1.the action or system of exchanging goods or services without using money.“it will be paid for by a mixture of barter and cash”
I’m kind of torn about whether to barter. Growing up I always thought that bartering was a good thing, and you were lucky to score a trade. Yet, lately I’ve been rethinking it.
My money-guru, Denise Duffield-Thomas, aka The Lucky Bitch, firmly believes that bartering is devalues yourself. She feels that regardless of how fair the trade that bartering always makes a bad bargain.
Now that we have our beach cabins, we’ve actually have something worth a trading. And so far, we have taken advantage of this asset:
- We’ve bartered with friends who run a side web hosting business, once for a stay at the cabins and another time for donating it the Alameda School Auction.
- After paying for my first coaching package, my friend/coach Lou Radja was willing to take his family to the beach in exchange some extra sessions.
- When legally forming an LLC, our lawyer Lori Beight was the one to propose bartering our cabins for her services. (She had visited once before with Rotary friends from an auction donation and knew that her husband “who is a real snob” really loved the cabins).
In each case we obviously entered into the trade with a win-win in mind. We’ve got a cabin that sits empty on some weekends and we have a need for services that friends offer.
Yet, I’ve been rethinking it lately, and feel like I need to set my own criteria for any future barters. It feels especially important since the whole point of a barter is that both parties get what they want without having to exchange money.
- We were already planning/needing to buy the service in the immediate future.
- We each make an itemized calculation of the value, and any discrepancy in either direction is paid at the time of agreement.
- We put it down in writing. It doesn’t have to be a legal document, probably just an email or maybe Google Docs.
- When either proposing a barter or being asked one, give the other person some time to think about whether it really works for them. We don’t want either party to say yes just to be nice.
- Set a timeline for the barter itself. When do you want the exchange to take place? Does it expire?
- Accept either an agreement or a polite decline with grace. Politely decline if the proposal doesn’t meet the above criteria.
- After the trade has happened, make sure to document it for tax purposes.
Reflecting about it, I realize that part of the challenge with bartering is that it happens with friends and family who also want to do business with you. So, you obviously want both relationships to be long term and mutually beneficial.
I don’t want to feel used, nor do I want to swindle anyone else. Hopefully, by using my own criteria, we’ll be able to continue to make friendly exchanges with good business practices in place. I think the key is to make sure no one is devalued in the process.
Have you bartered before?
How do you make sure it’s fair for both parties?