"Cash is king but barter is the next best thing" True or False?
This is a popular saying in the barter industry but it may not necessarily be true, there are different methods of bartering.
1. Non-reciprocal barter is when a person joins a barter exchange and purchases and sells their products/services with a form of barter credits. Many times prices get inflated because with a barter exchange there is a membership fee involved and a percentage taken on transactions (which is paid in cash btw)
Non-reciprocal barter can be less work and a great way to move excess inventory. So if you would have been left holding the stock, the above statement would be true. It's better to move your goods and recieve barter credits so that you may purchase other goods or services for your business.
2. Reciprocal barter does take more effort because you must find someone willing to exchange for the items or services you have to offer. When you reciprocal barter for business purposes, the advantage is that your profit is taken off of your expenses.
For example if you trade $1000 worth of goods or services and your profit is 30%, the real cost of the service or good received is $700. In this case cash is not king and the above statement is false. Looks like reciprocal barter is king and cash is the next best thing.
What's your opinion?
This is a popular saying in the barter industry but it may not necessarily be true, there are different methods of bartering.
1. Non-reciprocal barter is when a person joins a barter exchange and purchases and sells their products/services with a form of barter credits. Many times prices get inflated because with a barter exchange there is a membership fee involved and a percentage taken on transactions (which is paid in cash btw)
Non-reciprocal barter can be less work and a great way to move excess inventory. So if you would have been left holding the stock, the above statement would be true. It's better to move your goods and recieve barter credits so that you may purchase other goods or services for your business.
2. Reciprocal barter does take more effort because you must find someone willing to exchange for the items or services you have to offer. When you reciprocal barter for business purposes, the advantage is that your profit is taken off of your expenses.
For example if you trade $1000 worth of goods or services and your profit is 30%, the real cost of the service or good received is $700. In this case cash is not king and the above statement is false. Looks like reciprocal barter is king and cash is the next best thing.
What's your opinion?
posted by Blogger at 2:59 PM
2 Comments:
I belong to a barter exchange and one tip I would give is make sure your purchases are business related. It's easy to get carried away at first. Now if my accountant could figure out how to write off that hot tub. ;)
I don't have an answer if it's true or false but I do barter here and there with friends. I've never traded online before but I'm interested in trying it. The site looks cool.
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