3 Reasons Why You Must Barter

One of the most overlooked methods of doing business is using the barter system. People assume that you have to pay money in exchange for the receipt of something of value. Not only is this not true, but it also makes good business sense to barter for the exchange of goods and services. Bartering is a great way to get and give something of value without spending a dime.

Just exactly does it mean to barter anyway?

Barter or trade is a powerful tool that represents a solution for companies with available inventory or services. By accepting payment in trade dollars instead of cash, a business maximizes its efficiency by increasing inventory turnover or billable hours. Using the trade dollars earned, the company can purchase the goods or services they want – without paying cash.

Due to the flexibility, the barter trade has grown in popularity. It has evolved into a more sophisticated business module when compared to ancient times. However, the concept is still the same. You exchange goods and or services with something that you want or need. Unlike in the past when such trade is done directly, modern times have embraced a commercial platform for businesses to negotiate and trade.

So what are the benefits of bartering to a business?

Generate new sales, new market penetration, and customers

New sales and new customers are important for a company’s’ survival. The mistake most companies do is they cut-down their advertising budget once the cash flow is tight. Businesses must constantly find ways to generate new customers and new sales and barter exchange, it helps you reach a larger client base.

How is that possible?

Members are looking for products and or services they need so that they can spend their trade dollars. Since they are already bartering, they know the benefits of barter and the leverage they have with their barter dollars. Hence, these are captive customers you can tap on because they would rather spend their barter dollars with barter members, instead of buying in cash from someone else.

Reduce lost money from idle inventories

Every time your employees spend their time not doing anything or whenever unsold stocks sit on your shelves means money is lost. When this happens, you are forced to reduce prices just so that your idle inventories can be moved because your stocks become obsolete products and lose their value over a period of time. However, through a barter trade exchange, you have the ability to sell your idle inventories at full retail price on trade hence at the same time fully utilizing idle time from employees.

Cash is king….so conserve it

Our economy is formed in such a way that it is important to have cash or liquidity. Most businesses do not realize that when they barter their goods and or services, it becomes their biggest asset. This is because how much cash a business has in the bank will not restrict their purchasing power. Purchasing is done through the potential to make new income rather than from your business sales history. Every business will experience a shortage of cash and it is something not to be ashamed of. However, when barter trade enables you to continue to exchange a valuable service or product that you need, a shortage of cash does not become an issue. Your ability to barter will be limited by your creativity. I have business owners that barter for supplies, hotel stays, a house, and even advertising that cost them next to nothing.

Barter is all about leverage!