Money is a medium of exchange and a store of wealth. It is very easy to fall into the trap of thinking that no trade or commercial activity can take place without money, it simply isn’t so. In this age of economic uncertainty individuals and countries all over the world are once more discovering barter. So what exactly is it and how is it done?

China, India, Iran a Modern Example

1. Problem – China owes Iran $30Bn for oil.
2. Problem – India owes Iran $5Bn for oil.
3. Problem – International oil payments are made in $US
4. Problem – International sanctions for the last two years means no $US dollars can be paid over.
5. Problem – Trade ceases; OR DOES IT?
   

Resolution

Oil is vital to energy hungry developing countries like China and India so the way out of the crises brought on by sanctions is to negotiate an exchange of goods and services of equal value with Iran for past oil deliveries and future ones too, no ‘money’ changes hands. It is an example of a modern barter deal.

Trade without money?

While barter may seem an old fashioned way of trading in a digital world where billions of dollars flow across continents in a nano-second, but as you can see in the example above it still has its place in the economic toolbox of any nation, and of course any individual. It is not complicated and it is a simple truth.

You don’t need money to trade.

We are looking at barter systems for individuals, small business and communities, helping them trade anything, absolutely anything without the need for money. Money still has an important role in, but you don’t need it, what you do need is negotiating skill and faith in your trading partner.

Advantages And Disadvantages

Advantages

• Trade for skills, goods and services can take place without the need for money
• Encourages new business activity in the present expecting to be ‘paid’ for it at some date in the future.
• Empowers the individual to offer skills, labour and services when he or she has no money.
• The environment benefits because existing products are traded without the need to create new ones, conserving resources.
• Barter can be used as part of a deal letting you hold on to your money

Disadvantages

You have to remember that the disadvantages of barter are what caused ‘money’ in commerce to grow in importance, that said, with a little creativity and determination and the advent of the digital age the barriers to its increasing use are coming down.

• You have to find somebody who has what you want and of course they want what you have and at the time you are both looking.
• Once you have found a potential trading partner you need to agree how much of your stuff you are willing to trade for some or all their stuff.
• Barter between friends who know and trust eachother can be done in relative safety. Trading with strangers at the other end of the country who you have never seen before is a risky business.

Some Barter Systems Around The World

With the aid of digital technology and the internet the world of barter can be taken to a very sophisticated level:

Australia

Barter may have been a poor relation in recent times but that is changing. A Queensland company set up BarterCard in 1991 with the vision of becoming the worlds largest trade exchange. According to their site in 2005 the International BarterCard franchises had an annual turnover of AUS$1.2Bn.

United Kingdom

There are an astonishing number of barter and giveaway sites in the UK: inspired by environmental reasons, the desire to re-cycle stuff, and to avoid simply throwing unwanted things away. As users of the freecycle givaway system will tell you, no matter how unlikely the item you put online, you will probably find at least one person that wants it and probably a horde! It works. Barter is one step beyond and that works too. Here are a few sites to browse.

United States

BarterQuest

As you can imagine there are a huge variety of barter sites in the US and here we look at BarterQuest which has been in the news recently. The founders got together over a coffee and financed the website driven business which as yet makes no charge for its services, but will make micro charges in future per barter deal the users of the site make.

You can see their site here www.barterquest.com

What The Press Say

www.timesonline.co.uk- Money is dead – long live barter
www.telegraph.co.uk – Popularity of bartering websites soars

But I Have Nothing To Barter

Oh yes you do, everyone has something to offer. It can be an item that you no longer use, a service or a skill.

If you barter an item you no longer need, you not only remove a little clutter from the house but you save money, help someone else and get something you can really use in return.

If you are an artist or musician, you can barter your talent by offering  music or art lessons in return for what you need.

A skill can be something as simple as helping someone’s child learn how to throw that curveball or teaching the neighbour down the street how to use her new digital camera.

You may know of someone going away on holidays and they may need someone to walk the family pet, mow the lawn, tend to the pool, water the plants or anything around the house for that matter.

These are just a few examples but it just goes to show that you’re only limited by your imagination.

Money as a medium of finance and microfinance does not have to limit the use of barter in any deal. In fact it is capable of creating trade where there was no possibility of any before. The interest here is not to look at barterit from the perspective of large national and international institutions, but from the perspective of the labourer, tradesman, subsistence farmer trying to make their way in the world, educate themselves and build a better future.

