are you getting the best for your dollar?

So, I’ll bet you thought these trade dollars were just made up. Not at ITEX.

When a trade exchange starts, there is no currency in the system. Transactions begin when a credit line (a trade dollar loan) is extended to a member to purchase something from another member, initiating the first transaction or, the exchange loans trade dollars to itself in order to purchase inventory as collateral to the currency or for its own operating expenses. Either way, this is how the first trade dollars are issued and placed in circulation. As a member base grows, the trade currency begins to expand as more sellers are accepting and spending the currency

The exchange itself earns trade credits typically through monthly fees and interest charged on negative balances. These trade credit earnings can then be used again to make purchases within the exchange to increase the trade currency in the system.  The key is to manage the currency and ensure that credit lines can be repaid. Exchanges can mismanage their monetary system in four ways: 1) the exchange spends more trade dollars than it earns, 2) the inventory it purchases devalues, 3) credit lines to members are not re-paid or 4) the exchange management sells trade dollars for a discounted cash payment (the worst case of mismanagement).  None good for the long term health of the exchange or its members.

The best managed trade account would have trade credit revolving; you earn and spend. A positive balance can be maintained to take advantage of sales that are beneficial to one’s product or service availability. As well, a positive balance should be maintained to take advantage of trade opportunities as they arise. A significant balance should only be maintained in an exchange that is well managed, and proactively provides spending options for the member.

The ITEX Marketplace currency, ITEX dollars, has not run a negative trade credit balance for more than 10 years, ie: the company spends less ITEX dollars every year than it generates. ITEX also offsets any bad debts in the system by allocating 100% of interest on negative accounts and annual dues earned, directly to its bad debt fund, further securing your trading community. ITEX takes extensive measures to maintain the integrity of its role in the Marketplace economy, and to protect against the misuse or misappropriation of ITEX dollars.  For example:

• ITEX does not sell or purchase ITEX dollars for USD and prohibits members from doing so as well.

• When considering an ITEX dollar credit line, ITEX assesses the financial stability of the member, the demand by others for the member’s product or service and runs a credit report.

• ITEX employees and senior management are prohibited from having trade accounts, removing conflicts of interest to best manage goods and services available for members to purchase.

Sound trade credit management and policies create stability of the transaction currency and is a key to the solidity of the exchange and the security of the trade credit in each member’s account. 

                    The ITEX dollar is the most stable and secure currency in the exchange industry.

for more info:

Karen.Kelly@itex.net