WHY DO SPECIFIC POLICIES / PROCEDURES EXIST?

Clients often ask about certain “rules” that Tradebank has implemented.   If clarification is needed or you have questions not covered here, please contact the local or corporate Tradebank office.

  1. Why are some clients Client Call Direct vs Broker-Only?
  2. Why do trades under T$5000 have to be full trade?
  3. Why are transaction fees in cash and not in TRADEdollars?
  4. Why shouldn't I wait until the end of the month / quarter / year to process a transaction?
  5. Why doesn't Tradebank let me spend into the deficit - you are making the fees after all?
  6. Why does Tradebank recommend that I get a signed TRADEdollar slip / contract (specifying payment in trade) for each sale I do?
  7. Why does my broker ask me to obtain quotes when I am making a larger purchases?

 

1)  CLIENT CALL DIRECT VS BROKER ONLY

What are Broker-Only and Client Call Direct?

These are client “calling statuses”.

If the seller is Broker-Only it means that any buyer wishing to make a purchase must first contact their broker to arrange the trade.  In most circumstances the broker will only be arranging the ratio of trade that will be accepted by the seller (any trade < $5000 must be full trade) and ensuring that the seller can provide what the buyer is looking for.  The specific details of the product or service would then be discussed between the clients.

If the seller is Client Call Direct it means that the buyer can contact the seller directly and arrange the trade.  Please remember to identify yourself as a Tradebank member / client when you go to these clients.

 

What types of clients typically fall into each category?

Broker Only

Client Call Direct

-    Construction companies

-    printers

-    garages

-    clients who will only accept gift certificates

-          hotels

-          restaurants

-          entertainment

-          real estate agents

-          consultants

-          hair salons / spas

 

Why aren’t all clients client call direct?

Generally speaking the primary reason clients are Broker-Only is to help control the trade business they are receiving.  Tradebank may assign Broker-Only status if there are restrictions on times of service, or in the products / services offered on trade, or if they are selling a product where the demand is greater than the supply within the network (eg. hot tubs, cars).  Clients may also want to filter the clients they service through the broker.

 

Advantages of Each?

Broker Only

Client Call Direct

 - Increased Control

 - Don’t have to refuse another member directly

 - Collectability of funds known prior to provision of goods / services.

 - Can benefit from gift certificate burn rate

 - Easier to be selective / restrictive in trading.

- Increases the amount of business

- More user friendly for buying clients

- Allows for buying and selling client to negotiate without assistance.

- Easier to meet tight decision timelines – ie don’t have to wait for broker – or mailing of certificates.

- Increase in out of region business

- Frees up broker time to focus on bringing more into the system, and to satisfy more complex requests

 

Why should clients respect Broker-Only calling status?

1)      The owner of the business may not have explained Tradebank to their staff – the salesperson at the time may inadvertently accept payment in TRADEdollarsTM not understanding that it is not a “regular” form of payment.

2)      The owner of the business may not feel comfortable saying “no” directly to another member, and hence will provide goods and services that they did not actually want to sell on trade.  This can lead to the member deciding to leave the network.

3)      In high demand / short supply categories, there may be a waiting list for the product. Trying to “jump the line” is discourteous to other members.

4)      Ignoring the rule may result in your account being closed.

 

As a Broker-Only Client, if and when approached directly; thank the member for their interest and politely refer them to a broker.  Then call your broker and advise them of the occurrence.    


What are some Best Practices - Client Call Direct Purchases?

Buyer:

  1. Call the client before dropping in. The seller may not be accepting trade at that time (on standby).

  2.  Let the client know that you are a trade customer.

(a)   Most business owners like to know how it is you heard of their company.

(b)   There may only be certain products and services that they offer on trade.  (These should be outlined clearly in the description of the client’s account; however it is possible the description may be out of date.)

   3.  It is possible what you have in mind may be outside of “normal” business for that client.  If you think this might be the case then call your broker first.  (e.g. a party of 10 or more to a restaurant, a large order of gift baskets from a florist)

 Seller:

 1.  Check the Do Not Authorize listing, every time!

 2.  Pre-authorize any transactions > T$X (X is based on what you as the seller would consider a large transaction – this varies considerably client by client) prior to providing the goods or services.  If a time lag between payment and provision of service is likely to occur then the funds or a portion thereof can be placed in Escrow. (see “Steps to Complete an Escrow Transaction”).

 3. To help avoid confusion should standby status be required please advise your broker ASAP.  The Tradebank office would appreciate at least 10 business days notice.  Regardless, it takes at least 2-3 days to inform the majority of the membership

 4.  Remember to keep your broker “in the know” with regards to any changes to goods / services offered in order to keep your directory description up to date.

 

Who do I contact if I need to change my account’s calling status?

You should contact your local regional office.  However, if you need your status changed on short notice please contact the corporate office and we will be happy to help you.

