Archive for July, 2013
Short on Cash? Try Bartering

In this cash-strapped economy, businesses should consider turning to a buying/selling system that is older than currency itself: bartering.

Barter is simply the exchange of goods or services for other goods or services. There’s no cash or credit involved. According toBarter News, barter activity through the 450 organized trade exchanges in the U.S. is growing 12% to 15% per year. This translates into millions of entrepreneurial business owners, multinational corporations, and even governments participating in bartering for goods and services such as media advertising, travel and entertainment, office products and equipment, printing and website development, remodeling and construction, healthcare services and more —without a single dollar being exchanged.

Bartering can improve cash flow, prevent debt and free up excess inventory (by moving goods in exchange for something you need in your business).

But before wheeling and dealing with bartering partners, there are steps to take to ensure a good bartering experience:

1. Exchange equal goods and services

  • Attach a monetary figure to your service/goods. What’s 10 hours of your consulting practice worth? If you charge $100/hour, seek out $1000 worth of services or product in your bartering arrangement. Remember it doesn’t necessarily have to add up to the penny.
  • Find a bartering partner. Sometimes these bartering opportunities will fall on your lap when you talk to your customer and find out that they may be in a tight cash squeeze, but do have valuable business skills or products to offer you for your product or services. Remember, most businesses won’t think of bartering unless you ask.
  • Put it in writing. As in any business deal, make sure that you have a contract outlining what is being exchanged and its cash value, to avoid misunderstandings later on.

2. Join a barter exchange

Seeking out the right bartering partners can be difficult and time consuming, particularly if you have niche products or services. Instead, you might want to consider a barter exchange group—a fee-based barter matchmaking service—to widen your potential bartering partners.

  • You can get more information about barter exchanges by visiting one of two non-profit organizations that promote bartering: theInternational Reciprocal Trade Association and the National Association of Trade Exchanges.
  • Understand how exchanges work. Barter exchanges work by “barter dollars” that are traded when one member barters with another member. Some exchanges offer a line of credit that can be used to “buy” items on the exchange. Low margin businesses may not want to join these exchanges since it does cost money (in fees, and/or commissions to the bartering network). One caveat about barter exchange groups: They are often for-profit, so make sure you get a referral from a business associate or contact the Better Business Bureau before you sign up.

3. Remember the tax implications.

  • Know the rules. The IRS tax website has specific rules for bartering. You must report the fair market value of the goods and services received in exchange for the goods and services provided in the year the exchange was made according to the IRS Web site.
  • Fill out the right forms. Barter arrangements should be reported on Form 1040, Schedule C, Profit or Loss from Business. This should be done even if the barter is done on an informal one-on-one basis or through a barter exchange company. Barter exchange companies are also required to issue a form (Form 1099-B, Proceeds from Broker and Barter Exchange Transactions) annually to clients, members and the IRS.
 
The Advantages and Disadvantages of the Barter System

Post Courtesy of APARIJITA SINHA

Money is something which is generally accepted as a medium of exchange. It is one of the most basic and significant inventions of mankind. Before money came into use, exchange took place through barter system, i.e., goods were exchanged for goods.

Barter means direct exchange of goods. In other words, barter refers to exchanging of goods without the use of money. For example, corn may be exchanged for cloth, house for horses, bananas for oranges and so on.

What are the advantages of Barter System?

i. It is a simple system devoid of the complex problems of the modern monetary system.

ii. There is no question of over or under-production (or of unemployment or over-hill employment) under the barter system since goods are produced just to meet the needs of the society.

iii. The problems of international trade, such as, foreign exchange crisis, adverse balance of payments, do not exist under barter system.

iv. There is no problem of concentration of economic power into the hands of a few rich persons under the barter system because there is no possibility of storing the commodities.

v. Personal and natural resources are ideally utilised to meet the needs of the society without involving any wastage.

vi. The barter system also reaps the benefits of division of labour because it represents a great step forward from a state of self- sufficiency hi which every man has to be a jack of all trades and master of none.

