Barter FAQ

Why Barter?

So what are the reasons that you might want to barter?

  1. Personal. Trade what you have directly for what you want with less hassle than selling it first. Eliminate the extra transaction.
  2. Business. Bring in new business. Open up a whole new market with other businesses and individuals who are also interested in barter.
  3. Personal. Barter your own services or unused items for vacation, travel, household items.
  4. Business. Trade excess inventory for needed items.
  5. Business. Improve cash flow. When you barter for something, you will be paying with your own inventory - you create the sale that will pay the expense.
  6. Personal/business. Make good on debts. Works best with local companies, but you may be able to trade goods or services for debts that you can't afford to pay in cash.
  7. Business. Collect on bad debts. A business or individual that can't afford to pay the debt in cash may welcome the chance to trade goods or services for the debt. You may be helping them through tough times and generating real customer loyalty in the long run, too.

What Barter Can't Do

  1. Change your tax picture. Barter sales are still sales for tax purposes. Of course, if you barter for something that is used in business, the barter purchase is also an expense. Barter doesn't change your tax picture.
  2. Make your commodity or service more valuable. What you want to barter has to have value.
  3. Solve all your problems. Barter is one tool that can improve your personal and business life.

Barter Exchanges

A barter exchange is a venue for bartering goods and services. A simple barter exchange is really nothing more than a meeting place where barter buyers come together to deal direct with barter sellers. More complicated exchanges act as brokers and some provide scrip for trading.

Scrip is also called barter currency or, in the US, barter dollars. Using scrip still has the cash flow advantages of barter, but it has the ease of using money. You don't have to find someone who has the service you want and also wants your service. Instead, you list your service or product for sale for scrip at a certain price. You get that many barter dollars when your item sells. Then you go and find someone providing the goods or services you need and pay for them with scrip. You've still helped your cash flow and created new business for yourself by trading excess inventory. The barter exchange usually receives a cash fee that is a percentage of the amount traded.

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Last Modified Friday, October 01, 2004 23:45:05