 

2) TRADES UNDER T$5,000 MUST BE FULL TRADE

Ideally all trades, regardless of size, would be full trade.  However once a certain dollar level is reached it can be cash flow prohibitive to offer some goods or services at full trade.  Tradebank has established $5,000 taxes in as being the threshold where a cash component can be introduced.  Please note however that several full trade transactions in excess of $5,000 are processed monthly.

a)      Promotes Fair Trading: This threshold helps ensure fair trading among members.  It would not be fair for a restaurant to accept full trade for a $100 meal and then have to pay 50/50 for a $100 lube and filter on their car.  The transactions are of approximately the same value and same cost of goods sold.

It is fair however, for a restaurant to pay a cash portion on an $8,000 renovation, as generally speaking no one would expect the restaurant to provide $8,000 at a single sitting.

b)      Price Protection: Another reason that the threshold maintains fairness is in “protecting” pricing of products and services.  For the most part people will do due diligence by getting quotes etc. on purchases greater than $5,000, but are less apt to do the same on purchases less than $5,000.  Hence there is a natural price protection through the quotation process as the buyer will be able to catch any overpricing.  Whereas on deals that weren’t sent for independent quotes would rely on the buyer’s knowledge of “fair market” pricing for the particular purchase in question.

c)      Simplifies Transactions: Finally it simplifies the smaller transactions which would be cumbersome from an invoicing and recordkeeping standpoint if they were done at a ratio. 

 * Buyer is not required to move forward on a cash/trade blend just because it is offered by the seller, the buyer might only move forward if the deal is full trade.  Many times buyers are increasing their budget, enhancing lifestyle using trade and don't have a cash budget to put together a particular purchase.

 

3) WHY ARE TRADEBANK TRANSACTION FEES IN CDN $ AND NOT TRADE $?

Tradebank charges the transaction fees in cash because like all businesses, we have payroll, HST / income tax remittances, and other costs that cannot be traded.  The largest expense in our business is our people.

Additionally, Tradebank only recommend businesses take up to maximum 10% of their revenue in trade as taking more than this can cause a burden with respect to non-tradeable costs.  Tradebank currently averages between 10-15% of our total revenue in TRADEdollarsTM from the portion of quarterly fees that is accepted in TRADEdollarsTM.  (i.e. we are already over the average).

 

4) WHY SHOULDN’T I WAIT UNTIL THE END OF THE MONTH / QUARTER / YEAR TO PROCESS A TRANSACTION?

Not only does Tradebank request you process the transaction as soon as possible, it is in your best interest to do so.

If you wait on processing a transaction Tradebank may not be able to process (even if the broker had said the client was good to purchase at the time of sale). 

As a seller is not charged fees there is no advantage to holding back transactions.  Additionally, you will be at a disadvantage with regards to decisions regarding allocation of goods since your trade balance and sales volume will not be as high as it otherwise would be.

It is important that all accounts be as current as possible month by month, so that statements reflect the latest possible information.

 

5) WHY DOESN’T TRADEBANK LET ME SPEND INTO THE DEFICIT – YOU ARE MAKING THE FEES AFTER ALL?

The simple answer is that it is not fair that any client should be in a deficit position – as it means they are receiving goods or services that otherwise could have been sold to a client who had TRADEdollarsTM that they had already earned.    This is based on the theory that there are a finite number of goods or services available at any point in time. 

 

Also, if a client were to go out of business in a trade deficit position it would then be impossible to recover the “lost” goods or services to put back into the network.  It is not good business to extend unlimited overdraft / credit even to business owners we have come to know over time.  Circumstances sometimes take a turn when we least expect.

The Tradebank system should be considered as a debit system rather than a credit system.

 

6) WHY DOES TRADEBANK RECOMMEND THAT I GET A SIGNED TRADE SLIP / CONTRACT (SPECIFIYING PAYMENT IN TRADE) FOR EACH SALE I DO?

Tradebank wants to protect both buyer and seller by helping to ensure that legitimate transactions are not reversed.    If a buying client challenges a purchase recorded on their statement, Tradebank contacts the selling client and requests that they produce proof of purchase.  Approximately 30 business days is given the selling client to produce a signature supporting charge – if no proof is available then the transaction is reversed.

 

7) WHY DOES MY BROKER ASK ME TO OBTAIN QUOTES WHEN I AM MAKING A LARGER PURCHASE (ESPECIALLY IN THE CONSTRUCTION FIELD)?

Tradebank’s primary reasons for requesting written quotes are:

1)      Prices for these types of services can vary widely in the cash market place (and therefore in the trade marketplace as well).

2)      Details for your Broker – within construction and a number of other industries a generic request is not sufficient to put a deal together – with the specifics from a quote your broker can try to get exactly what you are looking for.

3)      Indicates you are serious about moving forward with the purchase.  It is important we all make the best use of time and effort.

4)      Establishes a benchmark for pricing, both so your broker knows if a member who is quoting trade is being reasonable, and also so that your expectations are realistic. 

 

PLEASE NOTE:

a)      Quotes are kept internal to Tradebank and are not distributed or shared with competitors.

b)      Tradebank member companies may not be able to compete with prices of box stores such as Lowe’s or Home Depot.  However, these quotes can be important in making the final decision.  It is important to remember that the lowest price doesn’t mean the best deal (remember your “math”), the best quality or best service.

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