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Barter Your Way to Profits

Barter Your Way to Profits

Have you ever faced any of the following situations?

One: You need a lawyer but you don`t have the cash for the retainer.

Two: You have a warehouse full of inventory that just isn`t moving.

Three: Sales are down and you need more customers.

Each of the above problems might be alleviated by


1. What Is Bartering?

Bartering is simply exchanging goods or services

without money.

For example, you give your accountant and his family

a meal in your restaurant in exchange for the

preparation of your income tax return. This is a

barter transaction because no cash changes hands

between the two parties.

2. Bartering Improves Liquidity and Profits

A shortage of cash is not an unusual situation for

either businesses or individuals. Perhaps you would

like to advertise in a certain publication but just

don`t have the money. Have you considered exchanging

something of value that you have (a service or product)

for the advertising you need?

Such a barter deal is mutually advantageous. Neither

the party has to part with cash to obtain the desired goods

or services.

Not only does bartering conserve cash, but it can

generate sales and profits. Inventory turns

over more quickly. Service providers sell more of

their time than they would have if they insisted on cash.

3. Bartering Creates New Customers

Notice, also, that both parties just made a sale to

someone they wouldn`t normally have. You both just

received a new customer.

If happy, your new customer can refer you to many

more customers, including ones who pay cash. Perhaps

your original barter customer may also start paying

cash in future transactions with you.

4. Barter Exchanges

In addition to trading with individuals and

businesses, you might consider joining a barter


A barter exchange is a business that facilitates the

exchange of goods and services between its members.

There are membership fees for joining. Also, the

barter exchange charges a commission on transactions

made through it.

5. Tax Aspects of Bartering

Barter transactions made by your business must be

reported for income tax purposes. Also, sales taxes

may apply to such transactions.

For increased liquidity and new customers, consider

bartering your way to profits.

For more information about bartering, visit