Posted on March 4th, 2010
Originally posted by Shera Dalin
http://barterstrategies.wordpress.com/2010/03/04/barter-vs-haggle-the-dead-giveaway

Barter is the exchange of goods or services without the use of money. Haggling is negotiating a price for a good or service. How are they different? Here’s an example: When you go to a car dealership all ready to purchase a new vehicle, you probably dread dickering over the price with the salesperson. (If you love that, please let us know because we’re taking YOU with us the next time we have to buy a car.) All that back and forth makes most people nervous and uneasy; after all, you’re never sure you got the best possible price for the vehicle. In a nutshell, that negotiation is haggling.

If you were to walk into that same car lot with the intention to barter, you would have a very different experience. Before you went in you would have an idea of what sorts of goods and services you posses that might be useful to a car dealership. You would then ask to speak to the manager and explain that you’d like to trade your goods/services for a new ride. If you’re a mechanic, you could trade your skill in the repair shop. If you sell promotional products, you could trade coffee mugs, T-shirts or key chains with the dealership’s logo for your new wheels. That’s barter.

You may still end up haggling over the price of the vehicle because, let’s face it, rarely is the sticker price what the car is actually worth. Haggling is an integral part of the car purchase transaction. But you won’t haggle over the value of your mechanical skills or all those key chains. They have a set price and dickering isn’t part of that purchase. If the price you settle on for the car is $X, then the value of services/products you trade for your new wheels will be $X. That might mean you have to provide 1,000 hours of repair work or a few million little plastic key chains, but the value of those items will equal the price of the car.

Haggling can be part of barter. But barter doesn’t require haggling. So take a deep breath and relax. Bartering is way more fun than haggling and often the two won’t meet–not even for a blind date. Go ahead and give bartering a try. And leave that old haggle at home.

Posted on February 23rd, 2010
Originally posted by Christina Wedberg
http://americanaffairs.suite101.com/topiclist/article.cfm/bartering-in-the-21st-century#articleCommentForm

Throughout the history of mankind, when the availability of currency goes down, the practice of barter exchange goes up. Barter is a method of trade, where goods and services are exchanged, that are equal in value. Whether for work or for personal gain, anyone who has something of value to trade can be included in the bartering system.

Different kinds of barter groups are becoming more and more popular today. Some kinds act as intermediaries, like online barter clubs, which have developed a system of units of value that are equivalent to a monetary system. This system of units is known as trade dollars or barter dollars. Trade dollars can be accrued and redeemed for services offered through the barter club.

For others, barter occurs as a direct trade using similar goods in demand such as vacation houses or wedding services. Each person’s services can be mutually swapped for other services of equal value.

Bartering For Bridal Goods and Services

Bartering with local businesses has also seen a rise in the wedding market. People with professional skills or their own small businesses are targeting businesses in their area for wedding goods to barter. By planning wedding outside of the peak periods of May and June, potential barterers and vendors are more likely to trade because business may have slowed and there is extra inventory in stock. Also, getting married on a weekday rather than Friday, Saturday or Sunday will increase the chances of saving money.

Bartering Is Here To Stay

Overall, bartering has become an excellent way to exchange goods, services, and real estate in these days of low cash flow. People have begun to think out of the box in their endeavor to attain the things they need and want. The age old practice of bartering never really went away and as long as there are people with wants and needs, bartering in some form will continue indefinitely.

Posted on February 18th, 2010
Originally posted by Jane McGrath
http://money.howstuffworks.com/bartering.htm

The possibilities of the World Wide Web open doors for unlimited trading all over the world. Bartering is becoming popular again.

Remember back in school when kids would swap juice boxes for chips, or cookies for Twinkies? Even children have an innate sense that the comparable value of cookies to Twinkies is in the eye of the beholder. To the kid who gets cookies every day, the elusive cream-filled cake treat is worth more than a few, and he realizes his friend might feel differently.

iStockPhoto/Lisa F. Young
Trading lunches is commonplace at grade schools because bartering comes so naturally to kids.

Trading goods and services without the use of money is called bartering. Early civilizations relied on this kind of exchange. Even cultures in modern society rely on it. Think of people in prsion who commonly trade cigarettes for protection or extra food. For the most part, they don’t have cash. So, like people in pre-currency economies, they work with what they have.

