Surviving In Today's Economy Using Trade And Barter (Part 1)
Let's start by explaining the difference between trade and barter.
Barter can be trade or trading; however the word trade can mean barter, cash, checks, credit cards or other forms of currency. If we look up the word barter; "To exchange goods or services against something else without the use of money". I'm sure you knew that. So how is money defined? "Anything that serves as a medium of exchange for goods or services". So anytime you use a medium of exchange you are not bartering; got it?
Bartering can be a great way of doing business; however it does have its limitations. In the true sense, bartering is better than cash; this is only when each party has what each other wants; which is rarely the case. That is why we will introduce to you how to properly use a Trade Exchange. Proper use of a Trade Exchange will help you use bartering to its fullest.
A Trade Exchange is an organization that can consist of several hundred local businesses, such as I.C.R.E. (The International Credit Reserve Exchange, Ltd.). I.C.R.E. is also referred to as a "Referral Service or a Business Cooperative". Trade Exchanges are often called Barter Exchanges. This is where the confusion comes in; most exchanges do not barter. The way an exchange works is more similar to the way a credit card company works. The members of a Trade Exchange are all given a trade account, like a bank account. When a member wishes to do business with another member it is not necessary for them to need what each other has; as in the case with barter.
I.C.R.E. allows the selling member to collect any variable cash, such as cost of goods sold, sales tax, or incremental labor in cash. The difference in the "fair market selling price" is taken in Credit Dollars (a currency or medium of exchange). The seller can use the Credit Dollars like cash, dollar for dollar, with any of the members of the Trade Exchange. In many cases these Credit Dollars can also be spent with nonmember businesses.
The benefit to the buyers is they are able to conserve cash needed to make purchases and pay back the borrowed Credit Dollars with the markup of their surplus time or products, usually at a later time and usually with business profit they wouldn't have received, had they not been a member of the exchange. The benefit to the seller is they receive business they would not normally get, they collect any variable cash cost (so trading doesn't hurt their cash flow), they expand their customer base (at no extra cost), and any of the Credit Dollars they spend free up cash that would have been used to make the purchase.
I.C.R.E. improves your barter ability, any time you need to barter to help close a sale and you don't need the barter, you can sell your surplus barter to a Trade Exchange Member for some cash and Credit Dollars rather than lose a sale or be forced to discount your profits! There are many other benefits to being a member of a quality Trade Exchange. Stay tuned!