BizXchange brings businesses together and offers them a way to barter their goods and services. Ajay Goplani, the company's general manager for the UAE, explains the benefits of the system.
So how does BizXchange work?
We are a business-to-business barter exchange. We make it possible for companies to trade their goods and services within the network without using cash. Transactions are settled primarily in the form of BizX trade credits, which are equal to the local currency. This allows the buying company to preserve cash and reduce budgeted expenses. The selling company can use up spare capacity and excess inventory, and gain market share. Every member company has a dedicated account manager who develops bespoke transactions to satisfy their needs. Our members also have an online account which helps track debits and credits.
Is bartering popular?
Yes. The International Reciprocal Trade Association estimates that 30 per cent of the world's business is done on a barter basis and more than 65 per cent of Fortune 500 companies use barter to boost their bottom line numbers. The concept is particularly popular in developing economies. Mercedes-Benz traded buses for US$44 million (Dh161.6m) of Ecuadorian bananas and Thailand offered rice for Russian fighter jets. Generally, we do well in good economic times and we see a huge increase in demand for our services in downward cycles.
Can you give me an example from the UAE?
BizXchange was established in the US in 1992 and we opened here in 2007. We now work with more than 200 companies that we manage through our regional office in Dubai. We have a width of partners in many industries from florists and barbers to airlines and hoteliers. We have saved our clients approximately $400m in cash to date. BizXchange facilitated trade between Arab Media Group (AMG) and Al Nabooda Automobiles, the dealer in Dubai and the Northern Emirates for Audi, Porsche and Volkswagen. AMG bought 25 cars using unsold advertising space on their radio stations and in their print media to new clients channelled through BizX. Al Nabooda for its part accepted payment in BizX trade credits. The company uses those credits to pay for budgeted business and marketing expenses it would otherwise have paid cash for. Each day is a new experience. We trade airlines, electronics, media, printing, hotel rooms, rounds of golf, chocolates, watches - the list is long.
And how does BizXchange profit?
There is a sign-up membership fee of Dh5,000 for the business to join the network and a transaction fee on each exchange. Our dropout rate is hardly 5 to 10 per cent and we get lots of new members based on referrals. Word of mouth is good. It means our existing members have had a good experience. We were listed 14th in the Dubai SME 100, a ranking of the top performing small businesses. That shows that the work and energy we have put into the business has been recognised.