Dare Magazine Article on Barter


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Ormita Commerce Network Barter Exchange www.ormita.com
Global Barter Exchange Network. Barter Franchises and Licenses Available.

Unsold appointment time, empty hotel rooms, unsold venue passes, unfilled advertising space, rapidly depreciating stock, end-of-line items or oversupplied products all represent lost revenue which otherwise will never be recovered.

These unproductive or unsold assets are known as "dead capital" and there is an estimated 9.3 trillion dollars of it world-wide.

It is Ormita’s mission to transform this otherwise lost profit into new income, investments and other benefits.

Ormita works directly with Government Ministries, State Owned Enterprises, Fortune 500 Companies, Stock Exchange Listed Companies and a handful of carefully selected private corporations in 54 countries.

The Ormita Commerce Network, its licensees, and subsidiaries operate under the master brand name ‘Ormita’ or ‘Ormita Barter’. We are the world’s largest multi-national barter network as measured by international transaction volume, country footprint and service offerings, and believed to be the second largest barter network in the world after the WIR Bank, (formerly known as the Swiss Economic Circle / Wirtschaftsring-Genossenschaft or WIR).

We provide regular barter related information and offerings to more than 210,000 business and public sector clients through personnel operating in Australia, Canada, China, Egypt, Germany, Greece, Hong Kong, India, Indonesia, Iran, Italy, Macau, Mexico, New Zealand, Pakistan, Poland, South Africa, Sweden, Turkey, United Kingdom, United States of America and Zambia. For more information, please visit ormita.com.

Barter Exchange Franchises www.ormita.com Barter Exchange Software www.ormita.com Barter Franchises www.ormita.com Barter Exchange www.ormita.com

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Dare Magazine Article on Barter

