Indroduction to EzyCard Trade Dollars

Why Businesses prefer to Trade with EzyCard Trade Dollars?

The US Department of Commerce says that trade in its various forms accounts for about thirty percent of the world's total business. The International Reciprocal Trade Association (IRTA) recently announced that U.S. barter transacted through commercial trade brokers now exceeds $8 billion annually. Over 250,000 U.S.  Businesses actively use organised trade and in Australia there are now more than 30,000 businesses involved in trade exchanges across the country.

There are many good reasons why more and more businesses worldwide are trading their products and services, but underlying them all is one fundamental business motivation; businesses profit.

Airlines and restaurants can fill empty seats, hotels and resorts can fill empty rooms, printers can fill press downtime, professionals can fill empty time slots, health care professionals can treat new patients. Business owners and professionals can then take this newfound revenue and reduce cash expenses or expand their operations.

Businesses across Australia are taking a serious look at Trade Dollars as a way to improve their bottom line, and the rapid growth of the trade industry can only mean that Australian business likes what today's trade industry has to offer.

Businesses large and small choose to trade with Trade Dollars in order to gain specific benefits as follows;

Real Estate Brief Benefits/Overview;

Real estate provides excellent opportunities to invest Trade Dollars that will generate cash profits. Real estate isn't a particularly liquid asset, but real estate becomes more valuable over time and provides an excellent inflation hedge and tax shelter. Since Trade Dollars come from selling surplus or from additional new business and have low incremental cash costs, many investors find that they can be more aggressive in pursuing investments such as real estate.

Because EzyCard members can earn Trade Dollars without significantly affecting cash flow, investors can buy speculative properties and wait for values to go up. In some cases, it's even possible to walk away with a pocket full of cash.

Even if the investor is forced to sell at a paper loss, the sale can still represent a cash profit. Here's how it works. Let's say a business has an incremental cost of 35 percent in its Trade Dollars.

The business owner buys a property for $500,000 with 30% Trade Dollars (T$150,000 + $350,000 cash), so the total cash cost in the property is $402,500. If he sells the property for $455,000 cash, he has still doubled his cash investment while reporting a $45,000 loss on his taxes. The ATO doesn't care whether you pay for the property in cash or Trade Dollars. The reportable loss is still the same.*

Investing Trade Dollars in improvements to a hard asset like real estate is another way to generate cash profits on Trade Dollars, since the investment enhances the cash value of the property. For example, a doctor has paid for replastering and painting of a house, had a new sidewalk put in, has renovated a garage, and made other improvements using Trade Dollars. Since the doctor's cost of a Trade Dollar is only his time, the actual cost of the improvements is negligible.

Even when a contractor isn't an EzyCard member, members are still able to finance improvements with trade dollars. Vacations, vehicles and building materials can be bought with Trade Dollars, which can be traded to contractors.

Where electricians, painters, plumbers or other contractors are EzyCard members, owners can easily upgrade the cash value to their property. If the real estate is income producing property like rentals, the improvements can generate immediate cash through rent increases.

Trade Mortgages 

You can still buy real estate, including property, homes, units, even though you don't have sufficient trade available to pay for it. Trade exchange members have recently purchased units in Sydney, townhouses in Southport, waterfront acreage at Hervey Bay, an office building in Brisbane, and a resort in tropical North Queensland. These transactions ranged from $300,000 to over $4 million. Typically, the buyer paid between 25-30% part payment in EzyCard Trade Dollars. Where the member didn't have sufficient Trade Dollars the balance was financed with a trade mortgage, just like in the cash world.

EzyCard makes interest free Trade dollar mortgages available to qualified buyers of real estate, where the repayments are paid in Trade Dollars over a period of time of up to 5 years. You provide your products or services to members and deposit the Trade Dollars into your account. Even better, EzyCArd staff refer the new business you need to make the payments, and online sales can enable you to pay off the property even faster. It's that simple.

A recent property sold was a luxury Townhouse in Sydney. The property market in Sydney was slow so the developer decided to sell the property accepting Trade Dollars as part payment. Because he had a need for the Trade Dollars, he was willing to take 30% of his equity in the Townhouse in Trade Dollars. The asking price was $500,000. The equity of $150,000 was paid in Trade Dollars; the balance of $350,000 was paid by obtaining financing with a bank mortgage.

