FAQ
Why do companies barter?
Almost every business faces the daily conundrum of cash management and perishable items: newspaper pages without ads, vacant airline seats, and inefficient production facilities. Barter involves the creation of a market in which available products and services can be offered at full value to thousands of potential business buyers in a trading network, or a barter exchange. These sales use a non-cash currency, which participating companies can use to buy anything listed within the exchange. In this way, a barter exchange delivers two benefits to businesses: sales at full value and the ability to acquire valuable products and services while conserving cash.
Why use trade dollars instead of cash?
Maximizing cash flow is a top priority of all businesses, small and large. Using trade dollars is an alternative to using cash, which helps businesses conserve cash. You can earn trade by selling available inventory or staff time, and you can spend your earned trade dollars to pay for products and services you need to run your businesses.
Is barter widely used in the United States?
The International Reciprocal Trade Association estimates that $16 billion worth of products and services were bartered in the United States in 1998. The worldwide barter industry, by some estimates, exchanged as much as $65 billion worth of goods and services.
Is business-to-business barter just another form of auction?
No. In an auction, sellers are unsure what value they will receive for their merchandise. In a barter transaction, the price of the products and services is determined by the seller and must be met by the buyer. Thus, companies realize the full value of the products and services they barter.
Is barter another way for companies to liquidate items at low prices?
No. There are businesses whose sole purpose is to relieve companies of distressed inventories by taking ownership of those inventories using various forms of non-cash credits. That is very different from what ITEX does. We offer every business a full-value marketplace for members eager to spend trade dollars into which they can move merchandise, making it available for sale to all the companies that belong to the ITEX network. We offer members a non-cash alternative they normally would not have for selling merchandise at full market value.
How much does one pay to be a member of ITEX?
In Sacramento the it is currently open enrollment, this means the $995 application fee is waived There is a 12 percent cash fee on transactions, six percent when you sell and six percent when you buy. Association fees are $20 cash and T$10 trade per four week accounting cycle.
Who do I contact if I need customer service?
We are reachable by phone (800)665-8567 or you can e-mail us at info@itexsacramento.com
How do I know my information is safe?
Our highest priority is protecting your confidential information. To achieve secure data transmission and storage, ITEX uses advanced security systems and practices.
How will I benefit from being an ITEX member?
In many ways:
Grow your business and improve your cash flow. You can grow your business by selling available inventory or staff time, and you use your earned trade dollars to pay for items typically bought with cash and thus enhance your bottom line.
Barter both online and offline. Do it yourself online or use our professional trade brokers to trade offline. Experienced ITEX brokers are available to provide assistance when needed.
Create new alliances. As an ITEX member, you are able to trade with a large network of businesses-locally, regionally and nationwide.
Gain new customers cost-effectively. Find new suppliers easily.
Leverage your investment in inventory and staff.
I purchase everything wholesale. Why would I want to buy products and services through ITEX?
Several ITEX members have established business relationships. We don't require that you change your relationships. We help you expand your customer and supplier network. Because few businesses can get everything they need wholesale (such as advertising, airline tickets, restaurant meals or contracting services), ITEX is a convenient venue to conserve cash.
How does ITEX help me conserve cash?
Here's an example. A store may sell a product for $100 cash or 100 trade. The product cost is $50 with the balance of the price covering overhead expenses, which are incurred whether or not the product is sold. The store sells the product for 100 trade, then uses the ITEX network to purchase goods and services with 100 in trade dollars, rather than cash, thereby netting a $50 cash savings.
Will ITEX help me find new business?
Yes. We already have thousands of businesses in the ITEX network. Your listed products and services will be exposed to all of those prospective buyers. Be sure to keep your listings current, so interested buyers always know what you have to offer. And, once you establish your account, you can speak with a trade broker who can help you develop a plan for getting the most out of the network.
Do I need to pay taxes on my ITEX sales?
Yes. Sales made through ITEX are subject to the same tax treatment as cash sales. We recommend you contact a qualified tax consultant for further advice.
How do I handle ITEX fees? Can it be a tax write-off?
ITEX fees are similar to other expenses incurred in normal business operations. We recommend you contact a qualified tax consultant for more information.
Will I have to worry about accounting and tax reporting issues?
Members receive a statement of activity each month. At the end of the year, you'll receive a Form 1099B from us to make tax reporting easy. ITEX will also provide a copy of your Form 1099B to the IRS, as required by law.
How does the IRS view barter networks like ITEX?
The IRS classifies barter companies as third-party record keepers. Thus, ITEX has the same reporting requirements as banks and stock exchanges. Each year, members receive a Form 1099B that reports their ITEX sales (US $1.00 = 1.00 trade dollar). A copy of the member's Form 1099B is also sent to the IRS, as required by law.