Barter Clubs Make Their Own Deal
Fast-growing Business Exchange Inc., a North Hollywood-based barter club, is merging with three smaller Southern California clubs, which should boost its nationwide enrollment by about 7.5%.
Publicly held Business Exchange, founded in 1960, expects to pick up about 900 enrollments from members of Trade Assn. System of Cerritos, Exchange Enterprises of Thousands Oaks and Barter Systems International of Los Angeles. Members of the three clubs are being offered the chance to convert their memberships to Business Exchange enrollment. There is no fee or cash exchange involved in the conversions.
Business Exchange operates a barter credit system, which allows a member business or professional to sell products or services for barter credit, and to use those credits like cash to acquire goods and services from any other business participating in its program.
The company acts as a third-party “bookkeeper,” which debits and credits accounts of its members when they barter for goods among themselves. (For example, a bicycle shop owner receives a credit for selling a bike to a dentist. The dentist receives a debit. The shop owner can apply his credit toward any other members’ goods or services, while the dentist works off his debit by providing a member with dental care.)
The deal with Business Exchange gives the smaller clubs’ members “the opportunity to get into an organization that offers barter on a national basis,” said Spence Whatley of Trade Assn. System and now a trade broker at Business Exchange’s West Los Angeles office.
Business Exchange currently has an enrollment of 12,000 U.S. and Canadian businesses. Its first overseas venture, Business Exchange of Japan Inc., has enrolled 150 member businesses since it was started last year, the company said. Business Exchange has a 30% interest in the firm.
Robert McCreary, general manager at Business Exchange, said the anticipated 900 enrollments represents a potential trade volume addition of $2 million to the company’s annual trade volume of $37 million.
Business Exchange had total assets of $8.5 million and gross income of $4.2 million in the latest year, according to McCreary.
