For decades, business owners in Louisiana have bartered with one another — trading tree-cutting services for meals at restaurants, dentistry work for cleaning services, and a wide range of other products and services — through organized trade exchanges owned by their members.
Now, a group in Louisiana is capitalizing on the international craze over cryptocurrencies like bitcoin to help launch Moxey, a revamped version of the traditonal trade exchange network, with the ambitious goal of expanding the currency throughout the U.S. and beyond.
The president of Moxey, which is the rebranded name for the existing Trade Authority network, is Charlie Davis, a former executive of MasteryPrep in Baton Rouge. His vision involves growing Moxey at a rapid clip, ultimately expanding throughout the world and creating a viable and widely used digital currency. In five years, Davis said he wants to be in 25 countries.
There’s a long way to go. Moxey has 14 member exchanges. Most are in Louisiana, along with a handful in Tennessee, Alabama and Mississippi, with 4,000 or so members. Trade Authority did $20 million in total sales volume last year, and Moxey’s team hopes to do hundreds of millions in short order.
“Our next goal is $100 million a year,” Davis said. “Then $100 million a month.”
In the meantime, Davis and Moxey Vice President Warren Sager are updating software and launching the rebrand, sending new Moxey-branded stickers and credit cards to members.
They’re also busy riding the cryptocurrency wave in an era where terms like “blockchain” can revamp a brand overnight. The firm recently ended its seed funding round of a few hundred thousand dollars, and the excitement surrounding new currencies was palpable, Davis said.
“It’s made everything we’re doing with Moxey easier,” he said. “We had to turn money down.”
In the early days of Louisiana’s trade exchanges, the business people behind them married the ancient practice of bartering with handwritten ledgers and brokers who helped connect those who needed a product or service with those who offered it.
For instance, when Jeffrey Chamblin first took over Louisiana’s oldest trade exchange, now called Crescent City Trade Exchange, the bartering was done on paper. Transactions were stowed away in a drawer until the end of the month, when a staffer at the exchange would punch each entry into an oversized computer.
“You didn’t know who had what trade available,” Chamblin said. “We would send out physical bad card reports.”
In the years since Chamblin first bought Crescent City Trade in 1984, the operations have become increasingly advanced. For example, a mechanic or florist who is a member of a trade exchange can now eat out at a member restaurant and swipe a credit card that automatically tracks the trade. That restaurant owner can turn around and use that credit at any other establishment linked up through the trade exchange.
The industry flourished once computer technology caught up, Chamblin said, and was again reinvigorated with the advent of credit card technology. With easier processes for the transactions, the industry became profitable. Crescent City Trade now boasts 1,000 or so members and does about $5 million in annual trade volume.
Moxey is aimed at further cutting out the inefficiencies in the process, which Davis and Sager say involves time-consuming coordination, often using an actual trade broker. In doing so, the firm hopes to be able to scale rapidly.
“The biggest difference in what we're doing is we’re eliminating friction and making it as easy as possible to do a high velocity of business,” Sager said.
Moxey, like other exchanges, uses a screening process to determine whether a business should be added to the network, and if so, how much credit it should be given. The credit is interest-free, with a roughly 10 percent fee levied when members spend trade dollars. Davis likens the screening process to a bank, which runs a credit check before issuing a card.
The difference, he said, is that Moxey actively advertises the business to help smooth out imbalances in trade volumes. If a business is using more trade than it is taking in, Moxey can push out that firm’s name to get members to spend their own trade dollars there.
“Just the initial introduction of 'La Divina is now a member,' when they put that one boost out … the doors just swung open and it was steady people coming in,” said La Divina owner Lance LeBlanc, who joined the Baton Rouge Moxey-affiliated exchange, Partners One, about two years ago.
But LeBlanc said when he initially joined, he was still apprehensive about the program he just signed up for. His margins immediately changed, and he didn’t see the benefit.
Once he began spending the partners' dollars he received, LeBlanc became an avid supporter of the barter program. For awhile, he bought his produce with trade dollars from a supplier in Port Allen.
“In the food industry, if you can't sell it, you throw it away,” LeBlanc said. “The more I can move the product, the better buying power I have."
Most importantly, LeBlanc said most of the customers who paid with Partners One were new customers, a phenomenon he attributes to the exchange advertising his business to other members.
There are a litany of trade exchanges throughout the U.S., linked through larger networks, associations or franchises. In Louisiana, Trade Authority has operated since 2011 as the larger network linking 14 trade exchanges — ranging from Partners One in Baton Rouge to Crescent City Trade in New Orleans to others in places like Gonzales, Lake Charles and Monroe. Exchanges like Crescent City are simultaneously linked up with national and international networks.
Some of those will be rebranded entirely as Moxey, while others, like Partners One and Crescent City Trade, will be “co-branded” to retain the well-known existing name.
The director of the National Association of Trade Exchanges, John Kucera, said the idea of expanding a trade exchange throughout the world is nothing new. Franchises have opened up across the country, and the association includes 47 “top-notch” exchanges throughout the U.S., with a presence in all 50 states. If a member is traveling, Kucera said the association can coordinate with them to use trade to pay for just about anything.
“If we have a client that’s traveling to Memphis, we’ll send them a message or ask people if they have anything in Memphis,” he said.
Davis, on the other hand, paints a picture of Moxey as an eventually ubiquitous currency, with a uniform brand connecting the dots for members. The firm is updating the Trade Authority mobile app, which shows members a map of which businesses nearby are members, among other things. With later rounds of funding, Davis said he will acquire existing trade exchanges and start new ones throughout the U.S.
And it could eventually become an actual cryptocurrency, he added. Later, he plans to create a “tokenized asset” on the blockchain, the ledger that enables currencies like bitcoin, that would serve as an asset representing equity in the Moxey network.
For now, Moxey is advertising the longstanding benefits of trade exchanges to potential members: It helps with cash flow issues for new businesses, brings in new customers and increases efficiency.
"There's a reason most small businesses fail: It's hard to get in new customers, cash flow is difficult. It's very challenging,” Davis said. “We solve both of those problems.”