Barter is a widely accepted means of transaction wherein no money is involved, rather the companies exchange their goods and services for trading. It is also called counter-trade, which is helpful for those companies or businesses that have fewer financial resources but plenty of commodities to trade in. Barter trading has immense opportunity in India as the corporates are adopting innovative measures to over ride the effects of recession. Barter thus puts away the money out of equation and creates a cashless trading.
Role of franchisees in barter trading
The key role of the franchisees is to facilitate the transactions among the new members. They recruit members to the trading system and service their needs on a day-to-day basis. The members have a trading account for the purpose of recording their transactions. The franchisee credits or debits the account each time a member makes a sale or purchase, respectively. Also, the account is debited for the membership fees that the trade exchange charges its members. The trade exchange may buy and sell in its own right, acting as a member with its own trading account.
Basically, the franchisees act as a third party record keepers just like a bank to facilitate the transaction between the various members. India, being a virtually untapped nation in the barter trading sector offers immense opportunity to the prominent international players of this domain.
With an aim to provide barter solutions to the small and medium sized enterprises, BBX forayed in India in November 2008. BBX India is the pioneer of retail barter in India that facilitates the SMEs to trade cashless and thus creating a barter economy.
Origin of BBX
BBX (Business Barter eXchange) is an Australian based public listed company, established by Michael Touma in 1993. He started this company with an aim of providing a trading platform to help businesses complement barter trading to their existing cash cycle. He believes that through barter trading, the businesses can reach to their maximum potential and start capitalising on the under utilised capacities of the business.
Growth of BBX across the globe
The company has taken the franchise route around eight to ten years ago to expand the brand across the globe. Now the company has presence in four countries (Australia, New Zealand, Costa Rica, and India) and is planning to enter the fifth country (Singapore) in the coming months. The company is serving a base of over 7, 000 barter system businesses worldwide. The company entered India after tying up with ‘Net4barter’ (pioneers of corporate barter in India), thus providing the new franchisees a range of bartering options with small, medium and corporate level businesses. BBX India is now operating through three franchisees, one each in Delhi, Mumbai and Uttar Pradesh. It is providing a platform for B2B exchange where businesses can come and interact with each other and barter all their products and services.
Franchise requisites
To become a part of this emerging concept in India, franchising is the easiest way out. However, taking up the franchise of any barter company, aspiring entrepreneur requires the following criteria:
- A well educated aspirant with a professional background in finance, banking, or insurance
- Sales experience is preferred but is not a criteria to select the franchisees
- Financially sound enough to support the business that requires an investment of eight to twelve lakh rupees
- Good communication skills are essential as the franchisee has to converse with clients and convince them regarding the benefits of barter trading
Benefits of taking up a barter franchise
Once, the aspiring entrepreneur qualifies the eligibility criteria and signs the franchise agreement, s/he enjoys a number of leverages that company provides. BBX offers its franchisees the choice of their own territory of operations, flexibility, unique business propositions, and availability of unrestricted customer base. It also offers:
- Interest free trade rupee credit to initially facilitate the establishment of the business
- Dual income in terms of new member introduction commissions and on-going trading commissions.
- Facilities for online barter services
- Best available IT software support
- Ongoing sales support and service trainings
- Low overheads and operating expenses
To summarise, barter trading is a wonderful concept for small and medium sized enterprises in India to generate good capitals out of the limited resources/ capacities of the business. So far it is the best business proposition that can over ride the effects of downturn economy. Being an aspiring entrepreneur, it can be a lucrative opportunity for you to get started in the bartering business and grow up with this new concept.
