The Process Of Barter
Is your business interested in bartering, but unsure of how it works? Maybe you have specific questions regarding the advantages of the trade economy, wondering whether it’s suitable for you. Don’t worry - we’ve written this post to help you understand the way that bartering operates:
To boil it down to a single sentence, bartering is the exchange of goods and services between people without the use of cash. Now, let’s expand on that. Bartering has historic roots - before there was currency, societies used trading as a way to exchange goods and services. It’s been around since 6000 BC, and was used by Mesopotamian tribes. In times of economic hardship where money was scarce, such as The Great Depression, bartering was a way for families to feed themselves by exchanging their items for food. Since then, bartering has become a global process that exists in all countries, thanks to the Internet.
Trade dollars are used in place of Canadian dollars in bartering. This ensures that businesses don’t use their revenue for the process of trading. Many companies use bartering networks to trade excess inventory for valuable services - it’s an efficient use of leftover stock that won’t result in any lost sales. A service provider, like a hairstylist, can use free time slots in their day to barter a hair appointment for a bouquet from a local florist.
What Can Be Bartered?
The answers are nearly limitless. From personal care services, like house cleaning or massages, to technology, like web design or cell phones, almost anything can be traded on a bartering network.
A company that requires commercial cleaning but lacks the cash to do so can use bartering to trade their goods for this service. Even though bartering is a cashless exchange, there are still taxes involved. Businesses are required to report all income earned from trading. When companies join a bartering network, their exchanges will be recorded, which makes the whole process very easy. Since barter fees are a business expense, they can be used as a tax write off.
One obstacle that has traditionally stood in the way of many bartering exchanges is matching trades with a business that will serve you. For example, consider barter between an eyelash extension company and a lawn care service. Perhaps the eyelash business would like to barter for lawn care, but the other business is not interested in eyelash extensions. By using a bartering network, the lawn care service will receive trade dollars for the exchange. This allows them to use those trade dollars for any other business on the platform that they’d like to barter with. Funds from one trade can be used towards the next one.
The same lawn care service can use the trade dollars from the cosmetician to barter with an auto mechanic company and get an oil change. It gives them flexibility and the option to obtain only the goods and services that will be useful to them without having to compromise.
Is Your Company Interested in B2B (business to business) Bartering?
If so, you may be wondering where to start. First, choose which resources you would like to trade - they could be any items or services that your business offers. Make use of additional stock or open time slots for the most efficient exchanges. Then, value your goods or services. For a successful trade, they must be appraised accurately.
At this point, you can consider what you’d like to obtain from trading. Perhaps your company needs new equipment or technology or maybe you’d like a luxury service that is too expensive without the use of bartering. You can keep these ideas in mind when you search for trading partners. The final step in this process is to join a bartering network. Doing so will make it easy to advertise your services, and link up with other businesses that will want to trade with you.
In the past, one disadvantage of bartering was trying to find a trustworthy trader. What if someone trades you for a defective item? It has also been challenging to find other businesses to trade with.
A bartering network makes this process reliable and seamless. Looking for barter services for Manitoba businesses? MK Global Trade offers an exceptional service. By joining our website, your business will receive free advertising in our newsletters and by our sales representatives. The directory on our website makes it easy to find businesses that you can reliably trade with.