ВAs a consequence of notorious developments in the global and Russian economies, many Russian businesses face new problems with sales and cash. Therefore, bartering becomes an urgent issue once again. This articles based on an overview of online resources describes bartering opportunities provided by various web sites and barter exchanges in the Russian segment of the Internet. Three types of facilities are analyzed: 1. Simple exchange tools (forums, catalogues, advertising boards); 2. Facilities with unclear status and operating principles; 3. Existing open and private barter systems. The article will be of interest and help to business managers interested in increasing sales of their own products in the context of an economic turmoil, and for those who wish to obtain additional competitive advantages by using bartering.

During the crisis many Russian top managers faced the issue of growing surplus stock and amounts of unsold services. As a result they started paying more attention to alternative ways of operation to solve at a time the problem of selling their products and the problem of cash shortages. In Russia, and all over the world in general, bartering is often a solution. For example, IMS, a global bartering business leader, estimates that U.S. market capacity for barter transactions carried out through specialized exchanges alone amounted to around US$7bn per year in 2007 and 2008. If we take data by the IMF and International Reciprocal Trade Association, the potential capacity of the global bartering market with the existing global economy capacity is estimated at US$240bn.

It is clear that international and Russian businessmen could not pass by such an attractive market. Multiple specialized barter venues are operating all over the world. For example, around 400 of them exist in the U.S., and the 30-year track record of the industry shows that their business remains viable during both crises and intensive economic growth.

The Russian market has had practical experience of bartering. In the 90s a vast number of companies had to switch to bartering and even paying out salaries with their products. However, there is no doubt that similar relationships cannot be called normal, and fortunately much has changed since then. Barter relationships are no longer total and they gradually become more and more civilized thanks to the efforts of specialized companies. This overview is dedicated to an analysis of how bartering is organized in the Russian segment of the Internet, and what specialized facilities and venues are ready to offer their services. This overview specifically focuses on the following features of barter venues:

1. Activity level of the venue: whether it really works and, if yes, how actively.

2. Services offered: is the venue a simple information facility or does it also offer help at all stages of bartering, including direct participation in deal execution?

3. Fees and key pricing principles.

4. Bartering form: classic/private barter or open barter. According to Wikipedia, two parties take part in a private trade (private barter); product/service X is exchanged exclusively for product/service Y; the parties are time bound (a one-time one-off deal) and limited by the fixed amount of the transaction (equivalent value amount). An open trade (open barter) may include more than 2 parties; product/service X can be exchanged for products/services Y, Z,… N in different proportions; the exchange may take place at different times. Actually, by providing its product, one of the parties is granted the right of choosing what it wants to have in exchange and when. It must not declare its intentions beforehand, and they can change over time.

5. Facility information transparency: is it possible to understand who created the facility and directly communicate with the owners?

We will not go into detail on each venue for all of the above parameters, but we will, however, use them as benchmarks.

Besides the above factors, the target audience of barter venues is obviously of great importance. Therefore, we will underline from the outset that our review focuses exclusively on B2B barter venues, bypassing advertising boards used by retail users to trade stuff they (do not) need with other retail users.

Moreover, there exist general barter venues offering their services to companies from different industries and specialized, industry-specific, barter venues. We have not provided a specific coverage of the latter.

We have limited the search area to Internet; thus, the overview does not cover offline barter companies with no web-sites. This step is quite justified as nowadays an own web-site is a must-have for any serious company.

This overview is not intended to be fully comprehensive; nevertheless, we tried to cover in it all most notable barter venues represented in the Russian segment of the Internet.

So, we have identified the following types of barter venues.

1. Simple swapping tools that include advertising boards, forums, catalogues and other similar resources featuring (or not) a search engine.

This category includes both nationwide/universal, and regional/industry-specific venues and forums that do not offer brokerage services. The category, which is quite easy to guess, is the most numerous one as, to be launched, such facilities do not require any specific costs, innovations, or years of meticulous work.

The raison d’être of such facilities is that users place and view “I have/need stuff” messages and if they find the right thing to swap they contact each other and negotiate the deal.

However, there is a material issue here: it is very hard to find a partner who at a time has the thing you need and needs the thing you have. No wonder that such advertising boards are quite inefficient and activity levels of their users are rather low. Nonetheless, as a rule the use of such facilities is free of charge or assumes a minimal fee, which offsets all its disadvantages.

