Conclusion

Because companies are faced with constantly shifting supply and demand factors, barter is a highly effective tool that enables organizations of all sizes to creatively manage their inventory. It enables business owners to gain value from goods or services that would otherwise be rendered worthless. And barter provides an effective means for companies to expand into new markets, gain trial usage from prospective customers, or increase market share. What was once a simple type of goods-for-goods transaction has evolved into an established and accepted system for facilitating a limitless variety of exchanges for products and services.

Whether for an excess of traditional inventory or seasonal merchandise sitting idle in a warehouse, barter serves as a compelling alternative to costly inventory management issues.

More than one-third of all U.S. businesses engage in some form of barter, and fully 65% of the companies listed on the New York Stock Exchange use barter to reduce inventory, bolster sales, and ensure capacity at production facilities, notes the barter industry's leading trade group.

Some economists say barter that works well is bad for the economy. Barter exchanges hinder the free market by limiting the pool of trading partners, says Tim Duy,² an economics professor at the University of Oregon and director of the Oregon Economic Forum. If people miss out on other opportunities by focusing on barter trading partners, he says they could make themselves and the community worse off.

But Stodder's research shows that if a barter exchange is large enough, it acts as an economic stabilizer because it means goods and services move around even as unemployment rises. The U.S. barter exchange industry would have to grow by about tenfold to get to the point where it would have a stabilizing effect on the national economy, but some well-established exchanges have already helped their local communities, Stodder says.

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