  1. 1. Barter your way to Success!!!In an era when the industry is embracing the slogan, “Cash Conserved isCash Earned” on its sleeve, barter is the strategy many think of /Nimesh Sharma Source: ormita.co.in H aving evolved from a most Ask Ashok Gupta of Dynasty Resorts. BARTER (bar¦ter) (Verb) ancient system, barter to- Gupta who engages in bartering exchange (goods or services) for day has acquired immense resort rooms with his trade part- other goods or services without significance among the business ners and has dealt with many barter using money: community, from the perspective of companies, says we barter for ap- e.g., I. he often bartered a meal saving costs and minimizing unuti- prox Rs 10 lakh in a year wherein for drawings lized assets. we receive goods like linen, gift II. they were able to buy or In an era when the industry is items, toiletries, furniture, mattress- barter for most of what embracing the slogan, “Cash Con- es and even media ads to save costs they needed served is Cash Earned” on its sleeve, which are not trivial and to avoid barter is the strategy many think of. cash outgo.  AUGUST 010 | xx x xxxxxx | dAre.co.in
  2. 2. However, it is not trivial to land Barter Industry Internationallya barter deal. Most SMEs find it dif- Size of barter industry globally: Vital Statsficult to initiate the process. To suchpeople help is at hand. A mini indus-try of intermediaries is thriving in In- unproductive/unsold assets/Dead capital globally USD 9.3 trilliondia which helps companies identifyand match their barter requirements. Barter Trade’s pie of world’s total business 30%Some of them even help the compa-nies to complete the barter transac- Share of Fortune 500 companies barter 70% 80%tion either online or offline using Share of media corporations using barter (Acc to AAA)time-tested processes. In India, barter industry hasbloomed in niches and corners.Companies such as Net4barter, One- Share of NYSe listed companies doing barter 65%uptrade, Tradex, BarterBiz, BenefitBarter offer intermediary services to Number of businesses engaging in formalized non-cash transactions in uS 400,000enterprises, each with a differenti-ated offering. While profitable, theirscale is not comparable with the Number of barter exchanges in uS 800 approxcompanies in the international mar-ket, especially the US where thereare about 800 barter exchanges, and Share of business transactions as barter in Switzerland 30% = USD 6 billionapprox 400,000 businesses engage informalized non-cash transactions.Meanwhile India boasts of about ten mum Rs 10-15 crore in terms of an- direct barter. They market your prod-sizaeable barter exchanges. nual barter transactions. In the next ucts or services, eliminate the need Competition is hotting up a bit five years it is estimated that media for one to one barter, get new custom-in this sector. International barter barter alone will account for Rs 200 ers, act as escrow agent and sourcecompanies like Ormita Commerce crore, retail barter industry is likely new suppliers for your business. TheyNetwork and BBX are making their to log in a whopping Rs 3,000 crore even record the value of barter trans-entry into India. Ormita Commerce and corporate barter will account for actions for you online and the reallyNetwork commenced its operations Rs 500 crore. The biggest barter ex- good ones provide you with multiplein April 2010. They are trying to gain changes is expected to do a business medium to transact – Online fundground using their brand name, rep- of about Rs 50-100 crore in a year. transfer, manual transactions, debitutation and international network. card online, fax transactions, phoneIt has already acquired close to 300 Where should you begin banking and features like multipleclients, including some big names, with bartering? currency dealings.in their three to four months of In- Well, as a starter, ask your clients/ Rajesh Kukreja, Optima Watchesdian existence. suppliers if they can barter (partially) who has dealt with a number of bar- With barter becoming a main- a part of their requirements/supplies ter exchanges bartering watches forstream strategy for companies across with you, with cash forming only a gifts and for advertising says, “Get-the board, this is generally seen as part of the deal or zero if possible. ting the help of a bartering exchangean opportunity by industry insiders. However, you should already know is a good idea for companies to gar-Puneesh Mehra, CEO, Oneuptrade, to what use you will put the items ner extra business.”expects the bartering industry to acquired. For instance, you can trade However, you need not confinereach a size of Rs 5000 crore in the air conditioners for advertising with yourself to just one form of barter.next five years. your client. You can opt for media Barter wherein A number of organisations already you offer your goods for media spaceBarter scene in India barter directly with their clients. How- for your organization which couldCurrently, the barter companies in ever, its not always possible to barter be print, online, radio, TV, out-of-India charge five to ten percent fee directly. In such cases, barter exchang- home (hoarding, etc) or B2B barteron the transactions and the biggest es come handy. Barter exchanges do is another option which essentiallyones are doing a business of maxi- what is difficult or impossible to do in means bartering with a corporate cli- dAre.co.in | xx x xxxxxx | AUGUST 010 