What are the difficulties of Barter System

Barter system involves various difficulties and inconveniences which are discussed below:

1. Double Coincidence of Wants:

Under barter system, a double coincidence of wants is required for exchange. In other words, the wants of the two persons who desire to exchange goods must coincide. For example, if person A wants to acquire shoes in exchange for wheat, then he must find another person who wants wheat for shoes.

Such a double coincidence of wants involves great difficulty and wastage of time in a modern society, it rarely occurs. In the absence of a double coincidence of wants, the individuals under barter system are compelled either to hold goods for long periods of time, or to make numerous intermediary exchange’ ii order to get finally the goods of their choice.

2. Absence of Common Measure of Value:

Even if it is possible to have the double coincidence of wants, the absence of a common measure of value creates great problem because a lot of time is wasted to strike a bargain. Since there is no common measure in terms of which the value of a commodity can be expressed, the problem arises how much wheat should be exchanged for how many pairs of shoes.

In fact, under the barter system, every good must be expressed in terms of every other good. If, for example, there are 1000 goods in the economy, then, in the absence of monetary unit, every good can be exchanged for the remaining 999 goods. What is true for one good will be true for all other 999 goods.

3. Lack of Divisibility:

Another difficulty of barter system relates to the fact that all goods cannot be divided and subdivided. In the absence of a common medium of exchange, a problem arises, when a big indivisible commodity is to be exchanged for a smaller commodity. For example, if the price of a horse is equal to 10 shirts, then a person having one shirt cannot exchange it for the horse because it is not possible to divide the horse in small pieces without destroying its utility.

4. The Problem of Storing Wealth:

Under a barter system, there is absence of a proper and convenient means of storing wealth or value, (a) As opposed to storing of generalized purchasing power (in the form of money) in a monetary economy, the individuals have to store specific purchasing power (in the form of horses, shoes, wheat etc.) under the barter system which may decrease in value in the due course of time due to physical deterioration or a change in tastes, (b) It is very expensive to store specific goods for a long time, (c) Again the wealth stored in the form of specific goods may create jealousy and enmity among the neighbors or relatives.

5. Difficulty of Deferred Payments:

The barter system does not provide a satisfactory unit in terms of which the contracts about the deferred (future) payments are to be written. In an exchange economy, many contracts relate to future activities and future payments. Under barter system, future payments are written in terms of specific goods. It creates many problems. Chandler has mentioned three such problems:

(a) It may create controversy regarding the quality of goods or services to be repaid in future,

(b) The two parties may be unable to agree on the specific good to be used for repayment.

(c) Both parties run the risk that the goods to be repaid may increase or decrease in value over the period of contract.

6. Problem of Transportation:

Another difficulty of barter system is that goods and services cannot be transported conveniently from one place to another. For example, it is not easy and without risk for an individual to take heaps of wheat or herd of cattle to a distant market to exchange them for other goods. With the use of money, the inconveniences or risks of transportation are removed.

 
Great Product Purchase Opportunity: “Vampt”

Vampt is an agave based (Tequila) flavored malt beverage in citrus and nectarine flavors with 8% alcohol by volume distributed in about 9 US states. For more info, please contact Lauren Shepard: lshepard@virtualbarter.com

We had 24,000 cases, but currently have 17,000 cases of Vampt Beverages available for sale.

Current inventory is 10,000 cases of 16 oz cans in both flavors and 7,000 cases of 12 oz bottles in both flavors.

Minimum purchase is one semi or container load (1400 to 1600 cases). Wholesale pricing is about $28/case.

We will entertain all serious offers. Commission can be paid upon a cash sale to an introduced buyer.

Product details, specifications and packing info available on request.

Following are links to several videos and product information.

http://www.bevindustry.com/articles/84912-vampt

http://writearm.ca/wp-content/uploads/2011/11/Vampt-Review-JUNE-2011-email-copy.pdf

Smooth Talker – The ripe sweetness of nectarines with just a hint of citrus to compliment the flavour of tequila.