But, since the advent of money-based systems, bartering is an option that most of us dismiss as soon as we get that first paycheck or allowance. Not so for a guy named Kyle MacDonald. He drew a media frenzy when, in a matter of one year and 14 trades, he bartered his way from a paper clip to a house [source: NPR]. Although he had a lot of help from his local government and some people in show business, his story offers dramatic evidence of today’s existing market for bartering. MacDonald is one of many people who have taken advantage of the growing phenomenon of bartering on the Internet. This ancient practice is also alive and well in services that facilitate bartering and companies that swap favors.

Posted on: January 29th, 2010
http://9humanities.wordpress.com/2010/01/29/some-basics-of-economics/

Let’s say you’re a farmer in the ancient Levant, and you want meat. The guy living just down the river is a hunter, and he wants vegetables. What do you do? You barter! You bring your vegetables, your neighbor brings his meat. You two come to an agreement about how many vegetables are worth how much meat. If meat is plentiful but vegetables are not, you’ll probably walk away with “more” than he will. But if meat is rare, he can ask for more vegetables. Once you’re both satisfied, you head home.

One day, you show up at his door with vegetables. However, it turns out he’s got plenty and doesn’t want any. You still want some delicious meat. He tells you that he could use new tips for his arrows. The local weaponmaker wants vegetables. You see a solution. You trade your vegetables to the weaponmaker for arrowheads. You then trade those arrowheads for meat. Everyone’s happy.

Of course, what happens if the weaponmaker wants meat? You’re left out of the trade. This isn’t unfair. Your goods aren’t worth anything to those two at the moment. So you either live off your vegetables, change from agriculture to another lifestyle, or find someone else to trade with.

Fortunately, vegetables, meat, and basic technology rarely become unwanted. So at many, many points through human history (even today! not just in ancient times!) bartering works.

How can you decide how much something is worth? It depends on the desires of the person involved in the trade.

We have released major new enhancements to BarterQuest. Two of the more important changes that we have introduced are account verification and the equalization of trading values by using points, a non-cash exchange currency.

As part of making BarterQuest a safe and enjoyable trading platform, we now encourage all users to verify their accounts.  There is a one time verification fee of $1.99 to complete the verification process.

Why do I need to be verified?

We want everyone to have a good experience when they trade with any of the thousands of other users on our site. Account verification increases the security of trades, providing greater confidence that you will get what you bargained for. When you verify, others will have more confidence that you are who you say you are. They will be more likely to trade with you. Moreover, you must verify before you can use points.

How do I verify my account?

Verification is fast and easy. The whole process should take less than three minutes.

We are using PayPal to process our account verifications. PayPal has a well earned reputation for keeping personal information safe. From our site, you will be redirected to PayPal, where you can either use your existing PayPal account to login or securely enter your billing information with a valid credit card. After PayPal processes the payment of the verification fee, we will capture your address and telephone number for our records. Your account will then be verified on BarterQuest and you will be able to use points.

There are several ways our site will direct you to the verification process:

• At the time of your first login, new users will be asked to verify their account. Account verification is not required at this point, but we encourage all new users to verify their accounts as soon as possible. As a verified user you are someone with whom other users are more likely to initiate trading activity. In short, you will be more likely to receive offers and more offers.
• For existing users, simply click the “My Account” icon on the upper right hand corner of the site. Under “Account Settings,” there will be a new link named “Verify My Account.”
• If a user tries to send or receive points  as part of a trade,  they will need to verify their account before taking this action.

Upon successful verification, the user will have a “Verified” checkmark next to their user name wherever it appears on the site.

What are points and why do I need them?

Points are our non-cash exchange currency. One point equals one dollar. You can purchase points at any time and your points can be redeemed for cash. You can “accumulate wealth” by trading for points and then use the points to acquire items.

The principal use of points is to allow you to equalize the value of a trade, for example, my item plus 10 points for your item. Consequently, points are best utilized when the parties believe that there is a significant difference in the value of the items to be traded. Points are not meant to substitute for your judgment that a trade is generally fair, that is, that you are getting something of equal or greater value to you than the item you are trading. If you try to be too precise in your valuation, your opportunities to trade can and probably will seriously diminish. This being said, points can represent a material portion of the total value of what you are offering or what you will receive (and, as previously mentioned, you can, in fact, offer points alone to acquire items posted on our site). As is the case with any offer, the owner of the item is never obligated to accept points as part of or in lieu of a trade.

