Bartering is Back - Main Street Meltdown
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Main Street Meltdown

Bartering is Back

 Despite the advances we have made in today's society, when times get tough people often look back to the old tried-and-true methods of coping with problems.   Case in point:  bartering.  

 With many people strapped for cash, bartering is making a big comback.  Bartering has been around since before there was such a thing as money.  During the Great Depression, people often exchanged the performance of work for food, hence the age-old sign "Will Work for Food" held up by the down-and-out, or those who want you to think they are down-and-out.  

What is bartering?  Basically, you exchange something you have for something that you want.  Money doesn't change hands.  Most forms of barter involved exchanging one personal service, such as babysitting services, for another, such as mowing a lawn.  People also barter personal possessions for something else they want, such as trading clothing for a toaster oven.  You get the idea.  

Bartering is nothing new in the business world, either.  Radio stations often barter free ads in exchange for something they need, such as office supplies, furniture or even a company vehicle.  When the Soviet Union collapsed, Russia had to barter with other countries to get the goods it needed because its currency couldn't be converted to dollars or pounds or yen.  It traded something it had, such as vodka (which could be resold for cash) for something it needed, such as grain or electronic items.  

 With credit in short supply and money tight, many people are turning to the Internet to help them facilitate their trades.  Sites such as Craigs List and u-exchange.com feature long lists of proposed trades.  A recent browse through a Craig's List turned up a photo studio willing to shoot wedding for free in exchange for cleaning services, re-roofing services for the installation of an in-ground pool and someone willing to trade a bunk bed for a TV set.  With bartering, the possibilities are endless, and best of all it doesn't cost you anything other than your time or an item you don't need or want anymore.  

Ready to barter?  A few tips to keep in mind:

 1.  Don't be greedy.  Only barter for the things you need.  Conversely, don't give away anything that you really want to keep.  That will really sour a trade.

 2.  Keep good records.  Be sure to note your trades.  Yes, these can be taxed by the IRS, especially if you trade for something of significant value.

 3.  Reach an agreement and stick to it.  Be very specific about what you are trading and work out the details ahead of time either by phone or email before actually carrying out the trade.  Remember, the trade should be beneficial to everybody.  The items you are trading with each other don't necessarily have to be of equal value, but both parties should be happy with their trade.  

Bartering can be very basic.  Are you good at baking cakes?  You might swap your expertise and bake a wedding cake for someone in exchange for vegetables grown in their garden. This summer, I plan to swap organic herbs grown in my garden in exchange for other items I don't grow in my garden.  

Everybody has a skill or an unwanted item they can trade, and that means they have something of value.  Now all you have to do is put it to use.

Good luck, and happy bartering!

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Karen K said:

As a business, bartering is not always the best option.  We have had customers that want to trade service for service but the problem is that we still need money to pay our bills.  

March 13, 2009 6:08 AM

SavvyFrugality said:

That's a good point Karen K.  Bartering is not meant to take the place of income.  As I mentioned in my post, bartering is a means of trading something you have for something you want.  In the example of the radio station trading free advertising on the air for something like, say, a station vehicle, they are trading something they have (air time) for something they want (the vehicle).  Normally, the station would sell this air time, but perhaps they have some open ad slots that they haven't been able to completely sell out.  They have an excess of "air time", so they can afford to give it away for something they need.  The car dealership also benefits from the deal.  They may have more cars on their lot that they can hope to sell on a particular month.  In order to move those cars, they need to advertise their sales and vehicles.  They trade something they have in excess (the vehicle) from something they need (radio station ad time).  Neither business could survive on barter alone, but in this example they are both bartering for something they need that will benefit them.  

March 14, 2009 12:40 AM

cheapChic said:

I barter house cleaning for an hour or two and I get a ride where I have to go if its two hours of cleaning means I billed up for two days of them taking me to the docter to store or just a ride just to get away from my goofey farm and other things..

Usally helps me because Im not allowed to get paid I don't do the heavey house work like moving furniture around thats another story by itself...


March 14, 2009 9:50 PM

Anne Cross said:

Great post! I've had some very satisfying barters -- in my area, posting on Craigslist (for free) is a great way to advertise things or services that one has to barter. I've traded plants, bartered things I didn't want for services I needed, and swapped equipment.

I always try to find free first, second-hand second, then retail as a last resort.

March 15, 2009 5:14 PM

Millers Grain House said:

We do barter in our 'home-life' items and skills more than in our business, for the same reason as above. Business bills and taxes don't respond well to bartering (o:  too bad....

But we barter bread (my skill) for milk (which makes our butter and whipped cream as well)! We also barter organic apples for our bread and our blueberries for things we can't grow....like strawberries (I flop at them every year!)

Love the system...just wish it worked for MORE!

Great post!

Best Blessings!

Donna Miller

March 19, 2009 5:01 PM

marilynjames said:

Bartering lets people also buy at a discount (up to 95%) which is sometimes forgotten or misunderstood.

Imagine you are a hotel. In return for issuing $5000 worth of vouchers you receive $5000 worth of printing. Until those vouchers are used you haven't paid out anything, even though you are getting your printing up-front. Even better - the printing is now costing you less than 10% of what you would pay if you were spending cash.

By purchasing using your own products or services you can automatically reduce the net cash cost on anything you buy.  This is because you are buying using the wholesale cost of your product or service (the difference between the cost you would pay in cash to service a new customer versus the purchase price of the item you just purchased).

Bartering allows you to take your excess capacity or stock and convert it into things you need without loosing regular business or affecting your cashflow.

Turn Non-Producing Assets Into

… Advertising, Asset Purchases, Business Supplies, Capital Expenditure , Client Entertainment, Equipment Purchases, Food, Freight, Graphic Design, Hardware Leases, Health and Beauty, Holidays, Maintenance & Repairs, Marketing, Medical Services, Needed Goods, Office Supplies, Packaging, Promotional Items, Refurbishments, Signage , Staff Rewards, Stationery, Technical Supplies & Services, Travel, Wholesale Items…  and more...

There is a good history of barter at the Ormita Commerce Network website http://www.ormita.com under About Us > History of Barter. Excellent information on the website about general barter ideas as well. I think they arent a barter exchange though (they consider themselves offset trade).

Excess capacity exchange is only useful if a business owner can offset their existing cash expenses and/or acquire additional desired goods and services.

Selling is only one side of the equation. Many Trade Exchanges simply ignore the fact that true value lies in a businesses ability to spend their Trade Credits – not just earn them.

Ormita differs from other Exchanges because it actively works with business owners to offset their current and planned expenses and works with a Buying Schedule. Our business is a member but I also recommend people look at other commodity exchanges and even corporate barter and offset trade networks.

April 10, 2009 5:29 AM

Barter cleaning | Jaymegstore said:

Pingback from  Barter cleaning | Jaymegstore

November 18, 2011 4:37 AM

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