The Basics of Business Barter Groups

kathryn by Kathryn Hawkins on June 29, 2011
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Do you need someone to build a website for your salon? You could pay thousands of dollars to hire a developer — or, if you want to pay in trade instead, you may be able to get one at no cost in exchange for a year’s worth of haircuts and coloring.

Though most people have taken part in some form of bartering on a personal level (say, an evening of babysitting in exchange for a lawn mowing), business owners across the country are taking the act of free exchange to the next level by creating formal barter groups. Bartering for goods and services can cut expenses, increase profits, and help keep business within your local community. Want to get involved? Here’s how to get started.

Check out NATE’s list of trade exchanges. The National Association of Trade Exchanges offers a directory of local business barter groups, so check for a regional chapter there first. If you find a trade exchange in your area, take a look at the list of members to make sure there are services you’d be interested in using. Many of these groups have membership fees as well as monthly maintenance fees plus 10 to 12 percent commissions on each barter transaction. It’s not uncommon to pay hundreds of dollars in annual fees, so make sure that you’ll get good use out of the group before committing to join.

Look at other alternatives. Some services, including the cities involved in Hourworld, are free and open to individuals as well as businesses. If you offer services that can be used from anywhere in the world, such as writing or design, you may want to join a non-region-specific group such as ITEX, but keep in mind that you won’t find local services like landscaping or childcare there to barter for.

Offer your services for trade credits. Once you’ve joined a barter exchange, you’ll generally be required to provide your service or product free of charge to another group member, for which you’ll receive an equivalent amount of trade credits (though certain organizations may give you a few free credits just for joining). When you have enough available credits, look through the membership directory to find out what services are within your “price” range and would be useful to you or your business. Unfortunately, the transaction probably won’t be completely free: The trade exchange will likely take a commission on the trade’s value, and you may also be required to pay sales tax on the product or service received. Even so, the price will likely be dramatically lower than you’d pay on the open market.

Have you joined a business barter group? What was the experience like?

kathryn

Kathryn Hawkins is a business writer for Intuit and is passionate about solving small business problems.

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