Frequently Asked Questions About Barter
What are the advantages of trading?
Trade produces new business and allows you to expand your market. At the same time, trade conserves your cash. Instead of spending cash to purchase needed goods and services, you can trade your own goods and services. Therefore, cash stays in your business for other purposes. Finally, trade lets you put idle resources to work. Excess time, excess inventory and excess capacity are converted into needed goods or services.
How does barter work?
Members of the BarterPX Group use trade credits instead of cash to do business together. If a member trades $1,000 of goods and services to another trade member, that member will receive $1,000 in trade credit, which you use to purchase a variety of goods and services from other members of the BarterPX Group.
Hotel rooms, resorts, restaurants, advertising, printing and many other goods and services you acquire with trade credits. BarterPX is a third party record keeper that sends monthly statements to each member reflecting their purchases, sales and current balance.
What other companies are involved in barter?
Nationally, there are over 300,000 businesses, most of them small, currently involved in commercial barter. Based on present trends, 1.2 million businesses will be engaged in barter in North America within a decade. It is estimated that 75% of the Fortune 500 Companies engage in barter in some form or another
Why is BarterPX Network unique?
The BarterPX Network represents over 10 years of combined experience serving trade clients. Our knowledgeable staff makes us the organization with which to trust your trade management, trade brokering and trade accounting needs now and throughout the coming years.
What does it cost to join BarterPX group?
The initiation fee is $495. The monthly statements, membership fee, website access and update charges are $10 cash plus $10 trade. We often have special pricing in certain geographic areas to encourage membership growth.
How does BarterPX stay in business?
BarterPX collects a small fee on each transaction, typically 6% when you buy or sell. The fees are necessary to maintain and upgrade the web site, pay employees, cover operational cost and of course make a profit like every business.
Why a commission?
The fee represents a broker commission. Remember - trade business is usually new business. Most businesses are happy to pay a commission for those bringing them new customers. Historically 95% of barter business comes brand new clients making six percent a real bargain.
I already trade on my own; why should I join?
It is very rare when we find a business owner who has not engaged in some barter on his own. The problem with one-to-one trading is each business must want or need what the other business has to offer in equal dollar amounts. Fortunately, at BarterPX, everyone can trade with any other member of the exchange.
The BarterPX Network is a Better Solution
What if I cannot find the things I need the most?
This is actually music to our ears. New businesses are always sought to join the Network on the basis of their ability to provide goods and services needed by the current membership. in fact we have a system to speedily find you a vendor. Simply call customer service, let them know the items you seek. If you can suggest a few vendors you like that always helps as well. We send a representative right out to enroll a member to fulfill your needs.
How can I spend my trade dollars?
Make a list of your needs. List everything you normally spend cash on. Do not limit yourself to one or two time item purchases. Use your checkbook as a memory tool. Also, think of your personal needs. If you regularly take cash out of the business for personal living expenses, travel or home improvements you should consider using the trade dollars you have accumulated and save your cash for goods and services the barter network cannot easily acquire. We encourage members to give us a list of items on which they spend money regularly.
What if I earn more trade credit than I spend?
Members should only trade in proportion to their ability to spend. If one member sells goods or services in high demand, it may become necessary for them to limit their trade activity. Our experienced management team and software monitors all trade transactions, thus ensuring a balance of credit and debit.
How will other members find out about me?
One of our jobs is to promote your business to other members. BarterPX can help promote your goods or services to other members via our directory, mailing lists, website access and direct contact.
Is it true trade items take more time to purchase than simply paying cash?
Yes, sometimes a business must show priority to its cash customers because of cash flow necessities. However, advance planning and communication with your trade broker for alternatives will make trading an effective and profitable experience.
I am looking for an expensive item. If I save my trade credit, can I get it through BarterPX?
Saving trade credit in order to purchase a specific high demand item may lead to frustration. However, if you let your broker or customer service know of your specific as well as your general needs. In many case we have barter financing available -Now what can beat that?
What if I need goods or services and I do not have enough credit to purchase it?