Users are not able to request points alone as payment for their items. This is to prevent users from bombarding you with what amounts to solicitations for the purchase of whatever they have to sell. After all, you are on our site to trade, not buy.

The transfer of points from one trading partner to another is subject to our Secure Payment feature. Secure Payment is intended to provide you with greater assurance that if you use points in a trade (or alone for the acquisition of an item), you will not lose the points if you don’t get what you bargained for. It is a form of escrow, pending the satisfactory completion of the trade. Your trading partner will not be able to use the points in another trade or redeem the points for a period of 14 days following (1) the confirmation of a trade involving goods, (2) the completion date for services, or (3) the first occupancy date for real estate, unless you have decided to release the points earlier. If you dispute the trade during this period, the points will not be released to your trading partner until the dispute is resolved.

How do I purchase points?

There will be two ways you can purchase points:

• Under “My Account,” there will be a new section named “My Points.” This section will show all your points activity, like point purchases or the points you received in a trade – similar to a bank statement. Here, the user can purchase any amount of points for use when sending an offer, counter offer, or accepting a trade.
• If you send an offer (or counter offer) involving points, or if you receive an offer requesting points (in addition to your item) and want to accept the offer, the necessary amount of points must be available in your account or any deficiency will be pre-authorized for your purchase at that time. The actual purchase of any points necessary to complete the trade will occur only when you enter into a trade agreement (when the trade is confirmed).

We are very excited about the “re-launch” of BarterQuest and believe that the site is better than ever. Please let us know of any comments or questions you may have. Good luck and good trading!

International Revenue Service, US Department of the Treasuries:

Barter and Taxes

As with any discussion about taxes, it is always prudent to start by stating what you don’t know. I am not a tax expert and have no special expertise in the taxation of barter transactions. So please do not read this blog and accept it as advice. Rather, on a subject where there appears to be significant confusion, I am attempting to communicate my general understanding of the tax implications of bartering and seeking to initiate a dialogue.

First, it can be unequivocally stated that under the U.S. tax law there are tax implications when you trade. There may be reporting requirements and a completed trade can give rise to tax liabilities. This being said, the tax liabilities attendant to bartering will vary and can be less onerous than for a “buy and sell” transaction depending on a number of factors, including where you are resident and the types of items that are traded (goods, services, or real estate). In short, there may be real tax advantages to bartering.

Reporting requirements can apply both to the trading partners and to the trading platform (BarterQuest) that facilitates an electronic trade. While there are existing regulations, my common sense leads me to believe that the “rules of engagement” will be further refined as electronic barter matures. An analogy is eBay, where a ruling was issued only recently by the U.S. tax authorities that clarified which auction transactions require reporting by eBay. My interpretation is that, in essence, reporting by eBay was limited by the ruling to more material transactions or to recurrent transactions that suggest that a seller is engaged in a business.

While tax liabilities are the theoretical consequence of bartering, in a model where there is always, by definition, a fair exchange and no money actually changes hands, there are practical difficulties related to the determination of cost basis and market value. Has anyone made a profit? Again, I believe that the “rules of engagement” will evolve.

We at BarterQuest would like to take this opportunity to call upon our industry and other interested groups to work together toward a greater rationalization of the tax laws for barter transactions. This effort has special importance with respect to the application of such laws to routine transactions between individual consumers. These barter transactions not only may be critical to people who are looking for ways to save money or do not have the money to otherwise get what they need, but, in the aggregate, constitute a “green” machine that can have a material impact on the preservation of our environment.

One advantage of BarterQuest is that the site supports searching for trades both internationally and locally. How local should your search be? As with many things in life, there is often a trade-off  (no pun intended).

There are obviously certain situations which compel you to find a trading partner who lives around the corner. The item may be large (a piano comes to mind) and local pick-up is the only practical alternative or delivery costs to more distant locations would be significant, or the service requires someone to be physically present (acupuncture anyone?). But in many other cases whether your trading partner is your neighbor or further away is largely a matter of personal preference.

