Barter Basics

There are some basic rules in barter which should be followed if you are to be successful. They are not difficult or complicated, but, by not understanding the basics, a person will never get the most out of barter. Worse yet, by going against the basics, a person can get in real trouble. He then becomes disillusioned and blames the failure on the barter program.

The following list sets forth the most common rules governing trade.
1 Barter if you cannot sell all of your goods or services for cash
2 Your product or service must be marketable
3 Barter means no increase in overhead
4 Trade to save cash - not always to get specific items
5 Trade to sell slow moving or excess inventory, or unused time
6 Create a spend down list of goods or services that you would like to buy on trade

7 Buy what is available on trade, use cash to buy the balance
8 Trade supplements but does not replace the dollar

Trade works best at moving goods or services that are not selling for cash. This would include non-billable hours, unused space or excess capacity. Any item offered for trade must be salable in the market place today. Barter will not make a bad product sell.

Barter is best and is most profitable if there is no increase in the overhead. If you have to add people, space, equipment then barter may not be the answer.

Create and update regularly a list of items that you presently acquire for cash and that are or may become available on trade. The trade broker can assist you with this on an ongoing basis. There are some items that are rarely available on trade. Don't try to reinvent the wheel. Concentrate on getting goods or services that are available and save cash in so doing.

The US dollar forms the basis of our financial system. There are things that will always require cash. The trade dollar is intended to only supplement the US dollar. It can do things that the US dollar cannot do.

There are two ways to benefit financially from a barter program.

The first is to barter through a trade exchange for goods or services that are offered on trade.
The second benefit, most often overlooked by those in the barter program, is the ability to acquire goods or services with the cash saved.

The combined benefits can make a significant difference in the profitability of any business, professional or non-profit operation.