Anybody reading the headlines these days knows the world teeters on the biggest worldwide recession in modern history and our leaders are scrambling for solutions. It is very timely that I recently had the opportunity of interviewing Mr Steve Bolles, founder and President of Merchants Barter Exchange, one of America’s great innovators of economic change and stability right now. Bolles is far from reclusive, but rarely entertains interviews, however due to the seriousness of the current global crisis he extended this offer.
For those unfamiliar with barter, what is Merchants Barter Exchange and what does it do?
Historically barter is the one-on-one exchange of similar or like-valued goods or services instead of using cash or currency. Merchants Barter Exchange is an ever-growing national network of diversified business owners that utilize the simplicity, ease and efficiency of our MBE-barter system to trade for multiple hard goods and services at the same price as cash with other members of our network. In short we have created an alternative payment mechanism for business owners to turn what they have too much of (time, inventory, or capacity - in essence their inefficiency) into positive revenue, increased cash flow, better marketing, and save a bunch of cash as they do so.
What was your inspiration behind Merchants Barter Exchange?
Back in the 90s I had another business and was a member of an older and very different kind of barter company. The more I used their antiquated mechanism, the more I noticed many flaws and huge areas of improvement. They had no systems in place to prevent people inflating the price of their goods or services, or price gouging, they also charged when a client bought and when they sold, they didn’t seem to have much control over how people traded and with whom, and even allowed members to pay part in cash and part in trade, which didn’t seem to make any sense to me. Most of the other members I dealt with were very unhappy with the overall system. That’s when I started to look for a better barter company, but after extensive research I discovered that every single barter company had the same flaws and challenges.
So what did you do to make Merchants Barter Exchange so different?
Firstly, we centralized the control and the membership list. This allowed us to ensure we only sent members brand new business and were not converting cash clients to trade clients. It also ensured we had secure systems in place to stop people charging more than they would for a cash transaction. It didn’t make any sense to pay more because it was barter, as you lost all the economical benefits. Since we have the control, we are able to expel any member that should try to break the rules that keep our system running effectively. Secondly, with control of the integrity and value of the MBE-barter dollar, it allowed us to do large and small trades for our members. I believe we are the only national barter company that can brag the ability to do $100,000 printing jobs 100% on trade with no cash element. Thirdly, since our system worked so well, we expanded very rapidly and needed to develop a solid and ongoing direct sales division to ensure we were able to meet as many of our members needs as we could. To date I think we have the best fulfillment rate and the greatest client retention rate (95%) of any barter company in the US.
What are you currently doing to ease the crisis in the US economy?
Even though we have grown steadily since we began in 2000, we are nowhere nearly as large as I would have liked us to be by now to help the millions of small business owners around the US, and around the world that can benefit from the MBE-barter system. Right now we are working on rolling out our corporate licensing program as fast as we can to reach as many new businesses and as many new cities around the US as we can. The major challenge has been screening the right entrepreneurial candidates that not only have the investment capital to buy in, but have the right morals, ethics, and responsibility for us to allow the priviledge to own and operate a local sales region. We are helping all those we can right now and improving the lives of our members and people in their communities, in time we will help increasingly more individuals.
Looking to the future, do you have any plans to expand beyond the US?
Absolutely! Our primary focus obviously is to assist the American business owners right now, however we created our business model to be a global monetary alternative. We already have interest from other countries around the world eager to implement our system into their economies. When the time is right we’ll definately expand internationally. Everything in good time.
I also heard you’re working on a book, is this true?
Yes. I’ve been co-collaborating on a book about the industry and the major differences and functions of the MBE-barter system with a close colleague in the industry. Right now we have more pressing issues to deal with and the book project has taken a slight back seat. We’ll finish it in due course, but it’s been an interesting project to work on.
Screenshot from Merchants Barter Exchange. This interview is by Richard Eyre.
