Bartering is traditionally associated with market stalls and traders have conducted business this way for thousands of years. In modern day transactions, business owners are more accustomed to trading goods and services in exchange for credit or cash. Now bartering is making a comeback in business transactions, with businesses exchanging their own products or services for those of others. This type of transaction is referred to as a contra deal. The benefits of doing this are the potential to cut costs, increase profits, build business networks and reach a wider market. However, there are good reasons why businesses should be wary of bartering in certain situations.
Making a Loss
The main concern is making deals where your assets are a higher value than the assets being traded by the other company. It is important to be realistic about the value of what is offered. If there is an uneven balance, then one person always loses out. Others may try to make trades with you when their assets are of a lower value as this is obviously beneficial to them. Ask yourself how much use the product or service they are offering will truly be to your business.
Another type of transaction to be aware of are those where you are offering the goods or service of your business and the other company is only offering something that is of personal use to you, not your business. It is vital that the deal has benefits for your company or it is not a fair deal. This would actually be considered as a business loss and this is the reverse of what you should aim for when bartering.
Bartering between businesses is not always a negative experience, especially if you take precautions to avoid losing out in the transaction. One way to avoid these situations is to make use of professional contra deal services. This way, you have an experienced professional who can liaise between both parties. You can also find help and support for contra deals online from others who have prior experience of conducting business in this way.
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