Midnight Warrior – A balanced blend of the sharpness of tequila with the tangy sweetness of tangerines’ and grapefruit with a hint of lime.

Vampt – Product Information Sheet

Vampt – Smooth Talker 4/6pk 12oz BOTTLES
Package Configuration: Twenty Four 12oz Bottles 4/6pk per Case
Alcohol by volume: 8%
Contains: Agave and Nectarine
Case Weight: 31 lbs
Case Dimensions: 15.75″ (L) x 11.75″ (W) x 9.5″ (H)
Item #: 57400-205-5
Bottle UPC: 8 57400 00205 5
6-Pack Carrier: 8 57400 00206 2
Tray UPC: 8 57400 00207 9
Pallet Type: Standard Wood Grocery Pallet 40″x48″
Pallet Configuration: 10 cases per layer, 7 layers per pallet, 70 cases per pallet
Loaded Pallet Dimensions: 48” (l) x 40” (w) x 62” (h)
Loaded Pallet Weight: 2210 pounds
Full OTR Truckload Configuration: 20 pallets per truck, 1400 cases per truck, 44,200 pounds

Vampt – Midnight Warrior 4/6pk 12oz BOTTLES
Package Configuration: Twenty Four 12oz Bottles 4/6pk per Case
Alcohol by volume: 8%
Contains: Agave and Citrus
Case Weight: 31 lbs
Case Dimensions: 15.75″ (L) x 11.75″ (W) x 9.5″ (H)
Item #: 57400-208-6
Bottle UPC: 8 57400 00208 6
6-Pack Carrier: 8 57400 00209 3
Mother Carton UPC: 8 57400 00210 9
Pallet Type: Standard Wood Grocery Pallet 40″x48″
Pallet Configuration: 10 cases per layer, 7 layers per pallet, 70 cases per pallet
Loaded Pallet Dimensions: 48” (l) x 40” (w) x 62” (h)
Loaded Pallet Weight: 2210 pounds
Full OTR Truckload Configuration: 20 pallets per truck, 1400 cases per truck, 44,200 pounds

Vampt – Smooth Talker 24/16oz LOOSE CANS
Package Configuration: Twenty Four 16oz cans per tray with shrink wrap over tray
Alcohol by volume: 8%
Contains: Agave and Nectarine
Case Weight: 27.3 pounds
Case Dimensions: 16″ (L) x 11″ (W) x 6.5″ (H)
Item #: 57400-211-6
Can UPC: 8 57400 00211 6
Tray UPC: 8 57400 00212 3
Pallet Type: Standard Wood Grocery Pallet 40″x48″
Pallet Configuration: 10 cases per layer, 8 layers per pallet, 80 cases per pallet
Loaded Pallet Dimensions: 48” (l) x 40” (w) x 58” (h)
Loaded Pallet Weight: 2224 pounds
Full OTR Truckload Configuration: 20 pallets per truck, 1600 cases per truck, 44,480 pounds

Vampt – Midnight Warrior 24/16oz LOOSE CANS
Package Configuration: Twenty Four 16oz cans per tray with shrink wrap over tray
Alcohol by volume: 8%
Contains: Agave and Citrus
Case Weight: 27.3 pounds
Case Dimensions: 16″ (L) x 11″ (W) x 6.5″ (H)
Item #: 57400-213-0
Can UPC: 8 57400 00213 0
Tray UPC: 8 57400 00214 7
Pallet Type: Standard Wood Grocery Pallet 40″x48″
Pallet Configuration: 10 cases per layer, 8 layers per pallet, 80 cases per pallet
Loaded Pallet Dimensions: 48” (l) x 40” (w) x 58” (h)
Loaded Pallet Weight: 2224 pounds
Full OTR Truckload Configuration: 20 pallets per truck, 1600 cases per truck, 44,480 pounds