well when  the  barter  discussion was  taking  place  (on a  smaller  scale) a few months  ago  I was  checking  into  how  the  exiting  exchanges  were  doing  it  and  what  it took.... and  yes    the  inner workings  and  possible legal  avenues of such a program  were much  more  than just making  a list  of businesses  who  wanted  to possibly  barter. 

But  as stated  above  what  it  stoping someone  from simply  approaching  another  and  asking if they were interested  in bartering  some  services.

More  than what  I  had  time  to  put  towards  such a  business.

But  then  you can  ask yourself  why  someone  doesn't  start a barter  program  that offers participation opportunities that will just include  a  list  of  potential businesses to barter  with.  

 I feel the  answer  is  because  everybody  is  alway  looking  to make the  extra  money and  they  don't  always  have  the  imagination to  develop  ways  in which they  can benefit from a  program,  outside  of  simply  charging people  for  there participation and getting  direct compensation in other possible  ways.   In order to charge people the  money that most want to make,  one  would  have  to offer  more  then  just the opportunity  to be on  a list.    other  services  would  have  to be offer,  at least  that  seems  to be the  case..

Michael  T

You are  absolutely correct, the  difference  is  that  those groups are marketing thenselves as a bartering organization.  

At the moment  SuN  is  not.  That is what makes it a million dollar  idea. 

SuN is  always looking  for ways to bring more  visitors to the web site and if they can create a program/environment that will offer a benefit that would entice business people to repeatedly visit SuN,  they will achieve such an objective.

Michael T

I have a personal assistant, errand and concierge service and I am in a nationwide barter group.  Its a nice way to be able to get things without having to pay cash for them.  But you have to have to be in a barter group that provides you with the services you need.  Bartering also doesn't pay the bills - mortgage, utilities, insurance, etc.  and you have to limit your barter otherwise you will be working for others and growing your barter dollars but if you don't have alot of needs then you can get top heavy.  I was the first of my particular are in the group.  I get used for mostly courier work of administrative work.  In my particular situation, printing and memberships are the most things that I use my barter dollars for.  There are many things that you can find cheaper than if you use barter too and you have to weigh whether its worth it or not.  I went to find promotional items and the one business in the group charged 25 cents more for keychains than other places that I found online and off.  They also would only barter the basic cost of the promotional items and not the set up fees, S&H and the markup.  It would have cost me 1/2 more to barter than to just pay the cash so you have to be alert to what your needs are and if they can be sustained by the barter group.  Get too top heavy and you have too much in your barter account and not enough available reasonable services to use the money for.

I did some research  and  I could only find one time when it would be advantageous to participate within a barter organization.  as a stratup and cash flow  is low.

My example, correct me if I have an incorrect image  of the  situation.

supposed I need  100,000$ in products and services.  most people within the barter program are charging more  than they do on the open market  as stated  by  EK.   I believe this is because everybody is afraid  that the rest that are participating are inflating their prices so they need to also.

EK  stated   "It would have cost me 1/2 more to barter than to just pay the cash"

I do not know  if this  includes the commision  that the barter group charges.    say  10%  more   or   the  aditional  taxes  you  have to  pay on the inflated  bartered  amount.  7% sales  tax  ( or  can you avoid  that????? I know  NY  wants  its  money. )   and the income taxe  obligation  on the additional inflated  price. lets  say  33%

Lets start with the need of  100,000$ in products and service

           $100,000

Plus     $50,000   inflated price

Plus      $3,500    Sales tax on inflated pricing structure

Plus      $16,500   Income taxes on inflated  pricing structure

Plus       $15,000  on the  total  amount  of  bartered  services  commisssion to barter 

                                          organization

In all fairness if you are participating within a barter program you are also charging the extra 50,000 so that would be a wash.

If you add the 3,500, 16,500, and  $15,000   your added  expenses  for participating within a bartering program is  $35,000  on 100,000  in needed  services.   An if I calculate correctly  that  is  35,000 out of poocket cash   expense.

the way I see it  if the people  bartering actually lowered their pricing   to  say 10%    the opposit would  take  place  making it a  benefit  toparticipate  within the program,   IE  saless tax  , income take  and  all other  expenses.

Now  If you are a strat up  without the  needed  cash  you  may have a  good situation  to  start with.

Please tell me  where  I  have  made my  miscalculation  at..  because  I  do not have the  experience  in these programs.

Michael  T

Yep it sure is considered income and expenses are deducted respectfully.  Every year I get a 1099 from the barter company stating what my sales were for the year. 

When I joined the fees for the barter network were $15/month administrative fee and $15 per trade fee.  Both were to be paid in cash oop by me.  This means that when I performed a service and submitted an invoice I would be charged $15 and even if I didn't have any transactions I would be paying a monthly fee.  When I use my barter dollars for services, I was not charged to spend the money ($15 per trade fee).  This was not cost effective for me and I told them I didn't think barter was for me, said hey, my kind of business is new and I am going to be paying more in fees than I am taking in and I just can't justify that.    I was not the only one evidently that expressed this concern and they said that they had come up with a few fee structures depending on circumstances.  So then they came up with a $5/month administrative fee and $5 per trade.  Better, but even at this I didnt' like the fact I was paying a fee each month when there was no activity and I was losing money OOP, money I couldn't afford.  The end deal I worked with them?  No monthly admin fee; 15% total trade fee - 10% would be deducted from my barter account and 5% would be paid in cash.  It works for me! 

I do not have many barter transactions now... But the main source of any transactions was a very popular local marketing/networking group.  (The founder of the group is a marketing person and of course makes cash from that but a lot of it is also done in barter i.e. membership, supplies he needs, etc. I was racking up the barter dollars and there wasn't really anything I could use other than printing....and still no cash coming in to pay the bills.  So I then worked out in addition to the above agreement that every other transaction with this marketing/networking group would be cash but then it seemed that the little jobs were in cash and the larger jobs were in barter.  Not helping my cash flow... so I ended up every other was transaction with them was paid in cash.  For jobs over a certain amount it would be half cash half barter if it was a barter transaction.  

This marketing/networking group believe it or not really pretty much did all their transactions on barter.  I don't know how he did it - he certainly didn't have an unending cash flow....

Oh and yes, barter is especially good for companies that are just starting out when the cash flow isn't there.  Its a way to get what you need without cash.  But then again I know of larger companies that get into the barter thing too.

I didn't inflate my fees - ha never thought of that. 

I