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A sagging economy is forcing many firms to cut back on employment and shorten the workday. Ron Unger, however, is pitching what he thinks is a better alternative to layoffs and a shortened workday: old-fashion bartering.
Bartering, the exchange of goods or services between parties without the involvement of cash, traditionally takes place by direct trade.
But Unger and his Sarasota-based International Barter Exchange have put a new twist on barter by offering a trade currency. A business that works with IBE receives so-called banc dollars equal to the value of what they offer for trade.
Unger adjusts for inflation to get his clients the full value of an exchange. These trade dollars also offer businesses the opportunity of running credit.
The beauty of a barter exchange, says Unger, is keeping a business' cash flow strong. If a retail store needs plumbing work, for example, instead of fronting the cash, it can find a plumber through IBE that accepts trade dollars.
This is crucial during a recession that restricts financing for businesses. Hence, Unger's mantra is “recession looming, barter booming.”
The barter industry on the Gulf Coast has produced other niche players, such as Florida Barter, which serves Tampa and Orlando, and ITEX, a Naples-based franchise.
Dr. Michael Kanter, a Lakewood Ranch-based dentist who has been an IBE member for 20 years, uses barter to give his employees bonuses. He keeps his crew's morale high with free meals at the myriad of restaurants Unger's trade exchange offers.
And Advanced Computer Systems' Mark Sticht, whose IT company serves Bradenton and Sarasota, says he uses bartering and the IBE for everything from dry cleaning to plumbing.
The IBE makes its revenue through transaction costs and fees. On the costs, it charges 15% of the purchase to the buyer, and on fees, members pay a onetime $495 initiation fee and $25 in monthly dues.
Unger is currently waiving the initiation fee in order to generate more members.
Unger founded IBE more than 20 years ago out of his garage, back when the local barter industry was a happening scene. When Unger launched IBE, there were 16 barter exchanges in Sarasota County, from folks such as Unger to shysters hawking wares out of their trunks.
With the help of a Barnett Bank branch — which allowed him to use a conference room — Unger began to build IBE past his garage. Originally it was called Barter Banc, but after opening a branch in Russia, the name was changed to the International Barter Exchange. That branch, as well as one in Poland, has since closed but IBE still has a downtown Sarasota office and a membership hub in Naples.
The barter market is much thinner now and Unger credits his savvy thinking for his survival. “Street smarts,” he says. “I'm not talking about stuff you learn at Harvard.”
Since Unger deals in non-legal tender, one key to his business is to make quick and correct decisions about how a business is doing. Unger can get stuck with hefty debt if a firm defaults on its balance of Banc dollars — a lesson he learned once while paying out of pocket for a sizeable repair due to a restaurant refusing to accept the payment structure.
Unger also believes regulations are key to a successful trade exchange. He makes sure businesses involved don't have unrealistic expectations and that no perspective member thinks of bartering or IBE as a way out of taxes or a miracle cure for an inefficient business.
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