What is Barter?

Barter is the exchange of goods and services without the use of cash.  People can Barter on a one-to-one basis or they may choose to use the services of a Trade Exchange.

 

 What is a Trade Exchange?

A Trade Exchange is similar to a bank except that it uses Trade Dollars as a medium of exchange to help facilitate trading between it's Members.  In addition, it provides the accounting services and statements that help Members keep track of their balance and trading activity.

 

 Why join a Trade Exchange?

• A Trade Exchange eliminates the limitations of one-on-one Barter where each business must want what the other business has to offer.  When you belong to an exchange you are paid in trade dollars, which you can then spend with any other Member.  This way when you are the Seller you do not have to turn away any business because you don't want what the other person is offering.  Using Trade Dollars also helps when you want to make a Purchase and the other person doesn't want what you have to offer.

• A Trade Exchange will Save you the time and effort of having to find compatible Trading Partners.

• A Trade Exchange helps you market your products and services to other Members.

• An Exchange acts as a third party record keeper, providing monthly statements to clients, which reflect all trade purchases, sales and a current trade dollar balance.

• When you are a Member of a Trade Exchange you do not have accounts receivable to collect or bad debts to write off.  You are paid at the time you provide your product or service.

Who can barter?

Any business owner, professional or individual who has a product or service to offer on trade for which there exists some demand.  The higher the demand for your product or service the more opportunities you will have to trade for the products and services you want and need.

 

Who can benefit from barter?

Just about any business with excess capacity or surplus or slow moving inventory can benefit from bartering. This is especially true if your inventory is perishable like radio time, billboards, hotel rooms, airline tickets, empty tables at restaurants, event tickets or your time if you provide a service.  A key consideration is that Trade Dollars have a storable value and your perishable inventory doesn't.

 

Can I get everything on Barter?

No. There are some things that you probably won't be able to find on trade, including:  utilities, tips, mortgage payments and money payable to local, state and federal governments ( taxes, business licenses, traffic fines) etc.  Also items with thin margins are rarely available in a Trade Exchange.  you can however, use Barter to "Free Up" cash to pay for the things you can't trade for.
 

Why use trade Dollars instead of cash?

Maximizing cash flow is a top priority of all businesses, small and large.  Using trade dollars, as an alternative to spending cash, helps you conserve cash.

 

How can Barter increase my cash flow?

There are several ways in which barter can increase your cash flow:

• Business and Personal expenses can be converted from cash to trade transactions, thereby freeing up your cash.

• The New customers you get through your Trade Exchange are great sources of Referrals and word of mouth advertising to attract New Cash Business.

• You can use the Trade Dollars you earn to purchase all forms of media advertising to attract more Cash Business without the out-of-pocket cash costs.

What does it cost to Join a Barter Exchange?

The Oklahoma Trade Exchanges has an enrollment fee of $195.00 (waived as of 2/12/08).  There are no monthly or yearly fees at all.  We charge a 5% cash transaction fee on each buy and sell trade.

 

Are Trade Exchanges legal?

Yes. Under the "Tax Equity and Financial Responsibility Act of 1982", the federal government officially recognizes Trade Exchanges as third-party record keepers-meaning they record barter transactions and report client barter income to the IRS.  This puts Trade Exchanges on equal footing with banks, credit unions, securities brokers and others as legitimate custodians in the eyes of the law.

 

Are there any tax advantages to barter?

There are no tax advantages or disadvantages to barter.  The tax code treats barter transactions identically to cash transactions. Barter sales are considered taxable income in the year they are credited, barter purchases and related barter expenses are considered tax deductible expenses.

 

What percent of my business can be done in barter?

Many barter experts recommend that bartering be kept to no more than 10% - 15% of your total business.  But, there are too many variables that are unique to each business to make a blanket statement.  The best thing to do is evaluate your current business situation and decide how much you can safely trade without adversely affecting your cash flow.

 

Why do some products and services cost more on Barter than for cash?

Because the cash economy is so competitive you can always find someone who is willing sell their products and services at steep discounts or even at a loss.  In a Trade Exchange, Members sell their products and services at full retail value.  On the surface it would seem like you are better off paying cash, however this is only half the story.

Although on a retail for retail comparison the cash price may be lower on a particular item, you have to take into account the cost of your Trade Dollars which is the wholesale cost of your products and services.  Since you are effectively buying at your wholesale cost you may find you are actually better off paying for the item with Trade Dollars.

 

How should I price my Products and Services?

You should charge the same prices as you would for cash, but may exclude sale & discounted products & services.

 

What if I prefer to have a broker to help me with my trades?

If you prefer more personalized service you can have one of our Trade Brokers help you with your trades.

 

How can you prevent inflation?

While we will attempt to weed out Members who abuse the system, our best line of defense against inflation is you. Here are some things you can do:

• Do not proceed with the purchase.  Let us know immediately and we will contact the seller and try and rectify the situation.

• Look to see if there is another Member who is offering the same product or service.

• Ultimately you have the final say.  If you cannot get what you want at a fair price, don't buy it.  You can always use your Trade Dollars for something that has true value to you.

• Most importantly, don't compromise your integrity by raising your prices.  

Can I charge part cash?

Yes, however, the first $1,500.00 of a Trade must be 100% Trade Dollars. On the amount in excess of $1,500.00 the seller may charge cash or a cash / trade blend, which would be agreed upon by the parties involved.

Any seller may collect cash for tips, sales tax and shipping if applicable.

 

What if I have a problem with another Member?

If you have a problem with another Member please notify us by e-mail immediately.
Although we are not responsible for resolving disputes between Members we will, in most cases, try to rectify the situation.

 

What if a Member does not play by the Rules?

If a Member does not abide by the Terms & Conditions or Policies & Procedures their Membership is subject to suspension or termination.

 

Can Members sell used items on trade?

Yes. The item(s) should be specified as used, must be in good to excellent condition and priced at the fair market value.

 

How do I join the Oklahoma Trade Exchange?

It's easy!  Just click here to go to the membership sign up form.

 

More FAQ's can be found here:  All About Barter and here:  General Information