ZABARTER.RU Barter System (www.zabarter.ru) is an example of such a facility. You can place your advertising in it free of charge, but it will be published after pre-moderation. Gratuitousness of the system is an advantage. At the same time the system cannot be considered to be fully barter-based, for many ads are not offers to exchange products of one type for products of another type, but just simple descriptions of products, which seemingly assume that they will be sold for cash. Moreover, the facility is new and still has little content.

The Russian Barter Venue (www.bartertrade.ru) is a typical catalogue where companies can publish overviews of their products with prices: free of charge subject to the minimum number of items in the price list; or, if a larger number of items, for a small fee depending on the number. Catalogue visitors are to search on their own for trade matches: the facility’s services are limited to providing information. As new members join the catalogue, information posted by older members is shifted to the “backyard” and you will need to use the search engine to find it. No brokerage services, no complex swapping schemes. In general, judging by the description available to us, the system only serves as a facility to publish information and, as an intermediary, it waives any liability whatsoever for the information published and trading results.

Project SuperBarterRU (www.superbarter.ru) operates on a similar basis. It is actually also an online catalogue in which companies can publish information on products and services offered and needed. Bartering itself is done by the system users, while the system owners do not take part in it. Fees are paid for access to the facility for a certain period (e.g. 2,000 roubles a month, 19,000 roubles a year). We have not found any in-principle differences of the project from free advertising e-boards (well, except for availability of a structured catalogue and alleged message moderation).

Prombarter Barter Exchange System (www.prombarter.ru) is another facility of the type in question. The fee for placing an offer is 500 roubles.

Additional paid services are also offered: “dedicated offer”, “contacts always open in the offer list”. The fee for opening each contact of the seller you are interested in is 90 roubles. No one guarantees that the deal will take place on the offered terms. The fee is paid exclusively for publishing and obtaining information.

Surely, we have mentioned only a few most sophisticated facilities of this most widespread category. There is also a great host of regional and industry-specific barter facilities, free forums, advertising boards, etc., but even giving their brief descriptions would simply make no sense.

While everything is clear with the free systems (the fact of being free-of-charge offsetting all their flaws), the disadvantage of paid ones may consist in difficulties with the search for counteragents who would need your specific product and the very likely odds of getting no results for money paid.

In any event, all these systems are private barter. To strike a deal you will need to find a partner who at a time has the product you need and needs your specific product.

2. Systems with unclear status and operating principles

Facilities of this category are under development or raise many questions. Perhaps, such facilities may operate when carrying out transactions of certain types, or will be launched later. But at the same time, in some cases we suspect that global ambitions of facility owners are poorly supported by real acts and capabilities.

The Anticrisis Settlement and Commodity Centre (A.S.CENT) (www.artc-alisa.ru) of well-known businessman German Sterligov who founded Alisa Commodity Exchange in 1990 is a widely advertised project. The project was launched in November 2008. Its overall operating principle is as follows: clients enter their offers to deliver products and bids for products to which they are ready to swap their products. System members are to enter a deposit of 2% of the offered product value to prove their “serious intentions”. The system processes various deal options; the product is passed through a series of swaps, and at the final stage the member receives for its product either another product (initially requested by such member), or money. Such series of swaps cannot have more than 5 elements. Information materials at the project’s web site point out that members are more likely to receive goods than money at the final stage. Gold standard is suggested to be used later as money, with gold coins being minted for this purpose abroad.

According to multiple interviews given by the project founder, the system is not operating yet, as it is still being filled with content. However, the A.S.CENT has already caused a scandal: business partners of Mr. Sterligov accuse him of creating a financial pyramid. Legal proceedings will clarify whether the project is a pyramid scheme, but the facts remain facts: money is being collected, with no specific outcome (yet?). Besides, a number of other questions arise. For instance, it is unclear what IT platform will build such sophisticated swap chains. The initial global nature and scale of the project are as well suspicious: multiple offices are launched all over the world at a time, while it would seem more logical testing such a sophisticated and innovative system in a single region, correct imminent errors identified during the trial operation, and only then implement the already tested system globally. On the contrary, we witness a large-scale acquisition of clients with no operating system, which obviously raises suspicions, especially in conjunction with the ambiguous reputation of Gherman Sterligov in the business environment. We only can wait and watch how the situation will evolve.

