|
 Let's
say you
own "Widgets of Topeka". Your cost to
produce a widget is $1. The widget retails for
$2. Since you regularly need vehicle repair, you
realize that you can save money if you could trade 200
widgets (that retail for $400) to the auto repair shop for
$400 worth of auto repair. If they agree, you have
saved $200 on your auto repair.
Unfortunately,
if your mechanic doesn't need 200 widgets, there is no
trade. This is where Tradebank can help!
Tradebank has built a network of businesses that regularly
trade their goods and services. Tradebank will help
you sell your 200 widgets at
$2 each and then credit your Tradebank account with $400
trade dollars. You can now take those $400 trade
dollars and purchase from any Tradebank client. Currently,
approximately 10,000 businesses are
members of Tradebank in North America.
This is a new customer that wouldn't likely buy your widgets
if you were not a member of Tradebank. The money you
have earned from this new
business allows you to buy products and services at your
cost of goods. In this case, $400 worth of auto repair
for $200. Tradebank is paid a small percentage of each
purchase you make in return for sending new business to
you. The end result is that you receive new business,
you purchase from others at YOUR cost of goods, and you
conserve cash |
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Q.
Is barter legal?
A. Yes. Under the "Tax Equity and
Financial Responsibility Act of 1982", the federal government
officially recognizes Trade Exchanges as third-party record
keepers-meaning they record barter transactions and report client
barter income to the IRS. This puts Trade Exchanges on equal
footing with banks, credit unions, securities brokers and others
as legitimate custodians in the eyes of the law.
Q. Are
there any tax advantages to barter?
A. There are no tax advantages or disadvantages to barter.
The tax code treats barter transactions identically to cash
transactions. Barter sales are considered taxable income in the
year they are credited. Barter purchases and related barter
expenses are considered tax deductible expenses.
Q. My cash flow is hurting. Can barter help?
A. Absolutely! By using barter you begin to conserve
cash by buying goods and services you currently use ON
TRADE! This keeps the cash in your pocket.
Q. Can I use trade dollars for personal items?
A. Yes, you are simply paying yourself from your
business. The next time you need tires for your car or pest
control for your home, rather than spend cash, use your trade
account. This is completely legal and once again, keeps the
cash in your pocket. |
Once a
dusty corner of the economy, barter is emerging as a hot
entrepreneurial niche and a valuable tool for cash-crunched
companies
.
Inc Magazine
The "most effective tool of the 2000's" for
businesses.
USA Today
“Americans
are discovering that whatever business they are in, whatever they
buy or sell, make or fix, there is a better way to get what they
need without spending cash.”
CBS Evening News,
"Eye on
America
”
“These
days barter talks and money walks.
If you have something to trade, join the booming barter
economy. With cash
tight and loans almost impossible to get, more and more companies
and businesses are turning to barter.”
NBC Nightly News
“Looking
for relief from the credit crunch?
To acquire the goods and services you need without
decimating your dwindling cash, a growing number (of businesses)
are turning to barter.”
INC.
Magazine
“How
Bartering Saves Cash. Here’s
the deal: You paint my office, I’ll print your brochures.
Thousands of businesses have made this sort of swap a
billion-dollar enterprise.”
Kiplinger’s
Personal Finance Magazine
“Bartering
makes it to the big league.”
Practical
Accountant Magazine
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