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How Barter Works and What to Do When it Doesn’t

How Barter Works and What to Do When it Doesn’t

Barter is the art of exchanging goods or services without the need of money to put a number value on the exchange. Where most people run into trouble is when they try to do an exact dollar amount exchange for what they want to trade. You can use the dollar amount as a guide but money works much differently than the world of bartering and it might not be the best measuring stick for you to use.

A perfect barter is where two people have an even exchange going. Each values each others service evenly. A great example could be a lawyer and a doctor. If they barter for time and only accept payment for out of pocket expenses like prescriptions or ordering/filing documents then they will probably feel even in exchange.

There is a problem that I see occurring between these two however. Doctors may not spend as much time, hour for hour, as the lawyer will spend and the lawyer might start to tally the hours in his head and feel out of exchange. The doctor then may have to point out how much time he spend analyzing x-rays and researching specific interactions of food and pharmaceuticals on behalf of the lawyer. If there is not an agreement before hand that caps, or puts an hour limit restraint per week on these two there could be problems.

How about two people with very dissimilar services? How would they decide how to barter? We are so used to deciding what is fair by counting hours or money that it can become quite tricky. Take the example of a marketer and a day spa. How might these two work it out? They could trade the marketer’s hours for spa services but unless the marketer is a spa junkie this doesn’t feel quite right. Now if the spa owner is smart and the marketer is worth every penny, the spa owner may entice the marketer by offering a year pass to the spa and all spa services plus a cut of all the business the marketer brings in.

Here there is no clear line for hours worked or spa appointments used. Here, the marketer has incentive to work and a goal set by the spa owner. Since the spa can only take in so many client s per month, the marketer automatically has the goal to keep them booked solid. In exchange the marketer gets all the relaxing spa days they can handle and a nice kickback for results they produce. This is a great example of each business owner valuing what the other brings to the table.

Barter is a tricky exchange and will not work for every business owner but if you are going to attempt it anyway, make sure there is a result based goal discussed and mutual respect between you and the person you are bartering with, and that you see eye to eye. Discussing the value of what you are offering compared to the value of what you are receiving is the best guide you can use for an even exchange.

Patty Farmer, “The Networking CEO” is a multi-award winning and highly sought after marketing professional, public speaker, radio show host and author. As the CEO of Patty Farmer & Associates, Inc. she has been the Recipient of 2011’s International Women’s Day Business Service Award as well as 2010’s “Best Business Connector in Dallas” award and a 2010 and 2011 “America’s Most Influential Business Connector” nominee. Patty has created a network of over 100,000+ connections while teaching thousands of business owners how to effectively network and market to grow their businesses using a non-competitive and dynamic collaboration strategy.

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  1. Tonia Boterf
    1945 days ago

    Important information to know to be safe legally is how the IRS looks at bartering as they have very specific guidelines on this. I think bartering is great but as you mentioned, Patty, doing wisely is key.

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