In a time-honored practice, I joined a barter exchange this fall. (Earned back my membership fee in 48 hours.) Bartering is a traditional way of exchanging goods and services. The barter exchanges make it better.
Through a barter exchange, you don't have to trade one-to-one. This means that if a plumber wants to barter for my bookkeeping services, I don't have to use his services. The exchange keeps track of debits and credits to accounts and I can take the barter credits I receive from the plumber, the entrepreneur, and the party clown and use them to barter for a vacation condo in Hawaii. (Don't I wish I had enough credits for the condo!) Bartering has been a really good experience. I have worked for people that would have muddled through on their own if the transaction had involved cash. Did I mention that I earned back my membership fee in less than 48 hours?
Cash is king right now. People are holding on to as much cash as they can, so barter opens a whole new clientele to me. A lot of times people are free with barter bucks. It's true that I can't live solely using barter, but I can defray some expenses. I'm hoping to find a barter landscaper who works on the west side of Phoenix, but until we get one on barter, I'll have to spend my barter-bucks on things like haircuts or business coaching. Both of which would be useful.
Lest anyone think that they can bypass taxes, the government gets their cut also, in the form of a 1099 at year's end. That means barter transactions are reportable income. Heaven knows - the government can't do without their cut of my work. That's actually the one way that informal barter is better than an exchange.
Do you belong to a barter exchange? Do you barter your products or services formally or informally? How has it worked for you?
Through a barter exchange, you don't have to trade one-to-one. This means that if a plumber wants to barter for my bookkeeping services, I don't have to use his services. The exchange keeps track of debits and credits to accounts and I can take the barter credits I receive from the plumber, the entrepreneur, and the party clown and use them to barter for a vacation condo in Hawaii. (Don't I wish I had enough credits for the condo!) Bartering has been a really good experience. I have worked for people that would have muddled through on their own if the transaction had involved cash. Did I mention that I earned back my membership fee in less than 48 hours?
Cash is king right now. People are holding on to as much cash as they can, so barter opens a whole new clientele to me. A lot of times people are free with barter bucks. It's true that I can't live solely using barter, but I can defray some expenses. I'm hoping to find a barter landscaper who works on the west side of Phoenix, but until we get one on barter, I'll have to spend my barter-bucks on things like haircuts or business coaching. Both of which would be useful.
Lest anyone think that they can bypass taxes, the government gets their cut also, in the form of a 1099 at year's end. That means barter transactions are reportable income. Heaven knows - the government can't do without their cut of my work. That's actually the one way that informal barter is better than an exchange.
Do you belong to a barter exchange? Do you barter your products or services formally or informally? How has it worked for you?
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2 comments:
Never thought of it as a barter-exchange exactly... but I do trade babysitting for piano lessons!
(Does that count?!)
:)
Well, it depends. If you want to pay taxes on the exchange, then definitely; if not, then it is mutually beneficial friendship and there's no need to mention it to the IRS - not to mention registering as a daycare and those costs. Sad that taxes and government have to be a consideration in sharing our talents.
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