Barter is a way of thinking and a valuable personal tool giving ordinary people the chance to help themselves. More case studies from the world of barter will appear on this site soon.

originally on http://www.vquestmedia.com/blog/living-the-good-life-through-bartering by Paige Mitts

Call me a diva but I am happy to admit that I love living the” good life”.  I love traveling all over the world, staying in the nicest places, eating fine food. I love being pampered, waking up and knowing that I don’t have to make the bed or wash my dishes.  I love vacation and adventure and excitement.  This year, we have photographed virtual tours in 26 states and have had so many amazing adventures along the way that a friend at church was watching our Facebook posts and asked our pastor if one of us was terminally ill.  He said it looked like we were checking off a bucket list!  Nope, just living the life of our dreams at our leisure.

The conundrum is that as small business owners, we don’t always have the budget or the time to do all the things we love.  We made the decision early in our relationship that we would live within our means.  For us that means we run our life and our business, Vision Quest Virtual Tours, on a cash only basis – no credit cards or loans.  We give 10% of our pre-tax, pre-expense income to charity and reinvest most of our profit back into our business.  You might ask how is it that we have stayed in villas and luxurious bed and breakfasts and mountain top cabins and flown in acrobatic bi-planes and eaten in fine restaurants and gotten massages?

It’s called bartering and it ROCKS!  Our high definition 360 degree virtual tours are a great way for businesses to improve their marketing efforts in a very cost effective way.  Luckily for us, many of the businesses that can benefit from our services are also businesses that have services we enjoy and benefit from.

Three keys to successful bartering are:

1. Provide an equal exchange of services
2. Agree IN WRITING what the terms of the barter will be ahead of time.
3. Make sure that the person agreeing to the barter passes the information on to their staff.

We calculate what we would charge for a virtual tour and then calculate what we would pay for that business’ services. If there is a difference, then we invoice or expect to be invoiced for the difference. Bartering should be a fair exchange of services where both people get the same value for their part of the barter. If we are offering a $150 virtual tour for a restaurant, then we need to be mindful of what we order…it’s not fair for us to provide a $150 value and then run up a $200 dinner tab.

It’s important to agree ahead of time IN WRITING what each party is providing for the barter.  One place we have found this to be important is in bartering for lodging.  We travel all over the country so rather than paying for generic hotel rooms every night, we barter with bed and breakfasts or boutique inns.  The room rates for a particular bed and breakfast can be as much as double from one room to the next so it’s important to clarify what you are providing and what you expect to receive in return.

I learned the hard way to clarify in writing that we are bartering for their lowest price room. We bartered with a bed and breakfast and when we arrived, they upgraded us to a private two bedroom villa because it was mid-week in their off season and the whole place was empty.  We were thrilled with our good fortune until we got ready to check out and were expecting to receive a rather sustantial check.  The owner expected that since they were upgraded to a villa that would have cost $300 a night, then our charge would be waived.

We would have never expected a $300/night villa but more importantly we would have never ACCEPTED the $300/night villa had we realized they meant it to replace our fee.  If we weren’t bartering, we would have gotten a hotel room for around $75 and charged them our normal price.  We love staying in nice places but our budget is what it is and we are on the road to make money.  That particular photo shoot was a multiple day job which meant that we weren’t available to shoot other jobs.  Part of calculating the value of a barter is to calculate the lost opportunity cost for the time you are spending providing your end of the barter.  Unless you are bartering on your free time, then you are not giving or getting something for free.

The latest thing we have learned from experience is to make sure that the business owner communicates to their staff that we will be coming to barter.  We recently showed up to photograph a restaurant and were expecting the owner to be there when we arrived.  Not only was he not there, no one in the restaurant had any idea that we were coming.  Luckily they were able to get him on the phone but we would have wasted a great deal of time had this not been the case.  Lesson I learned is that I should have sent a confirmation email stating the terms of the barter and asking him to respond so we knew we were all on the same page…then had that email available when I arrived.

Bartering is a great way to experience things that your budget would otherwise not allow.  There’s no guarantee that a business will be interested in trading services but if you don’t ask the question, the answer is definitely no.

For many families, cash is tight. But that doesn’t mean you have to forgo getting products or services that you need. One easy way to get without spending is to barter. Trade what you’ve got for what you need, and everyone’s happy, with no money ever changing hands.

Bartering has been around forever, and enjoyed popularity during the Great Depression, when families who didn’t have cash would pay with things like eggs from the chickens they kept in their backyards. But bartering is back on trend, in part because of the difficult economic times we find ourselves living in.

In her book “Money Secrets of the Amish”, author Lorilee Craker writes that the Amish are known for their amazing ability to save money. After interviewing many Amish people, she found that one of their “money secrets” was that they made a habit of saving cash by bartering – trading quilts for buggy parts or whatever. But even if you’re not Amish, you can learn from these plain folk who have more money in the bank than the average American.

