In the Editor’s Note of BarterNews issue #64, dynamic changes were alluded to within the business marketplace during the last 20 years that have caused vastly different clientele for the trade exchanges. The landscape has continued shifting, and today’s typical exchange has a preponderance of service businesses as members.

Now, in addition to changes such as consolidations and franchising booms, the barter industry must be aware of another growing competitor…technology. Coupled with cash, the historically major rival of barter, it portends additional challenges for the industry.

The insidious effects of technology can be observed in the efforts of Craigslist (a classified-ads site which saw online barter postings of 63,000 in April 2007, double the postings of April 2006) which focuses on metropolitan areas, eBay’s push into the battle for local listings, and the ubiquitous Google with its new service, Google Base.

What does that mean? A major shift is underway in how consumers and small business owners shop for local services. The age of online discounts and coupons is here…along with an added ingredient.

Everyone will be able to see multiple offers at a glance and get a better sense of the best-available overall prices. Therefore providers will be forced to compete more aggressively. This will greatly effect pricing and competition among local businesses, even within the local trade exchange. All will be competing against the money-saving web opportunities that include rebates and print-your-own coupons.

As the small business owner astutely compares the competitive cash pricing in the marketplace against the exchange’s full retail (sometimes inflated) pricing, not to mention commissions paid to the exchange, the difference could be startling. So the barter industry must take note.

As Peter Drucker often said, “Nothing is predictable except that today’s profitable business will become tomorrow’s white elephant.” The business model followed today by those in the barter industry is the same as it was back in the early nineteen-sixties. Much has changed in the marketplace since then…is the industry up to the task?

What do you think? (Scroll down to send in you comment.)

This entry was posted on Friday, June 29th, 2007 at 11:46 am and is filed under Industry News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.