Posts Tagged ‘Barter’
Benefits of Barter
Written by BarterPro
Sunday, 11 November 2012 10:23
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Businesses large and small choose to barter in order to gain specific benefits

Retail Trade

  • New sales and customers
  • Increased buying power
  • Conservation of cash flow
  • Alternative financing
  • Enhanced quality of life

Corporate Barter

  • Convert slow moving inventory into current receivables
  • Put surplus production or capacity to use
  • Increase market share with low cash investment

International Countertrade

  • hard currency
  • balance of trade
  • new markets
  • manufacturing capabilities
  • prices of export goods
 
Real Estate
Written by BarterPro
Wednesday, 17 March 2010 21:50
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Real estate provides excellent opportunities to invest Trade Dollars that will generate cash profits. Real estate isn’t a particularly liquid asset, but real estate becomes more valuable over time and provides an excellent inflation hedge and tax shelter. Since Trade Dollars come from selling surplus or from additional new business and have a low incremental cash cost, many investors find that they can be more aggressive in pursuing investments such as real estate.

Because barter exchange members can earn Trade Dollars without significantly affecting cash flow, investors can buy speculative properties and wait for values to go up. In some cases, it’s even possible to walk away with a pocket full of cash.

Even if the investor is forced to sell at a paper loss, the sale can still represent a cash profit. Here’s how it works. Let’s say a business has an incremental cost of 35 percent in its Trade Dollars.

The business owner buys a piece of property for $100,000 trade, so the cash cost in the property is $35,000. If he sells it for $70,000 cash, he has still doubled his cash investment while reporting a $30,000 loss on his taxes. The IRS doesn’t care whether you pay for the property in cash or Trade Dollars. The reportable loss is still the same.

Investing Trade Dollars in improvements to a hard asset like real estate is another way to generate cash profits on Trade Dollars, since the investment enhances the cash value of the property. For example, a doctor has paid for replastering and painting of a house, had a new sidewalk put in, has renovated a garage, and made other improvements using Trade Dollars. Since the doctor’s cost of a Trade Dollar is only his time, the actual cost of the improvements is negligible.

Even when a contractor isn’t a member of a barter exchange, members are still able to finance improvements with trade. Vacations, vehicles and building materials can be bought with Trade Dollars, which can then be traded to contractors.

Where electricians, remodelers, plumbers or other contractors are barter exchange members, owners can easily upgrade the cash value their property. If the real estate is income producing property like rentals, the improvements can generate immediate cash through rent increases.

 
Turn Trade Dollars into Cash
Written by BarterPro
Saturday, 05 December 2009 19:33
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Virtually every trade exchange member regularly pays cash for something that could be bought on trade, which can then be resold for cash. If you can’t find it yourself, your trade broker should be happy to assist you.

For example, one of our clients is a magazine. One of its major expenses is color separations. We found another business that does separations and signed them up specifically for the magazine client.

The pre-press company does the separations and film on trade, and the magazine charges cash to its advertisers. With the help of a creative broker, the magazine now turns its Trade Dollars directly into cash.

The separations were an established part of the magazine’s fixed cost, so it was fairly simple to recognize the barter opportunity. Creative traders can also develop new product lines or new ways of doing business that turn Trade Dollars into cash dollars.

For example, a parking garage teamed up with an oil change and auto detailing company. Parking customers find it convenient to drop their cars off and not waste time on minor maintenance. The parking garage pays for the work in trade, then charges cash to its customers.

With the help of creative trading, the garage owner found a way to offer a new service and generate a new source of cash flow funded completely on barter.

There are numerous examples of how businesses can turn trade dollars earned from new sales to new customers into cash sales to customers that aren’t members of the barter exchange. A lawn maintenance company can use trade dollars to purchase plant material and sod on trade. An auto repair company can use trade dollars to buy auto parts on trade that can be sold for cash.

With just a little creative thinking, the possibilities of using barter to expand a business and improve the bottom line are endless.