Here’s how to start bartering (and thus saving cash):

Assess what you’ve already got: do you have stuff that is sitting around unused, but is still good? For example, maybe you have a bike, but you never ride it. You would, but you’re too busy learning to play tennis. Could you barter your bike for something you want, like a tennis racquet? Or tennis lessons? In her book, journalist Craker describes an Amish couple who traded home-made rag rugs for a cow – which probably isn’t something most of us would be able to do (or even want to). But the principles of bartering apply to anyone.

“Whereas in the Depression people struck deals in tools, chickens, and milk – essential provisions and supplies – now traders will offer personal training sessions for scuba gear or a Pilates lesson for a borrowed trailer hitch,” she writes. (p. 200)

Assess your skills:

Even if you don’t have stuff to trade, you might have abilities to bring to the table. What skills do you possess? Do you know how to paint a room? Sew a dress? Organize a home office? Write down skills you have that have value.

“The question is, what am I good at, and what could I trade for something of equal value? What are you good at, and what could you negotiate for something of worth?” Craker writes.

Find someone who needs what you’ve got: this is where bartering websites are helpful. Craker points out that from 2009 to 2010, bartering postings on Craiglist.com increased 100 percent. Her book also lists several bartering websites:

Let people know what you have to offer: Post what you are offering on one of the bartering websites out there, and you may be able to strike a trade with strangers. But one of the benefits of bartering, Craker asserts, is that it builds community. When done properly (without trying to take advantage), bartering can be a way to build friendships with neighbors. So don’t be afraid to talk to neighbors and co-workers about bartering. One way to do that is a swap party.

Your own private swap meet: A great way to get things going with bartering is to host a swap party in your home. Whether you gather to trade kids’ clothing, books, craft supplies or whatever, you can cleanout your clutter and find some new treasures, for free. Everyone simply brings things they don’t want, and can pick through the items others have brought, to find things they need or want. The side benefit is that, like the Amish, you are building connection and community while getting things you need.

In summary, bartering is a way to keep your cash in your pocket but still indulge in getting things you need or want. It’s also a way of making new friends – and you can’t put a price on that.

Actually, bartering is more their style.

The couple has traded chiropractic sessions for welding work on their RV, a washer and dryer for tools and are seeking help on a website in exchange for contract work or wellness consultations.

Trading is a way to keep cash in their pockets, said Ghislain Thomas.

“I really believe in it, we’ve been bartering for many, many years,” he said. “These days money is a little more difficult, it’s hard to sell. But when you’re asking people for something and you have something they want, it’s easy to trade.”

With cash and credit tight and bills always looming, the age-old practice of bartering has increasingly become a viable and even preferable method for individuals and businesses looking to exchange goods and services. Bartering websites have sprung up to serve local and national markets and barter exchanges, which serve businesses, have seen steady growth.

While the most vibrant barter markets are in bigger cities, the trend is starting to take hold in smaller population centers such as the Four Corners. Case in point: a barter website for the region, fourcornersbarter.com, launched last month.

“Just about everyone I know has done some type of trading,” said Mitch Schneider, creator of site. “Now that times are tough, it’s becoming more and more prevalent.”

The alternative market

The tough economic climate has played a major role in the growth of the practice.

The International Reciprocal Trade Association estimated that $12 billion was traded in 2009-2010, up from $8.25 billion in 2004.

Especially in a recession, bartering provides an alternative marketplace for businesses to profit on unused capacity, said Ron Whitney executive director of the association, a nonprofit that regulates and provides standards for trade and barter-service companies.

In this economic climate, many hotels, for example, may be able to fill only 50 percent of their rooms most nights, Whitney said. Barter exchanges may allow them to sell some of those extra rooms in exchange for goods and services they normally would have paid for with cash.

The end result is more occupied rooms and hopefully more cash in the bank, he said.

“The bad economy has caused a lot of people to look for new creative solutions,” Whitney said. “The organized barter and trade industry that has been there for 30 years is actually one of those solutions.”

Vacation homes and cars

Craigslist also has barter and trade sections that feature sometimes hundreds of listings each day while other websites like BarterQuest, SwapAce and U-Exchange target bartering specifically. The sites feature various strategies to simplify the process of connecting traders and facilitate their exchanges.

Since the beta version started in 2006, BarterQuest has seen double-digit growth, said Michael Satz, one of the site’s founding investors. People use the site to trade everything from computers and cars to life coaching and vacation homes, he said.