An example of creative trading would be for the buyer to apply for 80% financing of the $500,000 and get a $400,000 mortgage to purchase the house. The seller only requires $350,000 in cash to pay off his indebtedness, leaving an excess of $50,000 cash that the buyer keeps. The buyer also makes a down payment of 20% of the trade mortgage, $30,000 in trade, leaving a trade mortgage of $120,000. This can be paid in product or service of approximately $2,000/month for five years interest free.

Bottom line is, the house can be bought for trade and cash, and the buyer walks away with $50,000 in cash and lives in or rents the house for five years. The house can then be sold for at least $500,000 plus capital gains of say 20% which would make the property worth $600,000. Pay off the remaining cash mortgage of approximately $400,000, and walk away with another $200,000 in cash.

If you are interested in creative trading that turns Trade Dollars into cash, let us know. Then the next time a deal comes along, you'll be the first to know.

Equity Trading

Trading shares of stock is a new trend gaining popularity in the investment and securities arena. Typically companies will sell restricted stock for Trade Dollars which is a form of currency recognised by the ASX. They can then use the Trade Dollars to offset cash marketing costs with trade dollars, thus marketing the stock and advertising the company to gain name recognition and market share.

Other cash expenses that can be offset with trade purchases include design of company logos and collateral materials, printing of annual reports, 10Ks and 10Qs, legal services, Internet site design and a host of other services typically needed to launch an IPO.

Pre-IPO companies can also use stock sales to build a Trade Dollar reserve which may be used as assets. Or, Trade Dollars can be used to purchase other hard assets such as real estate. Companies should always do their due diligence by discussing these concepts with their advisor or accountant to determine their feasibility.
An added benefit to companies that sell stock for Trade Dollars is the accrual of new investors who talk about their investment to friends, family and associates who can become potential cash investors thus creating demand for the stock and trading activity.

Since Trade Dollars come from excess capacity or from additional new business and have low incremental cash costs, many investors can be more aggressive and take chances in investing in new companies. Because EzyCard members can earn Trade Dollars without significantly affecting cash flow, investors can buy speculative stocks and wait for share values to go up. Once the restriction expires, it's possible to turn trade investments into cash.

Retail Trade

• new sales and customers
• Increased buying power
• Conservation of cash flow
• Alternative financing
• Enhanced quality of life
• Corporate Trade
• Convert slow moving inventory into current receivables
• Put surplus production capacity to use
• Increase market share with low cash investment
• International Countertrade
• Preserve hard currency
  Improve balance of trade
• Access new markets
• Upgrade manufacturing capabilities
• Maintain prices of export goods 

Advertising

Advertising is the best way to use Trade Dollars to attract cash business. Advertising media, including radio, television, magazines, newspapers, billboards, and direct mail, are all available on trade. After all, there's no way to store advertising media and sell it later, so media companies welcome trade.

If a minute of available advertising time passes at a radio station without an advertiser buying it, that minute is lost forever. It can't be put back on the shelf and sold tomorrow. The same is true in various ways for all other advertising media.

Using Trade Dollars to advertise is very affordable, particularly since your Trade Dollar income generally represents new business. This means the actual cost for your advertising dollars is very low.

For example, a restaurant may have food costs representing 30 percent of the price of a meal. Since trading represents new business the restaurant would have been unlikely to attract, the actual cash cost of the Trade Dollars is 30 cents in the dollar. There is no additional cost in rent, electricity, insurance, payroll, etc. to service the additional business. The only expense is the incremental cost of the food.

Using Trade Dollars, the restaurant can buy advertising to bring in new cash business for less than a third of the regular cash cost. And advertising is one way utilising the Trade Dollar, one that represents an immediate opportunity to generate new cash business. In the example above, the restaurant has tripled the purchasing power of its actual cash cost.

Not everyone recognises the opportunities trading represents, but anyone can learn. It just takes some creative minds and exposure to new ideas to fit the trade into your every day way of doing business.

Employee Benefits

Employee benefits represent major cash costs for most businesses and are rapidly becoming unaffordable for many small businesses. Trading represents an opportunity to cut costs and generate cash income for savvy business owners.

