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Everything you need to teach...and learn

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Business Bartering

Gain new customers while cleaning out your excess!

It‘s just good business.

 

Technology originally brought new life to the centuries old practice of bartering, but the economic crunch is now taking it to new heights. With business slow and money tight, more and more entrepreneurs are taking inventory of their excess and trading it for things like advertising and even roof repairs.

 

Even if your cash flow isn’t affected, it just good business to do a small percentage of bartering. Almost without fail, putting your name into a barter exchange network will reap you a new customer or two. Often new contacts are established that are mutually beneficial to both of you.

 

Another good reason to barter is that it’s a good investment. Keeping good books requires you to report barter transactions to the IRS, so let’s think this through. If you barter $2000 worth of goods for $2000 worth of goods, you report a $2000 income increase, but you also have a deduction for the cost of goods traded. If it costs you 50% to make those $2000 worth of goods, then you have a $1000 deduction. You didn’t just trade goods, you made $1000. Bartering is an avenue for sales that many never consider-and clean out the stockroom at the same time.

 

So how does it work? Barter exchanges vary about as much as auction sites. There are basically three things you will want to consider:

 

1. Reputation. There are several ways to check a companies reputation, and this is one area you will not want to neglect. IRTA.com is the clearinghouse for barter exchanges, and you can view a list of approved sites at http://irta.com/Portals/0/SearchMembership.asp

There’s also a directory at nate.org

 

2. Relevance to your business. You’ll want to browse what’s being offered, or who’s offering it to see if there is several trade possibilities for your business. If you don’t see at least 3-4 companies that might be interested in what you have to offer, then you might want to look at a different exchange. There’s hundreds of exchanges, and vary in what they offer the most of.

 

3.Fees. We all like free, but it’s true you usually get what you pay for. There are a few exchanges that are free, but most charge a final value fee from 5%(very low) to 15%, along with a monthly maintence fee of $10-$100/month, with the average being $15-$20. Some of the higher end exchanges will charge an upfront membership fee along with the other charges mentioned, which would probably be worth it if you are dealing with high ticket items.

 

If you are just getting started with bartering, there is a new one that is completely free right now because they are just getting started called U-Exchange.com/businessbarter. Starting with a smaller amount to see if it’s for you can’t hurt, and who knows, you might find some great connections or customers!