Bartering is a medium in which goods or services are exchanged for other goods and/or services without use of money. Bartering has grown in popularity today with consumers and businesses realizing that it’s a very creative way to lower expenses. It certainly isn’t something new; bartering has been around for a very long time. It’s the way our ancestors conducted their daily business and how they survived.
Today the barter system can be used in a much more sophisticated way than ever before yet it carries with it the same basic motivation - the need for something that you don’t have and the excess of something that someone else wants. Using barter exchange business or a commerce network to negotiate for what you are looking for with what you can provide can help in many ways.
• Conserves cash: Liquidity or cash is very important in a monetary economy. When you use barter your goods or services replace cash and become your biggest asset. Suddenly your purchasing power is no longer limited to how much cash you have in the bank. Instead you are buying based on your potential to make new income – not your historic sales. You can barter to get advertising, supplies, or even to pay for services like accounting or taxation. Remember: a shortage of cash is not an unusual situation and is never anything to be ashamed of. Bartering provides a way for you to continue to exchange something of value (a service or product) for what you need.
• Helps create new customers: Not only does bartering conserve cash, but it can actually generate sales and profits as it helps you get new customers. In a barter exchange both parties make a sale to someone they wouldn’t normally have considered a customer. So, barter helps you reach to a larger customer base, create word-of mouth referrals from your newly satisfied customers and to provide you with a greater market penetration for your product or service.
• Bartering can help you get equity stakes: bartering for equity stakes in other businesses can be done by small and large businesses alike. If you are a start-up then you can offer shares in return for advertising, accounting services, office space, equipment or professional services. If you are a business with excess capacity you may like to invest this into a new enterprise and retrieve a return on your investment in the forms of cash dividends or eventual sale of your shares.
• Helps use unused resources: bartering helps you ensure that all your resources and services are being utilized to their full potential. Many times you may not realize it but there is potential in your business to grow.
• Mutual benefit: barter deals are mutually advantageous. Neither party has to part with much of their hard-earned cash to obtain the desired goods or services. Not only does bartering conserve cash, but it can actually generate sales and profits for both businesses involved. The barter model of business is based on cooperation rather than competition.
• No effect of recession: Barter remains unaffected during inflation. In many economies of the world during economic crisis barter replaces money as the method of exchange, when the currency is unstable and devalued by hyperinflation.
Brought to you by Neha Gupta
Marketing Department
Ormita Australia Limited
http://www.ormita.com.au
