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What is Barter?

Barter transactions can be conduced through classifieds.
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  • Written By: Sherry Holetzky
  • Edited By: Niki Foster
  • Last Modified Date: 20 April 2014
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Barter is the process of trading products, goods or services, for other products, goods or services. It is a simple method of transaction, frequently one in which no money is exchanged. Barter systems are often utilized between nations, and sometimes between a nation and a corporation. Barter also occurs between corporations or companies and other businesses, and sometimes between a business and an individual, or two individuals. In the United States, billions of dollars worth of goods and services are exchanged each year through bartering.

Barter, also known as counter-trade, is an accepted practice that makes trading more convenient for nations that have difficulty with currency conversion, as well as for nations with fewer financial resources but sufficient commodities. For example, if a country produces plenty of rice, that country may exchange it with another nation to acquire another type of grain, or fruits and vegetables. On the other hand, one country might trade foodstuffs for textiles or oil.

Business-to-business barter often includes merchandise or services in exchange for advertising. A company may supply promotional items or a service for a TV, radio station or newspaper, and in return receive a set amount of airtime or a certain number of print ads. Other examples include trading advice for goods, or trading merchandise or services for stock.

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Business to consumer barter may include things like free merchandise for a customer who is willing to provide sales leads. Person to person barter can include almost anything you can imagine. Auction sites are a good place to find others willing to trade for things you have. Classified ads, online or in print, are another handy way of conducting barter transactions, and so are barter clubs.

Barter clubs, including online clubs, offer resources for businesses as well as individuals. They make bartering simple and convenient, but be aware that most clubs are for-profit businesses. Make sure the dues, fees or requirements are not so demanding as to defeat the purpose of bartering.

Although bartering seems like a great way to save money, or to avoid paying taxes, bartered goods and even most services are considered revenue and therefore must be reported in the year in which they are obtained. Consult with an accountant or the IRS for more information regarding how bartered goods are taxed.

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Discuss this Article

stl156
Post 6

I was surprised to read about the corporate barter system. I guess after the article explained it, it made sense, but I have never really thought about it. I think one of the most common types of barter services that people might be familiar with is companies that donate goods for school fundraisers.

At least at for my children, all of the little league sports are sponsored by different local businesses. They usually pay the cost of uniforms and donate a certain amount of snacks and such. In return, they get their company name on the jersey. The school often have fundraiser auctions and things, too, that are sponsored by the booster club. A lot of places donate laptops or other items in exchange for them mentioning that their company donated the product.

The whole bartering system is very interesting to me. I wish it was a more common practice overall.

jcraig
Post 5

@kentuckycat - Great example. Like you said, sometimes you don't realize you have a special talent that most people are willing to pay for.

As far as places to barter goes, I love going to flea markets and farmer's markets. I am lucky to live in an area that has a couple of flea markets within driving distance and a farmer's market that meets fairly regularly depending on the season.

I am always bartering for goods that those types of places, and I think in a lot of ways it is kind of expected. As far as my definition goes, I think just haggling for a better price still counts as bartering even if it is still a cash exchange.

Craigslist and local radio or newspaper classifieds are also good places to find bartering opportunities. I've found several good deals where I was able to trade something I didn't need around my house for something I really wanted.

kentuckycat
Post 4

@matthewc23 - I love being able to barter for things. You mentioned that you don't really have any specialized skills, but you would be surprised. Depending on your profession, think about any special training you have that a normal person wouldn't have. Some people would be willing to trade for that service. Even things you wouldn't normally think of as being services could be useful to someone else.

One good example that I have been a part of is that someone I was dealing with was an older gentleman and didn't have regular access to a computer. He could have gone to the library, but even then, he wasn't very comfortable with using Word. In return for getting whatever it was I wanted from him, I agreed to take the guy's information and make a resume for him. In the end, we both got a lot of benefit from the trade, and I'm pretty sure he got the job he was applying for.

matthewc23
Post 3

I recently read an article about bartering, and I am very interested. The problem I have is that I don't really know how to get started with it. I mean, you can't just walk into a restaurant or grocery store and start bartering with someone for things. I guess the thing I am wondering is where do people find situations where they can barter?

Also, does bartering only include trading goods or service for other goods or services, or can it also apply to just haggling with people to get a more reasonable price on things? I don't really have any specialized skills, but I do think I am pretty good at negotiating prices for things.

Also, does anyone have any good tips for bartering exchanges? Tips like where to even find people willing to barter and how to be successful at it?

anon94006
Post 1

Helpful article, thanks. I've switched over to bartering recently for most of anything I can get without having to shell out cash. There are a couple sites out there to use, to connect with people who are looking to trade/swap items or even services (carpentry work for auto work, etc).

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