Last Updated on November 13, 2022 by Selina Parker
Getting the best quality supplies is essential to every business’s success. But if your business is cash-strapped, it may be hard to cover the cost of these supplies. You can find the best products and services through a barter exchange while helping each other’s businesses. You may be surprised at how much value it can offer.
This article highlights 11 things you need to know about the barter system as follows:
- Make a list of what your business needs
- Determine what you can give in exchange
- Research how much it would cost if you purchased these items
- Make an appealing offer
- Trade with other businesses that are in the same industry as you
- Find out what your competitors are trading
- Don’t make unreasonable offers
- Give a great first impression
- Search for someone interested in your services
- Follow-up with the other party
- Don’t barter with someone that is not reputable
WHAT IS A BARTER EXCHANGE SYSTEM AND HOW DOES IT WORK?
A barter exchange system is where goods or services are directly exchanged for other goods or services at a fair market value without using a monetary medium, such as money.
Barter exchange can occur on an informal one-on-one basis between individuals and businesses, incorporate barter exchanges, or within a marketplace environment at a market – with traders offering their products or services in exchange for each other’s products or services.
Bartering occurs on a bilateral basis but may be multilateral (e.g., regional trade agreements). A barter system is widely popular during a monetary crisis, which helps keep the country functioning.
The barter economy is very different from the monetary economy because barter occurs without a cash transaction. How can you make the barter exchange system to your advantage as a business owner?
HOW TO USE BARTER EXCHANGE TO GET THE BEST SUPPLIES AND PRODUCTS FOR YOUR BUSINESS
1. MAKE A LIST OF WHAT YOUR BUSINESS NEEDS
First, you have to identify your business needs. For example, barter with a local stationery store if you’re looking for writing utensils and paper. You could trade services like your web design skills or digital marketing knowledge in exchange for pens and notebooks without using physical money. Or, if you need a particular product or service, find someone offering it and barter with them.
2. DETERMINE WHAT YOU CAN GIVE IN EXCHANGE
Before bartering, you need to consider what the other party is interested in receiving in return for their goods and services. If you are looking to get new supplies, think about what you have that someone else might want. Such a deal should be a mutually beneficial arrangement.
3. RESEARCH HOW MUCH IT WOULD COST IF YOU PURCHASED THESE ITEMS
To ensure you are getting the best deal in a direct exchange, do some research to determine what these products or services would cost if you were paying money for them. If you’re looking for supplies, compare prices between wholesale suppliers and retail outlets. Or, if you’re looking to get new clients for your business, look up how much similar companies are charging their customers.
4. MAKE AN APPEALING OFFER
Make your offer irresistible so that the other party will give you the best of their product or service. If you want to get the best supplies for your business, consider what you have that would be of value to another party. Perhaps you can offer your web design services in exchange for office supplies.
5. TRADE WITH OTHER BUSINESSES THAT ARE IN THE SAME INDUSTRY AS YOU
The best way to get the supplies you need is by bartering with firms in the same industry as yours. If you’re in retail, try to trade with similar shops that sell the kind of products or services your business needs. If you’re in media, find out if any publications or sites might be interested in your web design skills.
6. FIND OUT WHAT YOUR COMPETITORS ARE TRADING
By knowing what your competitors are bartering, you can come up with better offers for similar products or services. Find out what they are trading and use this information to figure out how to get the best value in return.
7. DON’T MAKE UNREASONABLE OFFERS
If you are making an offer, make sure it’s one that the other party will be interested in accepting. You might have to inquire with several people before finding someone who has what you need. If you make a limited offer to the other party, they might not even consider it.
8. GIVE A GREAT FIRST IMPRESSION
It would help if you showed credibility and integrity so that others will believe you when you say you’ll follow through on your promises. If you have a poor reputation, it can be not easy finding someone willing to barter with you. If you have no experience with barter exchange, start small with someone who has a good reputation, and you’ll soon learn the ropes.
9. SEARCH FOR SOMEONE INTERESTED IN YOUR SERVICES
To find someone you can do barter exchange with, search online for local businesses in your area and send them messages about what you’re searching for. It’s essential to be clear in these communications to avoid misunderstandings. Do not agree to a deal until you have everything worked out and ready to go.
10. FOLLOW UP WITH THE OTHER PARTY
Once you seal a deal, make sure you follow through on your end of the swap. Please don’t give them a reason not to trust you in the future. Make sure that you stick to the terms of the agreement and that the two parties are satisfied with it before you move forward.
11. DON’T BARTER WITH SOMEONE THAT IS NOT REPUTABLE
Remember that barter exchange is only beneficial if the other party is someone you can trust. If a person or business has a reputation for not following through on its promises, it’s best to avoid bartering with them. Trading partners should build trust.
To ensure you are doing transactions with reliable people, consider contacting the International Reciprocal Trade Association (I.R.T.A.).
As you can see, barter exchange is an excellent way for businesses to get the materials they need at a more affordable price. Before you start bartering, though, make sure you research what products or services are of value to others and the fair equivalent of what you can give in return.
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ABOUT THE AUTHOR
“What began as a life and career coaching services company to aide entrepreneurs through the early-stage challenges and tough transformations of starting a social venture has evolved over the years to include mergers and acquisitions, organizational consulting, and business growth advisory services to mission-driven organizations that strive to improve access to basic physiological, safety, and security needs while increasing their profit margin. Clients include founders and organizations with the purpose of addressing deficiencies in delivering quality healthcare and mental health services, sufficient employment, access to clean water and air, safe shelter, adequate food, and more.”