BENEFITS
OF
BARTER |
1. It is cost-effective; it preserves cash.
2. If you belong to a barter network, other members learn about you and your business.
3. Inventory is not wasted; it is recycled.
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BARTER
AND
TAXES |
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Barter must be reported on your annual tax forms. Barter income is taxable and is treated the same as cash income. Consult an accountant before you barter; laws and reporting practices vary by state depending on the "dollar" amount exchanged.
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Are you in need of used equipment for your craft business? Or do you need new photographs of your work for an upcoming show? Barter, the exchange of property or services in place of cash, could be the answer.
The International Reciprocal Trade Association (IRTA) estimates that barter represents more than 40 percent of the world's economy. There are endless possibilities for what can be exchanged. Different types of barter exist, including:
- One-on-one: A barter transaction involving only two people, each of whom receives and delivers property and/or services;
- Barter systems: Brokers and clearinghouses make exchanges among members in return for a percentage of the transaction. These include companies which offer a wide range of products and services.
- Corporate barter: A barter between corporations where unused materials are traded between companies.
- Material and surplus exchanges: Products ranging from office equipment to rice are available for reciprocal trade.
- LETSystems (Local Employment and Trading Systems): Local systems are created, and for a registration fee, members can either exchange with each other within groups such as "craftspeople" or "child care" on their own terms, trade in dollar equivalents or exchange by accrued "credits" between the groups.
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WHO'S
BARTERING? |
The following are examples of how some craftspeople have used barter in their businesses:
- Tatia Johnson, who makes lampworked beads, exchanges her work for items such as hats, bath salts and table drapes for her booth.
- Aaron Usher, photographer, belongs to the barter club BarterMax (a club where you accumulate credits, which you can then spend with anyone else in the group). He trades his services for trade dollars (credits) for products/services, such as family vacations with member hotel groups.
- One leather worker trades leather goods at trade shows in exchange for gift items.
- A metalsmith has created an informal bartering system, exchanging beer (as an incentive), for scrap materials from junk yards which he incorporates into his work.
Although none of the craftspeople mentioned above work barter into their annual budgets, some said that they save a few hundred dollars a year through barter.
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