Barter : The return of the world's oldest business model …


Principles :

The Barter business model refers to the act of exchanging goods/services between two or more stakeholders. This model is based on a simple process: two people negotiate and determine the value of their goods/services and exchange them.

Advantages & Challenges :

One of the advantages of this model is that no money is spent. It is also an effective solution to avoid inflation and to optimise cash flow since this model does not create a mismatch in cash flow. On the other hand, this model encourages the use of short circuits. The challenges related to this model are linked to the very nature of the exchange. The actors are looking for equivalence in the goods exchanged. Either object A must have the same value as object B in terms of willingness to acquire. To barter there must therefore be a double coincidence of needs; object A must be desired by the first actor and object B by the second.

Evolution of the business model & maturity (key figures) :

Barter has experienced a real boom with the Internet and the sustainable revolution. This has given a new dynamism to this business model. The Internet has increased the number of potential players, and above all simplified and accelerated exchanges. The sustainable revolution has also demonstrated the relevance of barter in certain situations, with the use of shorter circuits. IRTA indicates that volumes thus grew at a rate of 8% per year during the second half of 1990. IRTA's forecast indicates an annual increase of 15%, mainly due to online bartering, for the next few years. IRTA also suggests that $12 billion was traded between companies worldwide in 2011, with more than $6 billion in the Americas, $2 billion in Europe, the Middle East, Asia and Oceania. Besides, the institute estimates that between 1,200 and 2,000 companies would offer business-to-business trading systems worldwide.

Product & Services adapted to this business model :

There is a wide variety of products or services that can be bartered, here is a non-exhaustive list: durable consumer goods (including household appliances), toiletries (toothbrush, razor blades), cosmetics and make-up (foundation, eyeliner, lipstick, gloss), physical fitness and health care (sports equipment), entertainment (movie tickets, musical instruments), office (exchange furniture, computer products).

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