Barter Exchange Allows People To See Your Business Inexpensively
The smart business owner, sensing the slowing of the economy and tightening cash flows, will investigate methods for reducing excess inventory and obtaining necessary goods and services with less outlay of scarce capital. One of the best ways for doing this is to barter with other businesses.
This method has been around since the beginning of time. You don’t need cash if I have what you want and you have what I want. In the olden days, people would trade an animal such as a sheep or a goat. In this day and age, it is different because it is modern times now. I might be looking for a computer and your delivery vehicle might need new tires. I am in the advertising business and you are in the pizza business. This is how bartering for business becomes a smart move for all of the people involved in the trade.
This is the reason why smart business owners join a barter exchange. These organizations are like a clearing house for the businesses that are members of the barter exchange, similar to a bank, maintaining a running tally of both credits and debits as the member businesses barter with one another. There is usually both a monthly fee and an initial membership fee, the barter exchange will also likely charge a small percentage fee on each transaction for operating costs.
Your products will be sold at full retail value through the exchange. Since no discounting occurs you retain the full value of your goods and services, which is also good for increasing the productivity of your business as downtime and unused capacity are changed into credits in the exchange.
The other benefit of joining a barter exchange is that your business is marketed to the other members. It is like receiving free advertising or having an extra sales person. Once they find your services or product usefule, members of the exchange will refer your business to their friends and will likely become your cash customers as well.
You need to be aware however, that just because there is no actual cash changing hands, it doesn’t mean it isn’t taxable. Bartered goods and services are treated similarly to cash transactions under U.S. tax laws. You will receive a Form 1099B to use to prepare your income taxes and you must report this income on your return. But don’t let this minor detail deter you. The advantages and benefits of using bartering far outweigh any of the inconveniences.
Joining a barter exchange is a wise choice for the majority of businesses, and is especially beneficial for cash poor startup companies. This service helps to increase your customer base, and help you obtain goods and services while preserving capital. Established businesses can benefit from the exchange as well, through an expanded customer base, increased sales and a decrease in excess inventory.
Bartering is the best way for business owners to clear out excess merchandise and acquire needed merchandise Bartering means exchanging something you need with something the other person needs. Bartering for business allows you to work with other network members to create a marketplace. Join a barter exchange which is a clearinghouse for member companies. Each exchange tracks its clients’ credits and debits as they barter. Your products sell at full retail value. This also helps you increase productivity and allows you to market yourself to other members. Bartered goods and services are treated similarly to cash transactions under tax laws. However, the advantages far outweigh the inconveniences.
- Terry Lamb
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