Barter Trade Exchange in Today's Business Operations
By Terry Lamb
In today's world, our economies are built around the acceptance of the almighty dollar, or pound, or euro for our everyday transactions. If you don't have currency, you are almost completely unable to complete a sale or transaction at a retailer today - that is unless your a member of a local barter network. Credit cards and other types of plastic currency have reduced the exchange of money, but have still placed the focus of business dealings on monetary units until now -- where barter is taking over for some businesses.
With that in mind, your position as a business owner may make you feel as if it would be helpful to conduct some business in the form of barter. Although barter trade exchange may seem to be an outdated idea, it can be an excellent alternative, particularly between businesses that can provide services that would be mutually beneficial for each business.
Minimizing the loss on your business's income can be achieved by using barter trade exchange agreements to acquire materials for use in your business operations. For example, if a print shop were to accept toner in payment for producing advertisements for an ink company, this would be a barter trade agreement. Another example would be a steel business being paid in heavy machinery vital to their trade, say a forklift truck or metal stamps, when they supplied another business with their products. Both groups at either end of the barter deal can reap advantages and profit from agreements of this kind.
On top of this, loop holes exist that can help your business avoid various tax issues by using barter trade exchange. These could be costly if you tacked them directly onto corporate earnings, but bartering can help that. In many countries, corporate earnings are taxed at an absurdly high rate, and bartering can give that company a break, especially if the bartered goods can be implemented into the business.
In addition, companies can utilize bartered goods and use a middle man as a third party in a transaction to turn the aforementioned bartered goods into currency in another market. For example, a car manufacturer may take payment from a company that operates in a transitional economy in the form of fresh produce. The auto maker can then seek out another company interested in this produce and sell it for currency, which will ultimately end up with the auto manufacturer.
An often overlooked resource is barter trade exchange. It may provide a company with access to goods and services it needs in lieu of cash payment. The company may have difficulty in determining the value of the exchange with other participating companies. However, the company retains its cash to use for other needs and meets its current needs.
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