Bartering isn’t something only relegated to history.
Companies today still trade goods and services in lieu of payment. Unfortunately,
we’ve been programmed to associate money as the mechanism that makes this
exchange possible. However, money doesn’t need to be exchanged in order for a
bartering transaction to occur. So, why do companies still rely upon swapping
goods and services in today’s marketplace?
You only need to look at what’s happened since the global financial crisis of 2008 in order to appreciate why bartering has increased in popularity. Companies today must do more with less. Maximizing returns for every dollar spent and every hour worked has taken on greater emphasis. Success means companies must think outside the box and continually find innovative cost cutting strategies: Bartering is one such strategy.
I recently wrote about how companies can use bartering as a means of payment when selling to uncreditworthy customers. After writing that article, I received an email asking how and why bartering might still be used today. I explained that there are a myriad of bartering websites, networks, associations and clubs where companies exchange goods and services without exchanging any cash. It’s the ideal cost-cutting strategy for today’s enterprises.
Finding Bartering Partners
Craiglist has an entire bartering classifieds section devoted to businesses and individuals looking to exchange or trade goods and services. While Craiglist may not be the ideal location to find a trustworthy company to barter with, it is still a solid indication of just how popular bartering remains. In addition, you may just notice some companies you already know or currently deal with as they list bartering needs in your area.
If you are going to move forward with bartering, there are a couple of things you should be aware of. First, it’s essential that you work with someone you trust. This could include current customers, partners or companies within your local vicinity. In fact, it could very well be the company right next door.
Second, focus on offering fair market value for your bartering transaction. However, don’t offer your goods and services cost. Bartering success is entirely dependent upon having strong negotiation skills. You are still required to get the most for your exchange. Therefore, be fair, but be smart.
Remember, having strong sales negotiation skills is still critical to bartering success. You must be able to negotiate the best possible deal in your favor.
Third, pay attention to taxes. Yes, you are merely exchanging goods and services. However, just because there isn’t any money involved in the transaction, doesn’t mean taxes would need to be paid – under certain conditions. For instance, if a company were to exchange physical goods – goods they would otherwise sell to customers – then your company could get caught if it weren’t covering taxes on the transaction. After all, when an audit is performed on a company’s finances, these transactions will appear and taxes will need to be covered. Therefore, make sure you take this into consideration.
Fourth, if you join a bartering network or association, make sure it’s suited to your needs. It’s also important to be aware of any monthly subscriptions, fees and charges for the network’s services. A possible solution is to focus on bartering networks more local to your area. A lot of these transactions take place by simply being a member of your local chamber of commerce.
Again, times are difficult. Today’s companies must change the way they work. It’s no longer about being cheap but more about protecting profit. Use the bartering process when it makes sense to do so. You may just find a number of willing partners, ones who need to reduce expenditures just as much as you do.
If you are going to pursue bartering, then the following articles will help you in the fine art of deal making.
Improve Sales Training & Negotiation Skills with Role Playing
Vendor Negotiation: Top 5 Negotiation Strategies That Lower Costs
Sales Negotiation: Defend Price, Customer Scare Tactics & Managing Concessions
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