How Barter Works

What is Bartering?

In simple terms, Barter means trading goods and services for other products and services.  In barter trading, money is not used as a medium of exchange. It can be a B2B deal between two parties or a dealing intermediated through a trade exchange. Especially in a situation where currency becomes unstable or during any monetary crisis, Barter is considered as an excellent method of trading.

How Barter Actually Works in the Current Economy?

Individuals and small business owners may prefer one-to-one bartering practices. Some businesses partner with organized barter trade exchanges that help them to connect with other members relevant to their business needs. These exchanges play an essential role in establishing and maintaining a healthy business relationship amongst its members. This way, they help in overcoming a lot of limitations associated with the traditional barter system. 

Today, barter trade through an exchange is being looked upon as an effective strategy for moving inventory, making use of excess production, increasing sales, and at the same time, conserving cash. Trade Credits replace cash. They are deposited in the accounts of businesses involved in barter trade. Goods and services are purchased from other members using these trade credits.  

The exchange provides expertise in how to strike a deal with other members and help in maintaining records and monthly invoices for each member. Exchanges can levy a membership fee or earn commission on each transaction from the buyer/seller or a combination of both. Ideally, the transaction fees are generally 12% on purchases. 

Today, the Internet has given an unimaginable reach to bartering opportunities – be it for individual exchanges or transactions facilitated through an exchange. There is no limit to what all goods and services that can be bartered – Clothing, Health Care Services, Technology, Gifts and Crafts, Financial Services, Legal advice, etc. 

Role of Barter Exchanges Like BarterFirst International

A barter exchange, in simple words, is a mediator between businesses. It functions like a bank that records transactions and various other dealings among its members. 

You can find Retail Barter Exchanges serving small and medium-sized businesses, and for goods manufactured by large corporations, there are Corporate Barter Exchanges can be helpful for both small businesses and large corporations. They serve as a marketplace where multi-party trading becomes possible. They eliminate the hassle for companies to find the exact match of the product and services they need. 

Barter Trade Dollars are used as the private currency within the exchange that allows trading without the need to involve actual money. The exchanges focus on getting more and more businesses to be associated with them so that each participating member can easily find relevant buyers or sellers for their goods or services. 

Barter trading has proven beneficial for businesses with excess & slow-moving products or services even more for manufacturers producing perishable products. The participating members of a barter exchange have increased their profitability when they trade using Barter Trade Dollars. This is because these Barter Trade Dollars allow businesses to exchange their products or services at full value, and at the same time lowering variable costs considerably. 

Helping Businesses Grow

We bring new customers to you through our Trade Exchange.  Our Business Networking Organization is made up of successful business owners who maximize their business potential by using barter to attract new customers and offset cash expenses.  New customers equal money for your business to pay for supplies and services that are needed to run your daily operations. Businesses of all sizes and industries, take advantage of barter to gain a competitive edge.

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