In the modern economy, almost all goods and services cost money. Bartering is a different kind of business in which people agree to get work or materials that they think are equal to what they offer.
Even though bartering has been around for a long time, it is still a common way for people and businesses to trade goods and services. It may help you to know what it means in modern society.
In this article, we give some examples of how it can be used in modern days!
#1 Commodity Barter
Export companies in two different countries make a deal to trade 400 tons of wheat for 300 tons of soybeans without any money changing hands. Deals like this can be made using a barter exchange or membership-based trading exchanges where exchanging goods and services are commonly rewarded with the equivalent fair market value of barter money.
Three popular barter exchanges are the International Trade Exchange (ITEX), International Reciprocal Trade Association (IRTA), and the International Monetary Systems (IMS). The estimated barter dollars you acquire from any barter transaction can be redeemed with other members in the exchange.
#2 3-in-1 Trade
Take a radio station that wants to find a cheap way to entertain its clients or the host. The station can sell advertising time and trade with barter credits for meals at a nearby restaurant.
The restaurant could use these barter credits to buy computer gear. And the computer company could trade its credits for radio ads. There was a buy-and-sell deal between three different businesses, but no money was ever exchanged.
#3 Rental Properties
Renters and owners of rental properties sometimes make deals where the owner lowers the rent in exchange for improvements being made to the unit. In this case, the exchange would be work for a management service, which would be equal to a “free” part of the property. Some of the most common things renters do to improve their homes are paint the walls, fix the plumbing, fix the structure, or remodel.
It’s also good to know that any value gained or “barter income” still counts towards your business’s gross income since the Internal Revenue Service (IRS) still needs to know whenever barter occurred. So yes, unfortunately, any value gained from services exchanged still counts as taxable income.
#4 Social Media Marketing
Professionals who know how to market on social media might be able to trade their skills with businesses. Most small businesses in a town or city only have a small presence on social media.
Increasing their reach on social media can help them make more money locally, nationally, and even internationally. Instead of money, these businesses might be willing to pay for effective marketing of the products or services they sell.
#5 Co-ops for Childcare
Child care cooperatives, where members take turns watching each other’s kids, can be helpful for professionals who also have kids. Each person in the cooperative trades time with kids for time doing other things.
With careful planning and talking, the members can find a balance between these two types of time by taking into account how many hours each person has put into the group’s child care.
#6 Time Banking
Time banking is a form of bartering that is similar to childcare cooperatives. It can be used for any service. A labor-time is the unit of money in time banking.
For example, if one person in the community does something for another person that takes three hours, that person owes that person three hours of another service. It’s basically a formalized way to keep track of favors and make sure everyone is on the same level.
#7 Skill Trades
There are lots of ways for skilled tradespeople to trade their skills. Most of the time, hiring a trade business costs more money than people or businesses are willing or able to pay. So, they might be willing to trade goods or services for plumbing, electrical, mechanical, or auto maintenance or repair.
#8 Writing and Editing
Writing and editing are two skills that are useful in a wide range of situations, since most jobs require clear and effective communication. People often have trouble with these skills and look for people who can help them write better documents.
Formal writing and editing services may be too expensive or impractical for professionals to use regularly, so they may turn to skilled people who are willing to barter.
Like writing and editing, graphic design and web design are in-demand skills that many businesses want but may not have the money to pay for. People with skills in these areas can offer their design services to these groups in person or through the internet. In return, they might get products that the business sells or ad space that can bring in paying customers.
People who work from home may be able to exchange their house-sitting services for temporary housing. They can find these opportunities through social media or networks that are just for house-sitting. With this kind of bartering, a person can travel and save money on housing costs.
Businesses also trade with each other, and the most common way they do this is through an advertising agreement. This could happen, for instance, if two different businesses in the same community each offered flyers, brochures, or other advertising materials for the other in their own commercial space.
Instead of giving and getting money, each business gives and gets publicity.
#11 Corporate Barter
Corporate barter is when two or more companies trade their assets with each other. It usually happens when a business has assets it doesn’t want anymore, like unused inventory or real estate.
When this happens, selling the assets may only get you back a small amount of their original value, so it’s often better to trade them for the assets of another company in the same situation. This kind of deal helps to cut down on the losses caused by assets that have lost value.
#12 International Trade
Bartering exchanges are also open to people who work for the government, in international relations, or in a related field. Countries that have some resources but don’t have others can make deals with other countries in the same situation.
Thailand and Iran have done this kind of trade in the past, with Thailand giving oil to Iran in exchange for food.
Barter transactions are a valuable and practical way for people and businesses to exchange goods and services outside of normal cash payments. From rental properties to online trading platforms, there are many opportunities to participate in bartering in modern society.
These 12 examples demonstrate the diverse and creative ways that a barter transaction can be used to meet needs and build relationships. Whether you’re looking to save money, reduce waste, or simply try something new, bartering can be a fun and rewarding experience.
So the next time you have a skill or product to offer, consider finding a willing trade partner and giving the barter system a try!