The Oakland Raiders recently found a way to fill empty luxury boxes at the Oakland Coliseum. They traded them for an expensive digital billboard campaign by tapping into an age-old trade system: bartering.
As the economy skids, companies are brainstorming ways to keep down costs and use up surplus goods.
That is good news for the commercial bartering industry, which accounts for more than $10 billion in annual sales -- up from $8 billion in 2004, according to the pro-barter International Reciprocal Trade Association.
Now, the ancient system has gone high-tech and middlemen like BizXchange LLC are bringing businesses together, acting as bank, marketing company and record keeper. They are changing the ''no-cash'' model for everything from restaurants to newspapers.
The Seattle.-based company of 30 employees has offices in Oakland and Dubai. It counts 1,500 members in its network, including the Raiders, the Golden State Warriors, Oakland A's and the Grand Lake Theatre.
Some were members before the economy tanked. Now they can use BizX, founded by President and Chief Executive Officer Bob Bagga in 2002, to get their hands on services and goods despite the credit crunch by tapping into a web of businesses that swap commodities.
''Business begets business,'' Chief Operating Officer Chris Haddawy said recently in the company's modest sixth-floor office near the Oakland-Alameda County Coliseum. ''And word-of-mouth business is another benefit.''
Clear Channel and the San Francisco Examiner are members, according to the BizX Web site, as is Diablo Magazine of Walnut Creek, which barters unsold advertising space for printing, promotional products, equipment rental, awards and flowers. (The Oakland Tribune is not a BizX member.)
Other businesses have less use for bartering on a day-to-day basis. Kiri Eschelle, co-owner of Levende restaurant in San Francisco and Levende East, has vendors for everyday needs. But she used BizX to pay for building costs when the restaurant opened the Oakland location in the summer of 2007. That helped save cash for other costs during the expansion.
Likewise, Jeff Davis, owner of Fellini restaurant and cafe in Berkeley, said he used his ''BizX dollars'' to pay for plumbing work, going to other restaurants and vacation spots. Otherwise, BizX members, he said, have filled tables that otherwise might have been empty.
With BizX, there is no cash flow, at least not in greenbacks.
Members of the barter community can trade with fellow members or apply for a BizX loan that they pay back with products or services. Members, however, pay what anyone else would pay, including taxes.
BizX charges a one-time fee of $595 or $795, a transaction fee of 6 percent to 7.5 percent on each sale and purchase, and a $15 monthly membership fee -- also payable in ''BizX dollars''.
The company is growing, with a 17 percent profit over this time last year, according to Haddawy. He said BizX tries to put its revenue into hiring more employees who work to build a bigger network -- something that several members said would make their membership more useful.
BizX targets restaurants, vacation properties, electricians, plumbers, roofers, wholesale wine and coffee merchants -- products and services in demand by network members and the public, Haddawy said.
The businesses must have surplus to trade, though, to be attractive. A network and a reserve account help cushion the crash of defaulting businesses -- about three to four monthly of late, according to Haddawy.
''In an economic downturn, you can ignore the surplus and hope things get better,'' Haddawy said. ''Or you can do something to monetize it.''
debbie@bbubarter.com
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