–Contributed by Vivin Wason

A totally new introduction by the Australian giant Bartercard, which presently leads the trade exchange across the globe, might just change the way retail trade is done in India. Bartercard is planning to foray into the Indian retail market through a subsidiary and plans to have its operations in place by February 2008. So what is Bartercard all about? A barter card transaction though similar to a credit or debit card transaction differs on just one parameter, its cash less. The bartercard would be used to record a transaction and the goods or services purchased. The buyer would then balance the transaction by providing his goods or services.

It can instrumental in saving costs for small and medium enterprises as the amount spend would not need to be recorded in the books. Hence, would help in improving the cash flows of the company as the company could trade for their excess stock within the bartercard network and in turn get services or goods from the party whom they have been sold to. The company has aggressive plans of making 3,500 members in the first year itself, eyeing mostly small and medium businesses.

The question that arises here is that whether it would be useful in getting new business or acquiring a new contract. Probably beneficial when it comes to trading with existing customers or with people at various levels in the supply chain, but would be of interest to some getting into a new business dealing with your company. It could not be termed impossible but it might certainly be a difficult. A few reasons which I could think of are – firstly, the goods and services exchanged should exactly cancel each other in terms of value derived for both parties. An instance for this could be a retail company exchanging its goods with turnkey display Solutions Company. Though the service provider would have a certain cost attached to his services but it could be difficult to gauge whether the service would fetch the retailer the returns which he would expect. Secondly, it might become cumbersome with a restricted Bartercard member list to find out partners with whom a productive exchange of goods and services can be made. Finally, the concept of using a bartercard would be difficult to comprehend and apply profitably by small enterprises as it would involve a clear understanding of the valuation of one’s own goods or services viz a vie other’s.