Bartering, the act of exchanging goods or services in lieu of monetary compensation, can be traced back to early times. For example, a villager might exchange a basket of eggs for a sack of grain. In today's modern world, bartering is still going strong, as evidenced by the numerous websites, clubs, and local groups geared toward trading.
Bartering Systems
There are different types of bartering systems. Simple bartering consists of trading items or services that are similarly equal in value. Another type of bartering format allows for the use of e-currency or coupons for trade items, while yet other websites may allow for the use of cash to make up a deficit for trades of unequal value.
Some bartering websites also offer the option to exchange money for goods or services, but this is considered selling. Income earned from bartering is taxable and must be included on Form 1040. Swaps of equal value ultimately cancel each other out, but any trade that has the recipient receiving a greater value must be noted.
Bartering websites vary as much as the methods for trading. Some charge a membership fee or “trade fee”, while other websites offer free services. One website may offer the client the ability to purchase “credits”, while another leaves the exchange of goods completely to the discretion of the traders. Read the fine print in the application process. Even free swapping sites may have hidden transfer fees.
Trade Items and Services
What types of items can be found on bartering websites? The answer may be surprising. Real estate, cars, car leases, boats, coffee pots, clothing, toys, jewelry, etc. That's not including the list of services one might find such as carpet cleaning, reupholstering, personal chef, personal trainer, illustrator, photographer, or music lessons just to name a few.
Listing items on a swap site can help eliminate clutter in a crowded home or business, and open up doors to obtaining items that may be more useful. It may even be possible to trade those unwanted items for a vacation package. The opportunities that bartering can provide are virtually endless.
Bartering Risks
Bartering, like other methods of financial transactions, can also be an avenue for fraud. When bartering online, try to use an established trading website that has its members register and complete a profile. Ask questions, read the faqs, check for reviews and testimonials, and research the site's policies on how problems are handled.
Websites with large membership can offer more opportunity, but may also create an overabundance of specific service offers, For instance, there will be more competition when faced with 50 accountants offering services, effectively creating more down time for the person providing the service. Similarly, a website with too few members may have a shortage of people needing a particular service or trading a needed item.
With the proper balance, bartering can prove to be very rewarding. Whether providing a service, swapping items, or looking for a unique find, bartering may be the answer.
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