Direct trades work when there is the “incidence of coincidence”; a coincidence of wants, where each company wants what the other company has to offer, in the exact same value, at the exact same time. This is often difficult to achieve and makes direct barter a challenge.
Many companies today participate in a more sophisticated organized barter as members of a trade exchange such as Southern Barter Club. A trade exchange facilitates round robin trading with a number of trading partners involved which eliminates the need for a coincidence of wants and allows many companies to receive the products or services they need without spending cash. Trade exchanges have a debit and credit system using a cashless community currency. This eliminates many of the problems created by direct trades since the buyer only ever receives trade dollars for payment, not the particular goods or services of the seller. Companies in a barter exchange can buy from and sell to any other member of the exchange using trade dollars, just like they are using cash. Trade is simply another way of being paid.
Trade transactions are easily tracked and managed online by the trade exchange. ‘Barter exchanges manage trade similar to the way a bank manages money. This means that when you barter, each transaction is accurately recorded,tracked and archived. 1099’s are send out for all barter income. Members can view current transactions online the day a transaction is credited or debited and monthly statements can be viewed online as well.
Direct trading may seem like a good idea to some business owners, but there are risks associated with direct trading. One valid concern is, if the person they are trading with goes out of business or does not fulfill their end of the bargain, they are not protected. Often if a direct trade is done off the books, there is not a way to confirm the transaction.
When a business joins and trades within a trade exchange, they are safeguarding their invested products and services. Another benefit of a trade exchange is that it comprised of a wide variety of businesses providing expanded spending opportunities. A business owner can purchase from any other member in the exchange to get business or personal products and services for their business, employees, family or friends.
Top reasons to participate in an organized trade exchange vs direct trading on your own.
Southern Barter Club makes bartering easy and efficient.