Over the years it has come to my attention there there are a couple things that us barter fanatics can do when we trade that will gain us a little “float” with our transactions and help with cash flow. Here’s my current list:
- If given the option when setting up your exchange account always opt to pay as much of your commissions as possible when you are making a purchase. That way you don’t have to pay commissions immediately when you make a sale. It may even be worth while to pay a slightly higher commission if you can pay it all on your purchases.
- Put your “commisionable” transactions through your exchange after the first of the month. Most exchanges bill on the first of each month. If you wait until after the first you won’t be billed the commission for an extra 30 days.
- Assuming you are paying part of your commissions on your “sell” transactions, then it doesn’t make any sense to build your account up to a high balance. Not only does this incur barter commissions, but you will also be taxed on this income that is sitting in your barter exchange account. It is more to your advantage to earn at roughly the same rate as you spend.
- Once you have proven to your exchange that you are a good member that can and will earn barter credits on an ongoing basis, they may extend you a line of credit. By using this line of credit you can purchase products and services without paying any “sell-side” commissions at all up front. You will of course need to earn those credits back eventually and the commissions will be due at that time. Also if your exchange is charging you interest on the line of credit that probably more than wipes out any cash flow advantages.