Is Online Barter A Viable Business Model?
June 15th, 2007 · by Bob Meyer · 5 CommentsFor years now there has been a lot of speculation that online barter would be a natural, a real winner of a marketplace. After all, eBay was an immediate hit, enabling every online home in America an opportunity to become a virtual swap meet or antique store, where one could turn unwanted items into cash.
Bartering these same items online seemed a natural. Many have tried, and have built some impressive barter sites. Yet more often than not, they limp along with two few users, and as of today they haven’t made much of an impact. And a lot of them have disappeared.
Is the swapping of music, video games, movies, CDs, DVDs, college books, (in other words the products) the problem? Or is it the low cost (value) of the merchandise at fault? Is it worth the effort involved? Or is it a trust factor, concern about the other party involved, reliability and deliverability?
What do you think?
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June 21st, 2007 at 3:53 pm
Although barter is as old as business itself in most countries, the barter exchange concept in the USA is almost invisible to the masses.
Until we see a true synergy and cooperative effort over an extended period of time in America, barter exchanges will continue to flounder in a sea of inefficiency, making no noticable impact.
The art of barter generally requires a system and a system requires trained people to assist the members or subscribers. Look at the current trends relating to customer service. Most of us want to talk with real people. I would bet that 95% of our population wants their hand held and this is the main reason that on-line systems without barter brokers don’t work.
There is a fraction of our known universe (5%) that have the sophistication to trade on their own. To hit the larger market and make an impact, you have to have customer service people that we call brokers or trade directors.
June 22nd, 2007 at 6:14 am
I heartily agree with Mathews’ comments above.
We are not yet at a stage where trade exchanges talk to each other properly never mind talking to the general business market in any coherent shape or form as to provide confidence to them that commercial barter works.
Until all trade exchanges accept each others trade dollars willingly in a united effort free from politics aka NATE et al; then we are doomed to flounder around picking up the edges of this fantastic potential market.
Trade exchange systems must still allow trade exchange owners direct contact with each other to facilitate members requests and desires.
July 12th, 2007 at 9:19 am
My friend Matthew states that only 5% of members are able to trade on their own but that statistic seems to run contrary to the tens of millions that use eBay and Craigslist successfully.
Far more than 5% have the ability to trade on their own. Could it be that they don’t find it worthwhile to invest the time?
July 12th, 2007 at 4:03 pm
Everyone works in their best interest. As the value of trading through trade exchanges increases, so will the growth of the exchange. And, aggregately, the commercial barter industry.
Trading direct has advantages (but also usually requires more work) in that “values” are subjective…and that’s where (and why) some extremely profitable deals occur. (Example: The trading of the red paper clip–in 15 moves–for a $50,000 house.)
The value and power of working through a trading network revolves around the fact that one possesses a “currency” and has multi-lateral opportunities to spend said currency (trade dollars) through the network.
July 19th, 2007 at 9:20 am
Responding to Carl, I want to re-enforce my point about on-line BARTER. EBay is a CASH marketplace at steep discounts more frequently than not. Craig’s List is largely a CASH marketplace as well. The menial amount of “garage sale” barter available on Craig’s List is not worth mentioning. Please, let’s make sure we compare apples to apples.