Barter 101: Trading For Services

Chicken farmers know the drill: It’s easier — and more profitable — to trade eggs or hens as barter for other types of food than it is to sell them at market.

To that end, have you ever considered what you could trade? Have you thought about putting a price on what you do? And have you determined how often you should barter vs. hold out for cash? Put simply, everything is negotiable, but if you’re just starting down the road, these “Bartering 101” tips may help you barter better.

  • What can you barter? You can trade just about anything to anyone, if you offer what they want, and vice versa. I’ve successfully traded my advertising writing and blogging services for Search Engine Optimization advice, website design, advertising layouts, hotel stays, a fashion consultation, sports events tickets, even a Caribbean scuba diving experience. Bartering can go far beyond what you thought it might be.
  • How do you put a price on your services? Be creative. Start with your highest offer of what you think it’s worth based on an hourly or project rate. Then, if you want to barter harder, be prepared to negotiate back and forth to settle on a win/win for both parties.
  • How can you get some cash as part of your trade? Let’s say you have a service worth $500 to your prospective client, but the goods you want are worth only $400 to that client. In this case, you can then ask for the balance in cash. Again, expect to negotiate.
  • How often should you barter? I barter when it’s convenient for my clients because they can’t afford my services at a certain price. But I’m very selective about how often I do it. After all, you can’t pay your mortgage with a few dozen eggs from a chicken farmer. Not at my bank, anyway.

A Note About IRS Reporting: A word to the wise – in America, the gross amount of a barter exchange’s sales is considered taxable revenue by the Internal Revenue Service and should be reported via a 1099-B form. Keep careful records.

About Gil Zeimer

Gil Zeimer is the Creative Director of Zeimer's Advertising Shoppe. As a consultant with 25 years of advertising and blogging experience, he is a Mad Man who works with businesses large and small. Read his marketing musings at www.zeimer.com.
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2 comments
Phil
Phil

"I'm very selective about how often I do it [barter]." I am all for finding unique and creative ways to pay for things, but, with all the advantages it can bring to your business, it is still a dangerous game; especially in relationships. I look at it like dividing fractions - you have to have a common denominator. Cash is the ultimate common denominator - when you get into service trading, all of a sudden one person's hour becomes equated differently because each person defines their hour and an hour's worth of their time, differently. To you, you may charge your time out at $100/hr for a 5 hour service. The other person may charge $50/hr for a 20 hour service. The cash values are the same, but the capital exchange isn't. It seems easier to just leave it as cash and not get into the potential wrecking balls. Just food for thought.

Luke Robins
Luke Robins

agree, alternative currencies can be beneficial for your company. If you want an Alternative Currency, OmniaVX.com can help.

Hadas Stein
Hadas Stein

Hi Gil,This arrangement works wonders for several business types and as you mentioned it is accepted by the IRS.Are you interested in a tax and accounting services? This is the time to focus on year end tax planning and come up with creative ideas for savings.Best, Hadas

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