What is Bartering and what is it used for? Definition, meaning and examples

Bartering

In the business world it is known as Bartering. But what is it and what is it for? And how can you use it in order to take your business to the next level? Here you will find the answer.

Have you ever heard the word “barter”? A word known to all, it refers to the action of giving one benefit in exchange for another. It has been used since ancient times, and in the modern era it has become a powerful marketing strategy in order to achieve a mutual benefit.

What is Bartering?

Bartering is usually translated as “Bartering”, only with a slightly broader meaning. It refers to the action of performing an exchange of goods, services or advertising services online, without requiring the use of money. Unlike E-commerce, Bartering has evolved into a new method in order to renew your business and become more efficient and mutually beneficial.

It is basically, paying for a product or service with another product or service. Used by many organizations to obtain a mutual benefit. It is the ideal recipe for lowering costs, since you finance what you offer without a financial transaction.

Since cash becomes scarce at certain times, this is a good defense mechanism in the face of crisis. In addition, it makes possible the contact and relationship of small or medium-sized companies with larger companies.

On the other hand, everywhere there are those customers who are slow to pay what they owe, hence this is a good alternative for the late payers.

Since this activity is regulated by law, you should keep in mind that, although there is no monetary transaction involved, it is necessary to keep an accounting or inventory of the exchanges made. This is because all transactions must be declared before the governmental entities.

Bartering makes use of different information and communications technologies, social networks, etc., in order to link one company to another. It is a powerful tool of the Internet, used by many, although sometimes they don’t even realize it. But what kind of Bartering can help you?

What types of Bartering are there?

Before performing an operation of this kind you should know what kind of Bartering can serve you and what will be the objective. Because just as you can raise the level of your company, you can also cause damage that you will have to repair later on.

Bartering Direct

For many people, Direct Barting is the right one, as it allows you to reach an agreement to exchange services, goods or products with only one company. However, although you manage to focus on a transaction, this type of operation is limited to depend on the other party and whether or not you show interest in doing it. If you fail to show the feasibility of the transaction, bye-bye business!

Bartering Indirect

In contrast to the aforementioned, Indirect Barting is the most suitable, due to its functionality and adaptability. In it, more than two parties are involved to perform the exchange, opening a wealth of possibilities, plus you can integrate other partners to perform the operation.

You have a world of opportunities before you. So, try to make yourself visible and think about who can help you communicate your message in the right way, one hand doesn’t hurt anyone.

Also, imagine how your product and/or service can meet your customer’s needs and what you expect to receive in return. The goal: meet your business needs.

Now, see what benefits you can get if you do Bartering.

What advantages can you get by using Bartering in your business?

As a tool, Bartering allows you to finance resources in order to acquire others. Useful if you have a small or medium-sized business, so that you can get better liquidity, open new markets and get new customers. But what other benefits can you have if you take advantage of this method?

You will increase sales

One way or another you will make a profit. You can offer a product or service to complement the initial Bartering, or once your customers have tried your services and the quality of your services, establish a relationship that is future-proof.

You will be able to renew your inventory

As you will offer products to your customers or associates you will be able to give them what they are interested in, and at the same time eliminate a stock that may have been stored for a long time. You gain space by bartering.

Your capital remains intact

Because you will be offering one product or service in exchange for another, you won’t need to touch your capital; which can help you use it in other ways. You conserve liquidity and will fund operational expenses.

You will have new customers

Perform a business transaction, which will allow you to have an ongoing relationship with the customer in question.

There is no doubt that Bartering can help you revamp your business, improve your operational mode, and take your business or company to rise.

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