Beyond the cash-saving benefits, the practice of trading goods can be attractive because it is a very green endeavor,” Satz said.

“You’re not constantly buying things with the accompanying costs of manufacturing and distribution,” he said. “It’s a counter to the disposable economy by finding value with things that may not have value for you but have value for somebody else.”

Even though it doesn’t include a cash transaction, bartering still counts as business and can be taxed, said Internal Revenue Spokesperson Karen Connelly. Just like other transactions, barter activities may result in ordinary business income, capital gains or capital losses, she said.

The stuff culture

For most people, bartering is easier than they think simply because we all have a lot of stuff, Thomas said.

“We found out there’s always something you have that you would be ready to trade,” he said. “It’s easier than money.”

Since he started bartering a year and a half ago, Cortez resident Mark Hadsell said he finds himself constantly trading dirt bikes, three-wheelers and anything else with a motor.

Many times, the trading process “just works out easier,” he said.

Schneider said that around the Four Corners, the trading of services – say, carpenter work for financial work – is what he sees most often.

The Four Corners Barter website aims to bring all those transactions into one place, like a bulletin board, he said.

“It’s a way to bring people together, it will help out on both ends,” he said.

There are three ways to enter the giveaway for a chance to win the $100 Amazon Gift Certificate:

• You can retweet at least one of BarterQuest’s tweets on Twitter.
• You can become a fan on the BarterQuest fanpage on Facebook (http://www.facebook.com/BarterQuest) and post on the wall something you want to trade.
• You can also enter the giveaway by registering on BarterQuest.com and inviting your friends to the site.

You do not have to be a user of BarterQuest to enter. Contest rules can be found on http://www.barterquest.com/home/article/giveaway-rules-chance-to-win-amazon-gift-certificate.

“This is part of our continuing effort to attract people to our site and reward those who have already discovered us,” stated BarterQuest’s President and CEO, Dr. Paul Bocheck. “BarterQuest remains unique in the technology and features that can make trading easy. Whether you’re a mother looking for clothes or accessories for your children, someone seeking a vacation home or a person wanting a car without the need for cash, our site can be the best way to do it. We hope our promotions encourage more people to find the advantages of barter.”

About BarterQuest

BarterQuest supports the cashless exchange of all types of goods, services, and real estate. BarterQuest provides a trading platform based on proprietary technology (patents filed) that instantly matches the haves and wants of users for two party and multi-party trades. Barter is facilitated by a user friendly Web design that is unique in its combination of features that support trading. BarterQuest is headquartered in New York, NY and is owned and operated by JPM Global, Inc., a Delaware corporation. For more information, visit www.BarterQuest.com.

Except for historical information contained herein, this news release may contain forward looking statements that are subject to risks and uncertainties.
Vendors seeking further information, please email: vendors@barterquest.com.

Bianca Han, Executive Vice President
BarterQuest
231 West 29th Street
Suite 906
New York, NY 10001
212-279-0070
bhan@barterquest.com

Media
Gutenberg Communications
Kerri Hazama
212-810-4168
kerri@gutenbergpr.com

“B2B barter is a large and well established market,” stated Dr. Paul Bocheck, the CEO of BarterQuest, “but until now was limited by old design and technology. By using our proprietary matching and trading engines, businesses can easily find and execute their trades without relying on a broker to bring them together. At the same time, we are the only site that not only introduces businesses with other businesses, but also provides businesses with a bridge to consumers as potential customers. Further, businesses are able to use points, our secure onsite currency, to supplement the value of the items offered for trade and, therefore, do not have to wait until they can find goods or services of equal value for an exchange. Moreover, points can be used by both consumers and businesses to purchase the goods or services which businesses are offering.”

About BarterQuest

BarterQuest supports the cashless exchange of all types of goods, services, and real estate. BarterQuest provides a trading platform based on proprietary technology (patents filed) that instantly matches the haves and wants of users for two party and multi-party trades. Barter is facilitated by a user friendly Web design that is unique in its combination of features that support trading.  BarterQuest is headquartered in New York, NY and is owned and operated by JPM Global, Inc., a Delaware corporation. For more information, visit www.BarterQuest.com.

Except for historical information contained herein, this news release may contain forward looking statements that are subject to risks and uncertainties.

Vendors seeking further information, please email: vendors@barterquest.com
Bianca Han, Executive Vice President
BarterQuest
231 West 29th Street
Suite 906
New York, NY 10001
212-279-0070
bhan@barterquest.com

Media
Gutenberg Communications
Kerri Hazama
212-810-4168
kerri@gutenbergpr.com

Bartering is now becoming a popular business solution in Canada and the United States, here are some additional advantages.

