Many people know the benefits of barter: it saves cash on expenses and allows companies to acquire products and services at their own cost of goods. But people are also very aware of the many problems that can arise when participating in direct barter. Many of these can be solved by joining a business-to-business trade exchange and allowing them to be a facilitator between trading partners and handle accounting and reporting.

No need for a simultaneous coincidence of wants

When bartering directly between two individuals or companies, each party involved in the trade needs to have exactly what the other person wants, for the same value and at the same time. This can be difficult to achieve and requires finding a product or service that the other is wiling to accept for the trade. When a company is part of a B2B barter exchange this is no longer a requirement. After a member makes a sale, they can use the trade dollars received to purchase from any other member. Companies are free to buy from and sell to any other member of the exchange. And the trade dollars never expire.

Go beyond friends and close colleagues

When bartering on an individual level, barter agreements are usually created with familiar businesses or friends. It is difficult to create a barter deal with those you don’t already know, as it is difficult to ask to trade instead of paying cash for a product or service. With a trade exchange, barter agreements can go beyond your inner circle. A member of a trade exchange has access to thousands of companies in the area that are willing to trade and the exchange will introduce your business to those companies, expanding your market share.

Obtain new business

Unless a company is operating at 100% capacity, they should always be looking for new business. A trade exchange will bring a business new customers that they otherwise wouldn’t be able to acquire to fill their downtime or sell their slow moving inventory. This new customer will much more likely buy from a member of the trade exchange than spend cash with competitors because they would prefer to buy your product or service on trade.

Maintain price integrity

When companies aren’t able to sell their product, they will discount or liquidate the product, jeopardizing the product’s price integrity. A barter network will help sell these products at full retail, but with trade dollars instead of cash.

Tracking and Reporting

All barter transactions must be reported to the IRS on a Form 1099-B. A barter exchange will keep track of all barter transactions, provide monthly statements and will issue each member a Form 1099-B summarizing the value of all sales made through the exchange during the year.

Mediate transactions

With any sort of business transaction there are bound to be occasional complications. A barter exchange can help mediate any number of issues. They can make sure that agreements are reached and each party feels satisfied with the deal.

Handle billing

All billing goes through the trade exchange, so there is never any waiting for a client to pay. Another main function of a trade exchange is to monitor transactions and ensure that each member is charging the same in trade that they would in cash.

Personal broker for each company

The trade exchange constantly works for your business. A broker will work closely with a member to constantly assess other member needs and monitor the supply and demand of products and services to create multiple opportunities for new sales and ways to save cash on expenses.

Barter is a smart business tool for any company. It provides a way to save cash resources, fill spare capacity and downtime and create new partnerships. However, trying to find direct barter opportunities has difficulties. By using the services of an organized B2B barter exchange, like BizXchange, companies are able to use barter to grow their business more effectively and efficiently without the challenges of direct trade.