The National Barter Register (www.barterrusssia.ru) is another mysterious project, as its web-site makes it difficult to understand what its operating principles are. The homepage suggests that you send a request for a barter operation and wait for the reply by phone or e-mail from a professional broker within 24 hours. Judging by the type of request, we may most likely expect that the system manages bilateral “have/need” type swaps, with matching options prepared by a paid broker. We cannot 100% confirm whether the system is working or not, how much the services cost, and what the likelihood of finding a good match is. Given that the facility was launched just recently, in July 2009, perhaps we will soon learn something new and essential about it.

Online Barter Club (www.onlinebarter.ru) is a facility offering both bilateral (“have/need” type) and multilateral deals. Multilateral deals are carried out using in-house barter roubles, assumingly with brokerage and commission fees. As to bilateral transactions, the business is apparently going on, as new lots are published on the site on a regular basis. The situation with multilateral transactions is unclear and most likely few or no actual transactions are made in the system.

Information on the target audience of the facility is also ambiguous. Materials published on the site mention both B2B product swaps, and useless rummage that can be valuable for other people. So, who are the target audience: entities, individuals, or all of them?

It is also hard to understand why a post office box in Khabarovsk is given as the corporate address of the facility owner, with no contact phone. If the company is active in the barter market throughout Russia and carries out valid and legal operations, why would it locate its office far from major economic hubs and make contacts with it so complicated? For potential system members are likely to have questions that would need personal or at least phone discussion, rather than standard online messaging. Furthermore, many quite naturally would like to see personally their future business partners (intermediaries in this case) at least at the stage of making an engagement decision.

Summing up, barter venues in this category potentially offer something more attractive than exchanges by searching for counteragents in catalogues, but so far their business raises more questions than gives answers.

3. Active open and private barter systems

Rosbarter System (operating globally as Globalbarter) (www.rusbarter.ru), judging by the intense activities on the web-site and in media, is operating, and quite actively. The system operates in two modes:

Mode 1. The system serves as a simple intermediary in bilateral exchanges when party A swaps its product to the product of party B. In this case the client will be offered only two free potential matches, while a contact access fee is payable for getting access to contacts of companies offering other matches, or a fee for placing own lots. Thus, in this case Rosbarter system acts as some kind of an improved variant of common advertising boards. However, as the system’s web-site asserts, its advantage consists in possessing the largest database of product swap offers.

Mode 2. The system creates simple or complex series of barter swaps when potential bartering options are selected by brokers. The brokers are not system staff but act within the system as clients with extended rights.

Due to the lack of an internal conditional settlement currency in the system, and given that brokers have to pay for getting access to any contact in the system, building really flexible and complex bartering chains seems to be difficult. The problem is that such a chain is hard and sometimes impossible to build, and brokerage may be required at each section of such a chain, which will considerably increase costs of the bartering companies. Furthermore, given that brokers operate totally uncontrolled by the system owners, no one can guarantee that the specific needs of the client would be met. Nonetheless, the system gives a positive impression and is worth attention of potential clients.

B2B.ru Open Barter System (www.b2b.ru) is a real operating facility. In this case we may firmly state that the system is functioning, actual deals are carried out, the system owners are known and accessible for personal contacts.

The system is clearly focused on open barter, i.e. users do not need to sell their products and services to those companies whose products they need. Products are sold to any member; likewise, you can buy from any member. In-house money – B2BMoney (Bm) – is used in the system to this end. Intensive circulation of Bm and liquidity of members’ products are achieved by active involvement of companies from various industries.

System users pay a subscription fee, with its amount depending on the chosen tariff plan, and a fee of up to 6% on each consummated deal. The system currently counts over 400 members, with plans to increase their numbers to 2,500 by the year-end.

The system is operated by staff brokers who help members enter into transactions and support their execution throughout the process, which dramatically increases the chances that the system clients will not be passive onlookers in the system, but will actually use bartering advantages.

We have reviewed major categories of Russian online barter venues and identified key particularities of specific systems.

Category 3 venues are obviously most advanced, while we believe that viable venues from other categories will evolve in this direction.

We hope that information given in this overview will help potential clients of barter trade venues choose a platform that meets their business requirements the most.

NB: The management and shareholders of B2B.RU System are committed to comprehensive development of the open barter industry and are open to dialogue with all interested parties. If on reading these materials you have any questions or remarks, we will be happy to discuss them and, if necessary, provide additional information.