Bartering offers a number of financial advantages to those companies that do it. Bartering:

• Improves cash flow: When you can avoid spending money for goods and services that you need to run your business ‘” resulting in a decreased flow of cash out of your company ‘” you’re improving your cash flow. Remember, however, that every business needs cash to function. Trying to run a 100 percent barter business wouldn’t be practical ‘” you must have cash available to pay employee salaries and pay vendors who aren’t in the mood to accept whatever you have to barter. (For example, good luck trying to get your local electric utility to accept printed circuit boards in lieu of cash when it comes time to pay your electricity bill or to get your employees to split 10,000 pounds of goose down in lieu of paychecks!)

• Frees up cash for other uses: Bartering enables you to conserve cash, freeing it up for other uses. If, for example, you need to purchase photocopiers and personal computers, and you’re able to barter some of your own goods or services for the photocopiers, you’ll have more cash available to purchase the personal computers you need. You then have several options available: Either buy more computers, buy better computers, or simply redirect the cash savings to another purpose.

• Converts excess inventory: Finding yourself stuck with excess inventory is not difficult. All it takes is an unexpected downturn in the economy, a change in buyer preferences, or an unseasonable change in the weather, and your shelves can be chock full of product that’s going nowhere fast. Bartering can help you convert this excess inventory into something that your company really needs while putting your inventory to productive use.

These reasons alone compel many companies to make barter a part of their financial mix. By reducing the need for cash, bartering can reduce your need to secure financing from outside sources ‘” creating a  healthier bottom line for your company.

To win a $25 Amazon Gift Certificate, post on BarterQuest at least one item you HAVE to trade and share it on our Facebook page or invite a friend to BarterQuest. You may enter multiple times each time you post and share it on Facebook or invite a friend.

You do not have to trade on BarterQuest to enter. Contest rules can be found on http://www.barterquest.com/home/article/giveaway-rules-win-a-25-amazon-gift-card.

“As more people discover our barter site,” stated Bianca Han, Executive Vice President, “we want to encourage them to post the items they have to trade. Posting doesn’t obligate you to do anything and it’s free. On the other hand, unless you post you cannot trade, and you never know the offers you may receive. One or more can very well be the ‘offer you can’t refuse’.”

About BarterQuest

BarterQuest supports the cashless exchange of all types of goods, services, and real estate. BarterQuest provides a trading platform based on proprietary technology (patents filed) that instantly matches the haves and wants of users for two party and multi-party trades. Barter is facilitated by a user friendly Web design that is unique in its combination of features that support trading. BarterQuest is headquartered in New York, NY and is owned and operated by JPM Global, Inc., a Delaware corporation. For more information, visit www.BarterQuest.com.

Except for historical information contained herein, this news release may contain forward looking statements that are subject to risks and uncertainties.

Vendors seeking further information, please email: vendors@barterquest.com.

Bianca Han, Executive Vice President

BarterQuest

231 West 29th Street

Suite 906

New York, NY 10001

212-279-0070

bhan@barterquest.com

Media

Gutenberg Communications

Kerri Hazama

212-810-4168

kerri@gutenbergpr.com

Barter’”exchange of a product or service for another product or service rather than a cash payment ‘” has been around for a long time. Before humans invented the idea of money, they traded things of  value to obtain things of value. If someone had a nice mastodon hide gathering dust in her cave, for example, she could trade it to one of her neighbors for several baskets of fish or perhaps some bone tools.

Bartering has come a long way since those ancient times, and nowhere is this more the case than in business. According to industry statistics, in North America alone, more than $7.5 billion in sales are transacted each year by the commercial barter industry, comprising more than 300,000 businesses.

In the world of business, three primary flavors of barter exist:

• Small business exchanges: These barter exchanges bring small-store owners and small retailers together to trade among themselves to avoid having to pay cash for needed supplies and services. Approximately 400 small business exchanges exist in the United States today.

• Corporate barter: Corporations barter a wide variety of products and services to liquidate excess inventory, utilize idle capacity, expand sales, and penetrate new markets while increasing cash flow and conserving precious working capital.

• Countertrade: Countertrade occurs when large multinational companies (think IBM) are required by countries with weak currencies or by law to take partial payments in the form of goods rather than cash.

An increasing number of businesses are making barter an important part of the way they do business. You can, too.

Although bartering goods and services does not generate cash (and therefore is not a source of capital per se), it does enable companies to conserve their cash ‘” spending it only when and where they absolutely need to do so. It’s no wonder, then, that the catchphrase of companies that have integrated bartering into their financial planning is, “Think trade first!”