Barter Price Gouging

One of the common complaints that I run into with unsuccessful barter exchange members is that other members  price gauge.  Honestly, it’s a complaint I make myself sometimes too.  I think there are a couple reasons why this problem can crop up.

1)  It’s not fair to compare the best possible cash price to the barter price.  In general it’s an unwritten rule that everyone charges their full retail price in barter.  I think it’s totally reasonable to charge MSRP for barter goods even if you NEVER sell at MSRP for cash.  All sales or discounts should also be ignored when selling a product/service for barter.  This is true both when you sell your product/service and when you buy a product/service on barter so that price increase should cancel itself out when you take into account your own barter prices. With this in mind, you shouldn’t try to compare the barter price to a sale price, a big-box-store price, a price on craig’s list or a price on ebay.  Make sense?  You are GOING to pay more on barter, but of course, you are still earning barter credits at your wholesale rate so you should still be well ahead of the game.  Plus this can help recruit new barter partners.  When I’m talking to someone who is new to barter I will almost always tell them I can “pay high retail” or  MSRP if it’s on trade.

2)  Some vendors really and truly do over-price their services on barter.  I had a plumber over a couple weeks ago to fix a leaking sink.  When it was all said and done he left with over $600 in barter credits for about an hour’s worth of work.  I was blown away.  The truth of the matter was that I didn’t have the cash to pay a plumber to do this work even at a reasonable rate and I didn’t have time to do it myself, so I was stuck and just didn’t have any choice this time.  That being said, you better believe that I will NEVER call this vendor again.  I will also tell anyone I know (both in the barter and cash world) that I would never use this vendor.  As a matter of fact, within a week of this happening, my neighbor called and asked me if I knew of a good plumber (for a cash job) and I told him NOT to use this vendor.  The lesson to me was to be especially careful with tradesmen on barter and to get an estimate if I can on the phone before they even come out to my house.  The other lesson is actually for this vendor:  If you rip someone off on barter, it will effect your business reputation in the cash world.

3) Some vendors seem to think that it’s OK to price gauge simply because they think their cash costs are higher than most.  Sorry.  I don’t buy that.  If there isn’t enough of a margin on a product/service to barter profitably at reasonable prices, then you shouldn’t barter that product/service.  Period.  Exactly the same rule applies to the cash world.

4)  I think one of the reasons that some vendor’s price gouge is simply that they can.  Some products/services are in high demand and they regularly get away with super-high rates.  If you are dealing with a devalued barter currency and can earn it really cheaply then I could see over-paying to get something in high demand.  Other than that… forget it.  Do your homework and keep walking if the price is too high.

Try not to take over-pricing personally.  Generally speaking, vendors with really high prices aren’t doing it just to you.  They are trying to hit everybody.  I don’t understand moral outrage at high prices.  If someone’s price is too high I just keep looking elsewhere.

For the haggling-challenged there are a few types of trades where you are pretty much guaranteed a reasonable price: Restaurants and retail stores.  On both of these types of traders you purchase from a printed menu or a pre-marked price and you should feel safe that you are paying the same as a cash customer.

Bottom line:  Don’t let the folks that over-price their goods/services ruin barter for you.  Barter is too great to let things like this get in your way.  Know the value of your barter credits and the value of what you want to trade for.  Take the good deals and reject the bad ones.  It’s that simple.

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