Jaclyn on November 8th, 2008 at 8:30 am
I think the barter system a cool idea for business’. i think actually it may even prove to be beneficial to the public if it was attempted by the owner. now a day’s everyone is looking for way’s to save on money or to make money or get thing’s done without it costing them an arm and a leg…i think the barter system could help them with that and thus cause better business for the barter system if expanded to the public.
pututik on November 8th, 2008 at 10:19 am
old concept maybe, but maybe US crisis need improvement like this. because i imagine in my old country before, they live like in heaven although barter are only the choice of payment.
Liz on November 8th, 2008 at 12:30 pm
My former boss used to use bartering quite a bit. He got some GREAT deals which he would not have been able to get had he insisted on the old ways of doing things. I like to think of it as adapting to changing circumstances, which I believe our current economic conditions call for. It’s time for a new business model. Darwin Gillett has written a book on that topic, “Noble Enterprise.” It’s great. With the issues of corruption within the banking industry, financial companies and politics, we need the perspective, enlightenment and guidance we can find in this book. Give it a look!
cassy on November 8th, 2008 at 5:45 pm
As we all know bartering is not new in our ears. Even before, our ancestors using this kind of system in their business by exchanging foods, personal belongings and other things that can be used in their daily needs.
I think this is the nicest way or form of a business.
Anthony Donnelly on November 9th, 2008 at 12:00 pm
I actually own a few MBE locations and have to say it is one of the most lucrative business propositions I’ve ever been involved with. Obviously the financial benefits are great, but what really excites me is the way we are able to help multiple business owners through these hard times right now. The MBE-barter system is definitely a business whose time has come.
CoolProducts on November 11th, 2008 at 4:39 pm
I think it a very great idea and can see its implications on a wide range of scales!
@ pututik - I believe we’ll be seeing a shift towards many old concepts in ways to combat with the crunches that we are facing today.
Claudio Laparade on December 8th, 2008 at 10:54 am
I am actually very concerned about MBE. As far as I understand it they are not a member of IRTA or NATE or any reputable organization. Their director has two different names. They have no profiles of any other offices or directors on their website and they totally lack any decent (verifable) corporate information on the net which has not been generated by themselves.
Any good due dilligence would show this. Self-generated publicity is one thing but getting involved with people whose names are not even readily available is worrying. I also worry that for having “sold” so many franchises i cannot find a single location on their website other than their main postal address.
If these franchises and businesses are so lucrative why are they not listed?
Personally our company uses ITEX and is also a member of DoBarter and we have been watching Ormita as well http://www.ormita.com which seems to be more of a green currency / community based. Itex is good. DoBarter is not so great (because our exchange we were a member of collapsed and it went straight under Dobarters umbrella now so very little support and having to deal with a grumpy software guy allt he time) and Ormita we are keeping a close eye on. I like barter exchange companies but I have been really hesitant about Merchants Barter for the above reasons.
I went to a NATE conference last year and an IRTA conference to understand more about the industry itself (as media companies such as ours are always approached with barter offers every day). No one had much good to say about Merchants Barter Exchange. On the flip side - neither conference was organised very well itself… so.. who knows..
Anthony Donnelly on December 16th, 2008 at 10:51 am
Claudio,
I’m very concerned about you. I’m not sure where you are - or more importantly are NOT - looking for information about MBE. You got a nice plug in for your company, though.
To fill some of your knowledge gaps, there is only one principle (did you read about him in the article you posted to at all?) As far as NATE and IRTA are concerned, they are not ‘official’ barter organizations, the only authority over the barter industry is the IRS. And, as you say, their events weren’t particularly well organized - what benefits do they bring?
MBE does barter in a completely different way to almost every other barter company out there. They aren’t well liked in the industry, but that’s what appealed to me about them - when you do something better than everybody else that’s done it for longer, you don’t make many friends!
Email me if you want any more real facts you find hard to find.
Great interview, btw. Richard.