense, the transaction doesn’t cost Casey anything extra since he would have had to purchase a certain amount of food and beverages anyway. This way, he gets more tables filled and the chance to trade in his credits for services he may need down the road.
The system is great for staff perks and employee incentives, he says, because he can spend the ‘money’ on items he wouldn’t ordinarily run out and buy. In the last two years, he has even tailored his annual staff party around the trade group.
“If I said to my wife, ‘I’m going to take our 20 staff in a limo and go to a basketball game and it’s going to cost $1,000,’ she’d laugh at me. But with trade, it came effortlessly.”
iTrade Atlantic traces its roots back to the Edwards Randall finance firm, whose goal was to help businesses secure financing.
The parties signed on with an existing barter exchange and began taking some of their retainers in trade from companies who couldn’t afford to hire them outright. That’s when things really started to click, recalls iTrade Atlantic president Keith Miller.
Being new to this area, it was a great way to penetrate the market. Miller’s group became partners with the existing barter exchange’s franchisees, who had struck out on their own, and eventually bought them out.
Today, iTrade Atlantic has a gentleman’s agreement with another Halifax trade exchange that prohibits poaching. (In fact, the company is mostly building on its Edwards Randall contacts.) A gentleman’s agreement in business transactions may be virtually unheard of in larger centres, yet it’s exactly the kind of corporate culture you’ll find in Nova Scotia. That’s why iTrade Atlantic’s approach works so well here.
The biggest hurdle is small and medium-sized businesses that don’t understand the concept of trade or have never heard of it. Part of Miller’s job is to educate, explaining that trade won’t replace their cash business, only augment it.
That becomes much easier when he has a customer already in his back pocket, so to speak.
“If somebody wants a roofer, well, guess what? I’ll look at the top five roofers in the city and I’ll approach them and I’ll say, ‘Listen, I have ready-made business for you if you want it. If you don’t want it, I’ll probably approach one of your competitors and he’ll take it. So it’s basically delivered to you on a platter.’”
Another part of Miller’s job is to ensure all members are trading fairly, although the industry is subject to Canada Revenue Agency regulations like any other business. iTrade Atlantic gets paid five per cent on all trades, which are tracked online using web software.
Ideal candidates for trade are those companies whose margins normally run higher than 15 per cent. Hotels are an ideal fit, since the rooms are there no matter what.
“What was last night’s empty hotel room worth? You might as well get something for it,” Miller says.
In business for about 2 ½ years, iTrade Atlantic now boasts more than 90 members. The company employs two part-time salespeople who try to sign up businesses that come as a direct request from existing members. Think of a restaurant owner trying to lower her overhead by seeking a fridge repairman she can pay with trade dollars instead of cash.
The company, which hopes to go Atlantic Canada-wide, also emphasizes networking.
iTrade Atlantic also has a trade affiliation with the largest barter exchange in the Caribbean, meaning members can spend some of their trade dollars there. Yet the lure of sun-drenched beaches seems to be less inviting than the chance to exchange services locally, as nearly all of the iTrade Atlantic members have so far chosen to trade within Nova Scotia.