It doesn't matter whether the company has many employees or just a few. There are dental plans, vision plans, chiropractic physicians, health spas, day care, and other employee benefits that are available for Trade Dollars.

Providing employees with better benefits purchased on trade can help small businesses attract and keep skilled employees. Another approach is to make benefits available to employees at reduced cost. For example, an employer might pay for day care at a local centre on trade, then offer the service to employees at half price as a payroll deduction.

The employee receives a significant saving on a valuable fringe benefit. The employer reduces its payroll cost, and the expense provides a tax deduction.

Another benefit is a dentist or optometrist. In these cases employers can send an employee to an EzyCard dentist, then submit the bill to the insurance company for reimbursement in cash.

Earn Cash While Selling on Trade

Some businesses can also generate cash as a by-product of earning Trade Dollars. Hotels and resorts are a good example of this process.

The mortgage, insurance and utilities on a hotel are fixed, whether the hotel is fully occupied or nearly empty. The incremental cost of filling an unused room is minimal. To pay for the extra house cleaning, laundry, and complimentary items such as soaps and shampoos, it costs about $20 per room night.

But just think about how much cash revenue that twenty dollars can generate. The people staying in that room order room-service, buy refreshments from the bar fridge, magazines and gifts from the gift shop and eat in the restaurant. It's even more lucrative if it is a resort. When a destination resort offers sports, tours and entertainment, visitors spend a lot of money on peripherals.

The hotel has generated cash it would not have had while producing full value for the room in Trade Dollars. In addition to the new cash flow, the hotel can use the Trade Dollars to offset cash expenses.

Turn Trade Dollars into Cash

We believe that virtually every EzyCard member regularly pays cash for something that could be bought on trade, which can then be resold for cash. If you can't find it yourself, our staff will be happy to assist you.

For example, one of our clients is a magazine. One of its major expenses is colour separations. We found another business that does separations and signed them up specifically for the magazine client.

The pre-press company does the separations and film on trade, and the magazine charges cash to its advertisers. With the help of a creative broker, the magazine now turns its Trade Dollars directly into cash.

The separations were an established part of the magazine's fixed cost, so it was fairly simple to recognize the trading opportunism. Creative traders can also develop new product lines or new ways of doing business that turn Trade Dollars into cash dollars.

For example, a parking garage teamed up with an oil change and auto detailing company. Parking customers find it convenient to drop their cars off and not waste time on minor maintenance. The parking garage pays for the work in trade, then charges cash to its customers.

With the help of creative trading, the garage owner found a way to offer a new service and generate a new source of cash flow funded completely on trading.

Cash Producing Equipment

Buying cash generating equipment with Trade Dollars is another way to bring Trade Dollars back to cash. One of our clients recently bought a $5,000 colour copier on trade. He deducted the purchase price as a business expense, and now believes he will be able to earn the full price back in cash within a year by selling colour copies for cash.

Another client, a mobile phone reselling company, buys mobile phones made by an overseas company at wholesale prices for Trade Dollars. The mobile phone company marks up the prices, sells the phones to its customers for cash, then earns cash for the monthly phone service as well. Meanwhile, the Trade Dollars it uses to buy the phones comes from a line of credit from EzyCard which it repays by selling mobile phone call charges service on trade to other EzyCard clients.

Buying more products and equipment are two ways to generate more cash by investing Trade Dollars in a business. A third way is to invest in what represents most businesses' most important asset - its employees.

Sales and production incentives can be purchased on trade and tied to cash profits, either through more orders or increased efficiency. Incentives can be either competitive or cooperative. Sales incentives are usually competitive, while production incentives are more frequently cooperative. In either case desirable incentives such as travel, gifts, and dining are usually available for Trade Dollars.

Build-in Cash Customers

Some companies sell products on trade that can be serviced or supplied on cash. For example, a company sells a binding device on trade but charges cash for orders of supplies. The supplies can be purchased from other vendors, but since customers have a business relationship with the initial company they tend to continue it for the cash business as well.

One way to build in a cash customer is to sell a franchise on trade. A magazine franchise, for example, might sell on trade, then printing and graphic services could be sold to the franchisee for cash. Meanwhile, the trade accepted for the franchise fee could be used for advertising to attract new customers for the franchisee.

There are many more ways Trade transactions can work for your business. EzyCard will work with you to make the most of the advantages.