BARTERING

Barter is an act of trading goods or services between two or more parties without the use of money —or a monetary medium, such as a credit card. In essence, bartering involves the provision of one good or service by one party in return for another good or service from another party. Bartering is based on a simple concept: Two individuals negotiate to determine the relative value of their goods and services and offer them to one another in an even exchange. It is the oldest form of commerce, dating back to a time before hard currency even existed. Bartering can have a psychological benefit because it can create a deeper personal relationship between trading partners than a typical monetized transaction. Bartering can also help people build professional networks and market their businesses. To value a service, call around for local estimates from professionals to find out how competitively you can price your abilities. Remember to be honest about your skills and to factor in costs associated with the exchange; for example, shipping (for goods) or materials (for trading a skill). After you know what you have to offer and exactly what you need/want in a barter situation, find a barter partner. If you don't have a specific person or business in mind, try word of mouth. Let your friends, colleagues, and social network know about your specific need and what you want in a barter situation. Use Facebook, LinkedIn, and Twitter. Check online swap markets and online auctions that have a bartering component, such as Craigslist.com (check under "For Sale" for the Bartering category), Swapace.com, and Barterquest.com. Also, check for local bartering clubs. Your local Chamber of Commerce may be able to provide you with information on similar clubs in your area. Make the deal: After you've found a barter partner, get the agreement in writing. Make sure you detail what services or goods will be involved, the date of the exchange (or work to be done), and any recourse if either party reneges on their part of the deal. If you are working through a membership-based bartering association, they will likely provide all the structure and paperwork you need for the deal. Limits of Bartering Bartering does have its limitations. Much bigger (i.e., chain) businesses will not entertain the idea and even smaller organizations may limit the dollar amount of goods or services for which they will barter—they may not agree to a 100% barter arrangement and instead require that you make at least partial payment. Some businesses that may not directly barter with customers might swap goods or services through membership-based trading exchanges such as ITEX or International Monetary Systems (IMS). By joining a trading network, which often charge fees, members can trade with other members for barter "dollars." Each transaction is subject to a minimal fee; the exchange facilitates the swap and manages the tax components of bartering, such as issuing 1099-B forms to participating members. You may find a nearby exchange through the International Reciprocal Trade Association (IRTA) Membership Directory. Before you sign up and pay for a membership, however, make sure that members offer the types of goods and services you need. Otherwise, you may find yourself with barter money or credit that you cannot use. SPONSORED Find the Right Financial Advisor For You Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is legally bound to act in your best interests. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.