New York, NY (PRWEB) February 19, 2006
After contacting 1,000 merchants at random across all 50 states, another 500 merchants in the eleven provinces of Canada, and 500 merchants of Mexico City, between November and December of 2005, the North American Barter Association has released it’s 2005 barter survey results with some surprising revelations as follows;
Barter exchanges that require partial cash payments or requiring merchants to make monetary deposits in a “security account” had the most complaints and allegations of fraud. Conversely, the few barter exchanges that are pure barter with no cash had the least complaints.
National barter exchanges had order fulfillment rates that averaged 86% while regional exchanges averaged 79% and local exchanges only 71%.
Less than 2% of all barter transactions in North America involve complaints, and 74% of these complaints involve price gouging or hidden fees, while a full 15% of merchants were irritated by their inability to speak directly to a human being at their exchange about problems and were forced to wait days and even up to two weeks for e-mail replies. The balance of complaints were related to delayed deliveries or product deficiencies.
The actual complaint rate was 1.78%, which is less than one-tenth the complaint rate in the automotive industry, one-fifth the complaint rate of the retail industry, one-third the complaint rate of the travel industry, and one half the rate of the construction industry.
78% of merchants surveyed expressed “great satisfaction” with their barter exchange, 12% said they were “adequately satisfied”, and 10% indicated they were “not satisfied”.
In 2005, merchants surveyed claimed they saved an average of $45,000 via barter and had an average cash flow increase of 17.2% using barter.
In 2005 the average consumer barter transaction was $158 while the average commercial barter transaction was $16,493.
32% of all commercial barter transaction were media-related and mostly advertising, while printers accounted for 12% and the travel/hospitality industry 10% of all barter.
Of the 679 active barter exchanges in North America, 543 of them are internet-based and over 85% of all complaints are attributed to these exchanges. 112 of them were suspected to be fraudulent and reported to the U.S. Federal Trade Commission by NABA for investigation.
The average age of existing barter exchanges in 2005 was 4.7 years.
An estimated $28.9 billion of combined commercial and consumer barter transactions occurred in 2005 with 63% of Fortune 500 companies accounting for 67% of this total.
Continental Trade Exchange and Midwest Barter Exchange were tied for best-rated consumer barter, while Merchants Barter Exchange came out on top for commercial barter. Not surprisingly, these three exchanges had the fewest complaints as well.
While less than a dozen exchanges have been around for more than a decade, Merchants Barter Exchange is the fastest-growing barter exchange and according to merchants surveyed has the most diverse goods and services list. ITEX stands out as one of three barters exchanges that is a publicly traded company and is also one of the oldest.
While 97% of the barter exchanges are regional or local, only a handful including Continental and Merchants Barter Exchange offer nation-wide coverage and apparently control a lion's share of the U.S. barter market. ITEX earned high marks for service in local markets.
Only three exchanges had order fulfillment rates of 90% or more; Merchant's Barter Exchange, Barter Master, and Midwest Barter Exchange.
Some universal complaints centered around professional services and the over-abundance of chiropractors, massage therapists, and dentists while most merchants clamored for more skilled tradesmen.
Less than 3% of all merchants surveyed expressed any regrets about joining the world of barter.
Only 62% of all barter exchanges belong to a barter association like IRTA, NABA, or NATE.
On average, merchants surveyed said they increased their barter trade by 13% in 2005 and 26% over the last three years.
Based on the above survey results, NABA offers the following advisory to merchants contemplating joining a barter exchange or changing to a new one;
- Ensure that your barter exchange belongs to IRTA, NABA, or NATE.
- Avoid exchanges that exist only in cyberspace with no actual offices and access to staff by telephone during normal business hours.
- Find yourself a pure barter exchange that requires no cash in their barter transactions or proceed at your own peril.
- Use only a barter exchange that offers protection against price gouging and discloses all their fees up-front.
- Use only a barter exchange that guarantees your satisfaction in writing.
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