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Would you rather trade what you have or take cash from your pocket to get what you want?

For most business people the answer is obvious. Assume that there are several items that you want for either business or personal reasons. The customary way is to make the purchase with cash, credit card or check.

As an example, assume, that you are spending $100 each week to buy food. Each week you reach into your pocket and take out $100 to pay for your week’s supply of food.

Let’s further assume that you are the owner of a lawn mowing service. Business is good but you are always looking for more. As you stop by the food store, the owner mentions that he really needs a lawn service because of the time demands of his business.

You suggest swapping $100 worth of food for the care of his lawns. It is the perfect solution for him. His food cost is less than $100 and he was going to have to pay for the lawn service anyway. You get your food that you were going to buy anyway but have taken no cash from your pocket. You accept the food, he gets lawn service and you have not spent the $100 budgeted on food.

This is what happens on a regular basis in the barter world and why it is such an important supplement to the dollar. Barter takes unsold goods and services or underutilized space and converts it into buying power. In doing this the dollar intended for the purchase of goods remains with the buyer to be used for items or services that are not available on trade.

There are times in every business that some item, billable time or space is not selling for cash. The most frequently option is to mark down or discount the product to make a sale.

The option to barter presents a new and profitable solution to make the sale and leave your cash in your pocket. By selling on trade, the item is sold at full price and the business has acquired the same dollar value in buying with trade dollars earned. As with the dollar, these trade dollars can be banked for future use. In using barter you frequently get a new customer, one that came to you only because you trade. His motivation is the same as yours – to leave cash in his pocket.

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