Barter Networks Helping Businesses To Grow
13 JANUARY 2013, BIELLA, ITALY
SummaryAccording to a recent report issued by the UK Government, barter companies conducted barter transactions worth more than US$16 billion in 2010, with the UK headquartered Ormita Commerce Network (www.ormita.com) handling approximately US$2.86 billion of this value from its offices in 21 countries.
Milan, 13th January 2013. According to a recent report issued by the UK Government, barter companies conducted barter transactions worth more than US$16 billion in 2010, with the UK headquartered Ormita Commerce Network (www.ormita.com) handling approximately US$2.86 billion of this value from its offices in 21 countries.
The Ormita barter concept arrived in Italy almost twelve months ago and already has 2,600 member businesses across the country. Ms Cinzia Gremmo is the CEO of the local Italian office and handles operations with many staff.
“Although companies do bartering one on one, many deals are conducted via membership networks in barter companies, trade associations or commerce networks; where technology and tracking software have modernized the centuries-old system,” says Ms Gremmo. “Instead of using direct barter, we've created a large network for businesses - small and large - to exchange products and services."
In multilateral barter, exchanges do not need to be direct. Instead three, four, five and six-way transactions are possible. Transactions can also take place at different times so no single supplier needs to “swap” their product or service immediately but can do so over a period of time. In these instances the value of the deal is recorded centrally and the process managed by a barter exchange organisation like the Ormita Commerce Network.
“Nearly every business faces the problem of cash flow management. Issues that contribute to the need for cash flow management include highly competitive markets where constant advertising is a mandate, increasing business expenditures to attract consumer attention, planned or unplanned downtime, perishable inventory and the necessity of discounting inventory. Modern, multilateral barter helps businesses alleviate the affect of these problems,” says Ms Gremmo.
Ormita operates an accounting system with a virtual value unit ("barter dollars," for example) to measure and balance exchanges. 1 barter dollar = 1 euro in value. When a sale is made, the members account is credited. When a purchase is made, the members account is debited. The sum of all accounts in the exchange equals zero – so there is always something to buy and there is no inflation in the network.
According to Ms Gremmo: “Whenever someone is in credit, there is always one or more businesses in debit to an equal amount elsewhere in the system. It always balances out.”
With the economy being so tight that businesses were looking for alternative ways of attracting new customers and getting things done without spending cash – multilateral barter may be one such solution.
Ormita Italia s.r.l
Via Trossi 11
Telephone: +39 15 952 6193