21 September 2016
From markets to barter advertising
Since 2008, when the economic crisis began, bartering has been the focus of numerous studies and analyses because of its increasing popularity. In fact, this ancient habit of exchanging goods and services without money had already made a comeback in the 80s, pushed by the advertising industry. The bartering mechanism is based on a simple concept: a company willing to invest in advertising would sells its products to an intermediary, in exchange for planning and purchasing the commercials for an amount equal to the value of the goods sold. Invoices compensate each other without cash transfers, and therefore with tax advantages.
“Barter practice”, says Giorgio Ferrari of MP7Italia, a leading firm in advertising barter, “always works, beyond the crisis. It worked in the ‘90s, it works even more so in an environment of low liquidity and full storages”. And, differently from one might think, it is not just small and under-capitalized companies that use barter, but also larger corporations that have stale inventories and dormant products.
Over the years, barter's applications have extended well beyond advertising and someone has even developed a system allowing companies to exchange products through an online platform. The main figure in developing this idea was Paolo Arnello, who has been dealing with multilateral barter for corporations for the past twenty years.
In 2011 he founded iBarter, a platform with more than 700 companies across all product categories. This platform allows its members to exchange products or services with others, with no handling of money. “If I am a glasses manufacturer and I have a production cost of 50 cent per glass, I would sell it for 1 euro”, explains Arnello. “When I have to make purchases for my company and I have two or three potential suppliers to choose from, if any of them asks to be paid with my glasses this would obviously suit me, because it saves me half the cost”.
This business is of course not new, thanks to websites dedicated to private bartering. In Italy, for example, there are websites such as coseinutili.it, barattopoli.com or zerorelativo.it. The US website Swap.com classifies the objects to be exchanged by categories and allows you to search the desired object by geographic proximity. The English website Swapit.com is instead dedicated mainly to teenagers, whilst Swapstyle.com is one of the many websites devoted entirely to clothes swap, that is, to barter clothes.
Not all exchanges, however, take place online. The swap parties, originally from New York but spread everywhere nowadays, are the glamorous version of neighborhood markets of comics exchange. They are almost entirely dedicated to the apparel and indeed they are organized during season changes, when the wardrobe needs to be adapted to the new weather. From clothes to shoes and accessories: a convenient way to recycle and rebuild your wardrobe. But also mobile phones and small appliances. Of course all promoted through a massive social campaign.
Re-using clothes and textiles is so handy that it has reached the stores too. Over the years, several international clothing chains have launched initiatives whereby bringing your used clothes would earn you a voucher to use for your next purchase. The unused clothes would then be re-adapted for another purpose or processed to fuel energy production.
A prosperous future lies ahead for what is, in fact, the oldest economic transaction in the world.