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Trading Places
Barter Network sold to San Francisco firm
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Business New Haven
11/29/1999
By: Linda Mele
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The Milford-based Barter Network Inc. (BNI) has been acquired by BarterTrust.com of San Francisco, Calif. for an undisclosed sum.
BNI was founded by Raymond J. Bastarache in 1985 as a business-to-business barter exchange. Since then it has grown to $36 million in annual transactions with offices in Cheshire, Massachusetts, New York, Rhode Island, Delaware, Maryland and Virginia.
BarterTrust.com is a new, venture capital-backed company seeking to establish the worldwide, secure, business-to-business electronic barter trade network for companies and trade exchanges. BarterTrust.com business plan asserts that the company “represents the future of non-cash e-commerce: a true electronic currency.”
President and founder Bastarache confirmed the sale to the
privately-held company and said he eventually might add as many as 30 employees to his workforce of 20.
The barter principle is simple: For a yearly fee, members of a trade group
can barter or exchange goods and services with other members or members. BNI employees facilitate the trades and handle the paperwork, including filing reports with the IRS, since exchanges must be reported as income.
Trades may also be “banked” for later use and can be bartered for any goods or services listed with the exchange or reciprocal exchanges.
According to the International Reciprocal Trade Association, more than $16 billion in goods and services was bartered nationwide last year, and some $64 billion was bartered worldwide.
While barter has been a successful and rapidly growing form of commerce for years, traditional barter businesses like BNI have been limited with what they could provide their customers.
In the past, executing trades between exchanges hasn't been easy, but the new Internet service promises to be a “customer-oriented, efficient,
technologically sophisticated, geographically dominant force to lift non-cash e-commerce to its full potential,” according to BarterTrust.
BarterTrust President and CEO Mike Edelhart says Inbar Inc. was formed last spring, and BarterTrust.com created only this fall when the company acquired three leading barter exchanges.
Edelhart says the Internet makes possible “economically sound, cashless
business-to-business barter for the first time in the history of American
trade.
“Thousands of U.S. companies currently use cashless barter to acquire valuable goods and services while preserving cash,” Edelhart explains. “The Internet enables companies of all sizes to exchange goods and services at full economic value within a safe, financially-backed network. I expect the Internet will revolutionize the business-to-business barter industry as much as the personal computer has transformed American business.”
BarterTrust.com works with leading trade exchanges and major
international corporations, according to Lise Olson, the company's director of corporate communications. It is the first nationwide barter network in the U.S., with nearly 8,000 member trading companies, 12 regional offices and 1999 revenues of $10 million.
Earlier this month, BarterTrust acquired the Barter Business
Network (BBN) of Reno, Nev., BarterCorp of Chicago, and BNI.
Bastarache assumes the position of vice president of barter development for BarterTrust.com.
“Long-term, the BarterTrust.com network will strengthen the barter industry, making it desirable for more companies to participate in legitimate barter in the U.S. and globally,” Bastarache says.
According to Olson, there are no plans to relocate or substantially change BNI at the present time. “We bought these exchanges because they were successful, and we want them to stay that way,” Olson says.
- Linda G. Mele
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