How to Succeed With Bartering
The Merriam-Webster dictionary describes bartering as, “to trade by exchanging one commodity for another.” Yes, it is that simple. However, it is also that complicated. Trying to find what to barter in exchange for what you want isn’t always so easy. However, with some care and thought, you can find out what to barter and get what you want in exchange at no cost to you.
1. What you want to give up. Likely, you may already have in mind something that you want. Perhaps it is to have work done on your car. Maybe you need a filing cabinet. Or it might involve an antique rocker that you have your eye on, but aren’t sure if its owner would part with it in exchange for something else.
With an item in mind, you’ll want to determine its value. That is easy if you’re seeking a service with a known price, but not so easy with an item, particularly an antique, that you want to buy. Try to determine a value based on classified ads, eBay sales, a Craigslist ads and other quantifiable factors. Then, find an item of like value and use that to negotiate for the bartered item.
2. Set up a trade. If you have an item or service in mind that you want, then you already have a trading partner to approach. You just need to present the item you want to trade and hope that your partner agrees to a swap.
Sometimes a swap isn’t easy to arrange, especially if you don’t have an item that the other person needs or wants. The owner of the antique rocker may be willing to give it up, but she isn’t interested in your china set, your collection of dolls or even your grandmother’s gold wedding band. Ask her what she might consider in a trade and see if you own that item.
3. Use a bartering club. Bartering clubs and websites, and time banks are available as options to direct bartering. These arrangement are particularly good for people who want to barter services or goods. Google “bartering club” or “barter exchange” and your local group should pop up.
Some clubs are more complicated than others, requiring you to fill out a contract, pay a membership fee and submit a W-9 form. Yes, bartering is not tax free and if you belong to a bartering group, expect to pay taxes on your exchanges. Certainly, some people barter under the table, but you risk getting slapped with fines and penalties if the IRS finds out.
4. Make your offer. Ready to barter? Then make your offer. Explain to your bartering partner what you have and what you would like. Be specific on the details — If you can build and maintain websites, then explain what you would like in return. If it is legal services, then you need to come up with an hour versus hour or a job versus job case for your service.
Don’t expect most bartering transactions to be completed without at least some negotiating. Avoid being insulted if your bartering partner lowballs you — he may not understand the value of your item or he could be treating bartering more like a cash transaction. Get it in writing if you worry that something might be misunderstood. An email may suffice, but a signed contract has teeth.