Done any bartering lately?

Localsbarterbeerforfood

As the economy worsens, individuals and small businesses are turning to barter in steadily increasing numbers. The image above is from http://news.bbc.co.uk/2/hi/uk_news/england/norfolk/7560246.stm

Bartering has usually been done on a one to one basis or through barter exchanges that charged a fee. Now there are free online barter exchanges which are generating a lot of interest. Smarterbarter.com and favorpals.com are just two of these free online barter exchanges.

This 2008 article on Thomasnet still applies today.

Before there was money, credit cards and loans, people relied on bartering. Today, as tight credit conditions squeeze cash-strapped businesses, many businesses are rediscovering the benefits of small-biz bartering.

Bartering has come a long way since farmers and merchants gathered at bazaars to trade their harvest and wares. Nowadays, many modern businesses trade through barter exchanges online, though one-to-one bartering transactions still occur.

Small Biz Owners Revisiting Age-old Tradition: Bartering By Jorina Fontelera  

Bob Bagga, the President and Chief Executive Officer of BizXchange, has an interesting viewpoint on efficiency:

At its base, barter is an efficiency tool, which is why so many companies are now discovering it—everyone’s working to become more efficient to weather the storm.  People are discovering they can use barter to pay for a wide variety of products and services for which they are accustomed to writing checks, including advertising, capital expenditures, commodities and assets.  They’re also realizing that using barter helps bring in new cash-paying customers.

Unemployment and tight credit are spurring an increasing interest in barter. If you have skills or products that others might need, consider bartering them for goods and services you need.

As disposable income shrinks to the vanishing point, I found that barter is a welcome way to service customers who have been hit by the faltering economy.  I am bartering custom framing services every week for goods and services.

I am also bartering labor for firewood. I have more hardwood logs than I can burn this year. If someone wants to cut the logs into stove lengths, they can take half of what they cut. I have been doing this for a year now and it has worked out for all concerned. Since I have a log splitter and a chainsaw, one person can cut and split two truckloads of wood in a day. I keep one and they drive away with the other.

Barter has shortcomings like lack of portability and transparency, but these are being addressed through use of online barter exchanges. Some communities are also facilitating barter through "local currencies".

I plan to write other posts on the subject of barter. If you have any suggestions, please send them along.

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0 Responses to Done any bartering lately?

  1. mattbg says:

    It’s an interesting and more fundamental way of doing business. I guess the obvious question is: what about taxation? We have a system that is so dependent on it now that if this ever took off in any meaningful way, would it be made illegal? 🙂

  2. IRS says if you barter one dollar for business it is taxable. If you trade with your next door neighbor it is not taxable.
    Trade exchanges like Barter Bucks.us are regulated by IRS and are required by law to report all trade at the end of the year by 1099. IRS also says a trade dollar = a barter dollar. Trading is 100% legal as long as you follow the laws.
    When there is little cash in circulation like now trading becomes very valuable. Businesses still need to repair their cars and get dental care. Trading extra time or unused inventory is a win win for everyone.

  3. Jct: When the barter currency links to the Time Standard, it goes global.
    When the local currency is pegged to the Time Standard of Money (how many dollars per unskilled hour child labor) Hours earned locally can be intertraded with other timebanks globally! In 1999, I paid for 39/40 nights in Europe with an IOU for a night back in Canada worth 5 Hours.
    U.N. Millennium Declaration UNILETS Resolution C6 to governments is for a time-based currency to restructure the global financial architecture.
    See http://youtube.com/kingofthepaupers on growth of the international time-trading network.

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