First off I’d like to thank Tom Hood for sending me a copy of this book. It’s a good fast read. The 23 page self-published e-book was provided to me as a PDF document. Tom has 30 years of experience in the barter industry and wrote the book originally to help ramp up new barter exchange members. I have to say that I applaud his efforts in writing this book because I think the single weakest point in the professional barter industry is training new members. It wouldn’t surprise me if trade volume from existing members could be doubled over-night if they were only more thoroughly trained.
The book is a good basic resource and hit all the main areas of interest for new traders but also did have a few reminders the experienced barter fanatics will want to pay attention to:
- I like that he included a formal work-sheet to help people think both of what they have to trade and what they want to trade for. This is usually done seat-of-the-pants and sitting down and doing the work of going through the form can help pry out some new ideas.
- He spends some time on trading Due Bills (gift certificates). I think too often this kind of trading is only done by advanced traders. There is really nothing complicated about it. Beginning traders should remember that they can trade gift certificates. For example, this winter I bought a Christmas Tree from someone on CraigsList in exchange for a gift certificate to a local mini-golf center.
- I enjoyed his 10 rules for managing your barter balance. In the same way that people fail to plan their cash flow, they also fail to plan their barter credit flow.
- I personally was reminded that I need to purchase some Ad Specialty items on barter. It’s a great way to get your name out in public w/o spending any cash.
In the interest of full disclosure I would like to note that at the time of publication, the publisher of this book is not a paid advertiser, but the idea has been discussed. That possibility has not effected this review however it seems like something I should be up front about.
I haven’t caused any trouble recently so now seems like a good time to jump into the fray again! As you should all know I’m a big fan of barter exchanges and I actively recruit trading partners into my exchanges on a regular basis. That being said there are times when it is not to your advantage to do so.
The most common reason to trade directly with someone is simply that they are not a good candidate for an exchange. They may be skittish about barter in general and the baggage (explaining it, the commissions, etc.) that comes with exchanges just isn’t worth it. In those cases I just keep it simple and trade directly. If they want something that is available through my exchange I just buy it for them through the exchange.
A more controversial reason to keep a trader to yourself is that the deal is too good to share with your exchange. I’ve never run into a trade partner who didn’t have some kind of limit as to how much barter they wanted to do. If you work out an ongoing trade with a vendor for something really juicy I have found it advantageous to trade with that vendor to their full capacity directly. For example I trade with both a grocery store and a butcher shop. These relationships are pure gold in the barter industry. I will personally use the full capacity that both of these vendors want to trade so there is no way I want to open them up to trading with others. Even if I didn’t want to use my credit with them myself , I could probably spend gift certificates for these vendors pretty much just like cash.
Additionally I should mention that if you have a vendor that you think would be in high demand and you are on the fence about recruiting them into your exchange, proceed with caution. I personally had a issue where I recruited a vendor that I was pretty hot on into one of my exchanges. Once they were in, the exchange informed me that they were rationing services from the vendor. I was told that I could not necessarily buy as much as I wanted from this vendor even if it was under the vendor’s total barter capacity. Never mind the fact that the only reason anybody in the exchange had a shot at trading with them is because I recruited them in. I ended up sorting it all out but the experience definitely put a damper on my enthusiasm for recruiting for the exchange for a while.
As all of you fellow barter fanatics know, being taxed on barter transactions is unavoidable if you want to stay on the right side of the prison door. So with that in mind I think it’s worth while to mention that there is definitely a positive side to reporting all your trades: Including your trades in all your books makes your financial statements look better! In these times with great deals on loans, but so few people who qualify, keep in mind that every trade you make shows up on your P&L statement and makes you look that much more attractive to lenders. If you belong to a barter exchange you will definitely need to include your exchange account on your balance sheet as well. In the same way that inflated barter prices can hurt you on tax day, it can help you on the day you close your new lower home or business loan. Additionally if you are looking forward to a loan you need in the future, or you want to start working on selling your business, it’s never too late to start bartering to improve your financials.