By BERNIE BELLAN
With the crippling effect that the Covid pandemic has had on the economy, and with so many small businesses suffering either to the point of having to scale back operations or even close down completely, many business people have been looking to alternative ways of doing things.
As a small businessperson myself, I have always been interested in the concept of barter – of trading service for service or goods for goods. Recently I happened to be talking with Martin Kahan, owner of MK Global Trading, which is a well-known barter operation based out of Winnipeg.
I said to Martin that I would like to interview him about his business. I’ve known Martin since we attended Talmud Torah together back in the 1960s, but I had never profiled him in this paper. Considering that barter as a concept is older, in fact, than money itself, but there are relatively few companies engaged in arranging barter transactions between different companies, profiling Martin Kahan is something that has long been overdue in this paper.
I spoke to Martin in the middle of January. I began by asking him how he became involved with barter.
Martin said: “I originally got involved in the late 80s and early 90s…I didn’t even know it was barter…because I was doing business in – of all places, Ukraine, and we were doing different trades with them – myself and a couple of other people.
“What I realized very quickly was that money wasn’t the be-all and end-all. Sure, they needed money, but to make certain things happen I was told: ‘Maybe you can supply sugar, for instance, because I’ve got this guy over here and this guy over there and in order to make a deal to work I had to please everybody.
“So that was my first inauguration, so to speak, in what I call ‘multi-directional barter’.
“In 1997 I was approached by a company called Barternet. That was one of the first barter companies in Manitoba. How they got a hold of me I honestly have no idea, but they did. They suggested I come work with them and I helped build their company.
“It was an interesting relationship, to say the least. I ended up leaving there after four years.
“In 2001 I started working for another company called Canadian Barter System – worked there for about six and a half years – helped build up their company. We parted our ways at that point and, here I am then – 54 years old, and asking myself: ‘What should I do? I don’t want to work for anyone else any more’.
“I decided I’ll throw caution to the wind and I’ll start my own little barter company, thinking it was just going to be a small company. That’s when I created MK Global Trade (in June 2007). One deal led to another deal, one client led to another client and over a two-year period we became a pretty good-sized company – about 260 companies as members.
“Eventually Canadian Barter Systems – the company that I had left, went out of business, and we just kept on growing. Today, here we are: We’re about 640 local businesses.
“Further, we are interconnected with barter exchanges across the country, so we literally have representation all the way from Montreal to Vancouver.”
At that point Martin began to explain more fully how MK Global Trading works:
“Most people think they understand barter; they don’t. Most people think barter is one on one – I have this, you have that and, that generally works if both parties have what the other needs.
“What happens if the other one doesn’t have what the other one needs? Then the system doesn’t work.
“In our system we have 640 companies that you can use a combination thereof to pay for the things that you’d otherwise be paying Canadian dollars for. We use a currency called trade dollars (or trade credits).
“Something else to bear in mind is that everyone in our network is another business person. If you do a good job for someone, regardless how you get paid for that job, at the end of the day if they’re happy with you as a business person they’re going to tell others about you.”
I asked Martin how barter is treated for tax purposes.
He said: “Some people may wonder about the CRA and barter. Their (the CRA’s) perspective is they don’t care how you get paid so long as legitimate invoices are issued, and as long as taxes are collected and submitted.
“This is how it works with MK Global: Every single account is assigned a broker. (There are three different brokers in the office.) Our jobs as brokers is to present you the opportunity to do business with someone you’ve never done business with before. At the same time we’re interested in bringing your company more business.
“One of the things that has given me the most satisfaction over the years is the close ties we have formed with the local business community. Ninety-nine per cent of our clients are local businesses. They’re not the big box stores; they’re just local, down to earth businesspeople. Our objective from day one has been to work with them - to give them support so that they can get additional business that they would otherwise not be getting.
“At the end of the day they can be just as productive as the big box stores; they just don’t have the budgets to market themselves.
I asked Martin how much MK Global charges for its service: He answered: “We charge a five per cent commission when any company buys or sells something on MK Global.”
In return for that commission, Martin notes that “even though everyone these days is online, we tell people to be in constant contact with their brokers so that if you need something, just reach out to whoever is in charge of your account. Just send us a text, an email, phone us – that additional five percent is for us to be your ‘walking through the Yellow Pages’.”
I wondered how his business has been affected by the pandemic.
Martin responded that there have been two noticeable effects: “The total volume of business has gone down” – because there’s been a general wide scale drop off in most sectors of the economy as a whole.
But, at the same time, Martin notes, “our base of clients has actually increased by some 80 odd clients since March of last year. Again, people need to do something. They need to buy, they need to sell, they need to be active.”
Something that MK Global has done to help new clients is drop the initial entrance fee of $300 – and keep it off until things begin to return to some sense of normalcy.
“Our volume every year is in the millions of dollars. We know that the higher our volume the more we’re contributing to the economy.”
One other thing that MK Global has also done recently is completely revamp its website, MKGlobalTrade.com. The site provides an easy-to-understand explanation how its system works. It also has a complete listing of all its members, broken down by different categories.
These days all companies are having to innovate in ways that they might not have even considered doing prior to the pandemic. Barter offers an interesting and potentially lucrative method of increasing business at very little cost.