Trade credit lines can be set up for members just as a bank extends credit to its qualified customers. When joining BarterPX, you will be reviewed by our experienced team and assessed a credit line. Over time, your credit line may increase depending on your timely payment, trading balances and need for extra credit.
What other ways are there to use barter?
Many members use trade credit to pay employee bonuses. Some members pay their employees a portion of their salaries in trade credit. At your request, we will set up employee sub-accounts and will assist your employees in using their trade credits as advantageously as possible. Employees need not pay the brokerage fee. This fee can be prepaid when a member transfers credit to a sub-account.
It is also possible to pay some of your bills with trade credit. We can help your creditors spend their trade dollars effectively. Paying bills with trade credit is just one more creative way to use your trade credit.
BarterPX can even use trade credit to collect past due accounts. Often, a business that owes you is willing to pay on their account with goods or services. If their goods or services are acceptable to BarterPX, we will purchase them in the amount equal to your account. We will credit your Barter account for the amount of your Debtor's delivery. You can then use that credit to obtain goods and services.
What happens to trade credits if I quit the Exchange?
Of course it is no problem, although we will most likely miss you. Any member who quits the Exchange is given three months to spend their trade dollars. Extensions are usually granted for members with large balances.
Are there tax advantages to Trading?
Trade income is the same as cash income for tax purposes. There are no inherent tax advantages. Trading should be considered a marketing tool, not a tax tool. As with cash income, trade purchases that are business related are tax deductible.
How do I know how much trade income to include on my tax return?At the end of the year federal law requires BarterPX to total your trade sales and submit this information to the IRS on form 1099B. BarterPX also sends you a copy of this form for your records, sixty days prior to our filing date.
Who decides what price the seller will charge?
Members of BarterPX Group are expected to trade their goods and services made available for barter at the same price they would sell them for cash. Violations of this may lead to expulsion of that member.
What do you do when a member’s prices are higher than those of competitors? Is it better to buy something with trade credits at a higher price or to pay cash at a discount price?
First it is against BarterPX rules to sell products via our network for more than you charge for cash purchases. If however, you find an item cheaper elsewhere, you have to consider how much you actually have invested for your trade credits. If your merchandise costs you fifty cents on the dollar, $10,000 worth of trade credit actually costs you $5,000. If you are a service related business, your trade credit may only cost you idle time.
Always remember that you are using your goods and services when making purchases with trade credit, not your cash. It will often be less expensive to pay a little more with trade credit than to get the same article at a little less price for cash. Seasoned traders are always aware of this difference and use it to their advantage. On the other hand, if someone overprices their products or services beyond a reasonable limit, do not do business with them. Instead, call our office for another referral or check the BarterPX website for another vendor.
May I exclude anything from my inventory?
Yes. You should only trade what you want to trade. The idea of trade is to move any inventory that gives you an advantageous profit.
Is it true that barter is only good for the acquisition of services and not products?
Barter is obviously best suited to high-margin situations in the marketplace. Margins are highest where businesses trade only their time or where there is an excess capacity such as undersold radio time, hotel space or idle equipment. However, barter can also be used to acquire goods at regular prices if margins are adequate.
Remember:Every new customer you service after you have met your fixed office expenses (payroll, rent, utilities, etc.) is very profitable. Providing your products and services for even a few new customers after basic expenses are met can make a big difference to your bottom line
Can my trade credit be spent with other trade organizations?
Absolutely! You may spend your trade credit with any trading member that belongs to our national trade network, Barter Center International (BCI), an international trade network with many barter groups. This gives you the ability to spend your trade credits with ten’s of thousands of other members worldwide. You may take cruises, go to Spain, buy an Euro-Rail pass, enjoy a hotel stay or just go eat at a restaurant in San Diego while on vacation with your trade credits. Arrangements must be made in advance through our office.
How do I get started?
If you are ready to start simply click to JOIN NOW. If you need further assistance, a member of our sales staff will talk or meet with you. They will discuss with you what you want to trade and how you will spend your trade credit. At that time, you will sign a contract and pay your initiation dues. A member of our staff will walk you through your first sale and continue to suggest ways for you to benefit as a member of BarterPX.