So why state the obvious? Because certain barter sites are limited to local alternatives and some users have been trained to assume that local is better. Community is good and there can be a natural comfort level in dealing with another person who lives nearby. But that comfort can be illusory and may come with a price. Stated simply, barter is a more efficient way to get what you want when there are more trading alternatives. The more alternatives there are, the more likely you will get the “best” trade, the one that will be the most responsive to your trading criteria and will provide you with the greatest value. That is why BarterQuest supports the exchange of all types of goods, services, and real estate: to open up the possibilities. And that is why you shouldn’t hesitate to caste your geographical net as widely as your comfort zone allows. As a result, your possibilities could essentially become endless.

Besides, it can be pretty cool (excuse the terminology; I am not that young) to trade with people from around the world. Maybe you can barter for the use of their house or apartment. At the very least, you can begin a dialogue with someone who lives in a different culture and may value things quite differently than you do…this could lead to very interesting and wholly unexpected trading opportunities.

My conclusion? Trade locally if you must as the result of factors related to delivery or if you want to maximize your sense of community. Trade without geography as an important limiting factor if you want to increase your trading alternatives and optimize the quality of your trades.

How to Put More “Green” in BarterQuest

As most of you are aware, a barter site is inherently “green.” Trading, by definition, involves the redistribution of goods and, therefore, runs counter to our disposable economy. This being said, BarterQuest can and should incorporate features that lend even more support to a user who wants to be environmentally responsible. Current features includes a category that define services that are specifically “Environmental,” sub-categories of services that have environmental implications, such as “car pooling,” and the ability to designate an item as eco-friendly by choosing this as one of its attributes. Other features that are being considered include tagging items as eco-friendly as part of the search function.

We are looking for ideas, whether to add additional categories, to enhance the functionality of our site as a “green” site, or otherwise. Any suggestions?

Some Thoughts on Successful Trading

While the BarterQuest Web site is intended to be user friendly, that is, to be as supportive and intuitive as possible, the fact remains that there are always things that we can bring to the table as users to develop our trading opportunities and complete trades.

First, take advantage of the features on the site to encourage trading activity, to increase either the number of offers you receive or the offers you make. The easiest way to do this is by posting as many items as possible, both haves and wants. And linking them. By enabling the site’s Matching engine, you are also letting other users know what types of items you have to trade and what you may want in return. The more items you post, the more offers that are likely to be generated. This can lead you to a trade for either these items or, after some back and forth and on site messaging, related items.

Second, spend the time to describe what you have, with the objective of telling other users the things you would want to know about the item if the item was theirs. Photos help, and are well worth the effort to upload.

Third, use the site to make your offers, accept offers, and confirm trades. Although it might be tempting to try to “talk yourself” into a trade, the site is designed to rationalize and provide discipline to the dialogue between potential traders. It focuses the process of negotiation, particularly in an e-market where you may very well have multiple trades that you are pursuing simultaneously.

Fourth, to the extent that you make more than one offer with the same item, you are obviously increasing your chances of a response. (Until you accept an offer for your item, you can make as many offers as you would like involving that item.) Return regularly to the site not only to identify what items have been newly posted, but to determine whether there is more information available that would help you to complete a trade. For example, are there additional wants that have been posted by your potential trading partner, is there more information about the item itself (perhaps in response to the questions of other users), or what other offers may have been declined? Frequency of trading activity begets frequency of trades.

Finally, the site rewards flexibility and supports negotiation. Persevere. You can respond to a declination with a counter offer. You can ask the other user why your offer was declined or whether they would be interested in a different offer, perhaps involving more than one of your items (and then formalize that offer). Don’t hesitate to chase an opportunity. And use the on site messaging system to move your trades along.

The Night After Christmas

Away to my laptop I flew like a flash,

And clicked onto BarterQuest (I had little cash),

Then lo and behold, Christmas gifts all in hand,

I traded for things, a ball and a band.

Never more will I keep the things I don’t need,

But trade and trade more, and so take the lead

In not wasting things and saving the earth,

The better to shout, as we ponder our plight,

“Happy Christmas to all, and trade through the night!”

Your friends at BarterQuest