  3. 3. rohit Mahajan Co-founder of Ormita India, and a veteran investment banker, on the barter industry in IndiaWhy should a business barter? new sales-–not existing cash income or by and offset these expenses incurred on aAs a business, you have several goals for giving goods and services non-cash basis through incremental (new)yourself. Bartering helps you achieve them • It promotes local business sales. Once those expenses are covered,with little more ease as you have the support At Ormita Commerce Network we facilitate however, by existing cash business, thenof a barter eco-system. Business can benefit our members to transfer their existing every additional customer through Ormitain the following ways through barter: ongoing cash expenses to non-cash basis is new revenue, with a higher margin• Reduces existing cash costs and saves of profit. cash as you make purchases out of All this is done by arranging local revenue generated from new sales-–not It may be easier for networking meetings, online trading existing cash reserves platform, producing an electronic and• Creates value from under-performing bigger players to start a printed membership directory, sending assets/unsold time or capacity. Time- barter exchange, but its email and SMS broadcasts of latest deals sensitive products, space, tickets or and distributing regular newsletters to services are unrecoverable if not sold. quite difficult for a small participants. Receive more value than discounting business to do so, as this• Lets participants buy goods and services What best practices a barter exchange at a discount. Use your spare time, excess requires a very efficient should observe so that the barter capacity, depreciating inventory, etc to team, transparent policies industry takes over a good part of Indian make purchases and efficient business?• Offers interest-free finance with no cash Trade can be a valuable tool for any business, repayments. Repay borrowings out of IT infrastructure. however the value of any trade credit is only  AUGUST 010 | xx x xxxxxx | dAre.co.in
  4. 4. as good as the company managing it. Be sureto ask questions, do your research and never Media company Walthand over money until you know that you have Disney entered into a barter Hollywood movie starsa way (and a plan) to spend as well as earn. deal with News Corp and often choose to accept the1. Ask to see their corporate profile, NBC Universal wherein it will barter option rather and take including directors, business structure, provide free Disney content to be an ownership stake in the film vision and mission aired on their website Hulu.com while passing on upfront fees and in lieu, has taken an for starring in a movie.2. Do an Internet search on the company, its equity stake in the site. management and its owners3. Ask to see their marketing materials/sales Some examples literature to see the different aspects of of high-profile its business4. Find out about the financial management barters done skills and qualifications of the owners to Internationally ensure safeguarding of your assets Universal Studios Home5. Assess the integrity of other members Video, Twentieth Century Fox Hollywood Actor Bruce Willis6. Find out if there is anything to buy. Make and SKG have negotiated a barter took a 3.3 percent barter equity a list of all the products and services you deal with kozmo.com wherein it stake in Belvedere, the French has taken non-cash equity stakes spirits group, as payment for purchase regularly and make sure that the promoting its vodka brand and is providing Kozmo with videos exchange offers at least some of these on Sobieski Vodka. and DVDs at lower prices. an ongoing basis7. Ask if they charge a fee when you buy, sell, or both. Your total fees (buy plus sell) should be less than 10 percent8. Ask the Exchange to explain their credit ent/supplier, exchanging goods or some exchanges charge, if you dont management policies and accounting services mutually. You can also bar- utilise the services fully. As some ex- procedures for its own financial viability ter through a barter exchange. Here changes buy on barter, and sell on9. Request a copy of their policy on ‘deficit you could get a whole lot of services/ cash and vice-versa, you may feel accounts. Have from them in writing goods with more diverse variety, with cheated as your product is sold at that they do not, and will not, operate a clients ranging from corporate to re- inflated price which may dilute your deficit account tail. See the benefits below in the ar- brand equity. Additionally, if you are10. Make sure you can sell, but also that your income won’t exceed your ability ticle. You should choose an exchange not negotiating enough, you may to purchase which lets you meet and negotiate end up paying a fee on both selling11. Find out how to perform transactions. with other barter members. If you are as well as buying, which will increase Do they offer multi-channel support for doing retail Barter, you are barter- your cost. the trading? ing with your multiple retail clients However inspite of all these cons,12. Investigate their accessibility and office which is probably the model followed Barter Exchanges, especially the up- hours which should be atleast ten hours by media companies. coming ones, with proven track record owing to varying work hours Sushant, Group Head, Resonance are giving fair deal to their members13. Find out if you are allowed to sell in part Media, who has been bartering me- as they have transparent policies. cash to cover your Sales Taxes and non- dia space for ACs, tyres, and cosmet- If you are an entrepreneur or SME fixed overheads ics very frequently expects more di- just out of the brunt of the recession, verse products to be available with bartering may be the way out for youHow can the small players be a part of the new upcoming barter exchanges to save on cash costs and expandingthis barter industry as facilitator? Or is ita reserved domain? and says exchanges are better as cli- to new markets. This is one industry,Well, it may be easier for bigger players to ents tend to give inflated prices while which if you know how to utilize wellstart a barter exchange, but its quite difficult dealing directly. to your benefit, that can lead to sig-for a small business to do so, as this requires So, while barter exchanges are nificant growth and more important-a very efficient team, transparent policies making sure clients get real prices, ly higher efficiency in your business!and efficient IT infrastructure. However, in my help save cost along with acquiring The tipping point in getting on toknowledge, there are a few Barter Exchanges new customers, offer interest-free fi- barter system is in considering thein India including us which plan to offer nance with no cash repayments and barter system as equivalent to cashfranchises in near future, as the volume of promote local business; the barter of- system and give it the same impor-members is going to explode. So only till that ten comes at a cost. You may feel the tance. Only then, youll be able totime, entrepreneurs will have to wait. pinch of the membership fee which leverage its benefits. r dAre.co.in | xx x xxxxxx | AUGUST 010 
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