What Is A Barter Exchange and How Can It Increase Your Cash Flow?

pexels-photo-58902In the old days your doctor might come to your house to deliver your new baby; and for payment you might give him a few chickens and some produce from your garden. No money exchanged hands, but the doctor was given items he might otherwise have paid cash for.

Today, we’ve moved to a currency-based society. Rather than getting the items or services we need in trade for our efforts, we accept government issued currency. Government currency (aka money) represents a quantitative value we have assigned to the delivery of our labor or items we’ve sold. That currency can then be traded to someone else (who has agreed to accept money) for the things we need.

Money has become the norm in representing the value of what we buy and sell. We are so cash-driven in our society that we often do not think about the fact that it isn’t the money that is so important, but the things we can purchase with the money.

Cash Flow Relief

dollar-billsAnyone who has been in business for any time has noticed there are peaks and valleys with cash flow in most businesses. We’re always looking for new markets and new ways to expose people to the products and services we offer. We’re also looking for ways to stand out from our competition so that consumers pick us over them.

Competitive Advantage

Barter Exchanges are a great way to expand your audience and reach individuals and businesses you might not otherwise reach. For example, let’s say you are a chiropractor and there are 10 other chiropractors in your part of town. You need some way of standing out and being different. You also need a way to reach new clients.

You can stand out by offering unique specialties or exceptional service, but there is one other way you can differentiate yourself and reach new nests of clients.

chiropractor on tradeConsider Joining a Barter Exchange

A barter exchange is a group of people who have agreed to accept “Trade Dollars” as currency instead of government issued money.  As a chiropractor, you could offer your services on trade to the people who belong to the exchange and then receive “Trade Dollars” that could be used within the exchange to purchase other products and services.

For example, let’s say there are 800 individuals who belong to the local barter exchange in your city – all offering products and services of their own. You probably won’t need everything these people are offering, but that doesn’t matter. When those 800 people need a chiropractor and they see you’re the only chiropractor in their area who accepts Trade Dollars, they’re probably going to call you. You just gave yourself a competitive edge with 800 people.

Things That Can Be Traded

Let’s say there’s a printer, a hunting lodge, a women’s clothing shop, several restaurants and a transmission shop who belong to the exchange.

You could offer your chiropractic services on trade to everyone within the barter exchange. When they purchase your services, you earn “Trade Dollars” that are placed into your barter exchange account. Later as you need items you could

  • get some business cards from the printer,
  • book a weekend at the hunting lodge to entertain high end clients,
  • buy your wife a new wardrobe at the clothing shop,
  • take clients or colleagues out to eat at the restaurant,
  • get the transmission fixed on your car.

All of this could be done without strapping your cash flow.

This way you can save your cash for things like phone bills, internet services, credit card processing fees or other products and services that are not available on trade.

How It Works

The barter exchange acts sort of like a bank. They keep track of the Trade Dollars you earn and spend and provide necessary statements and IRS documentation so that everything is above board. They also provide a Web site, a business directory and a staff you can call when you’re looking for something on trade. This way, you can easily be directed to the best businesses to meet your needs on trade.

Each barter exchange may handle processing differently, but at Tradebank, you only pay a cash fee when you make a purchase.

It’s a small percentage of the purchase price. So you can earn all you want without incurring a fee. Not until you purchase something (which proves those Trade Dollars are really worth something to you) do you pay the transaction fee that helps the barter exchange stay in business.

If you’d like to learn more about how you can improve your cash flow by being a member of a barter exchange, contact Tradebank at 888-568-5680.

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