As small business owners, you are looking for ways to keep your business going and thriving in the current state of the world. You’ve probably considered every option except for one that seems a little “unconventional.” That would be a modern commercial barter exchange.
Maybe there has been hesitation because you have “heard some things” about barter exchanges and modern barter. Let us help you dispel some of your fears by talking about the four most common myths or misconceptions about the modern barter exchange.
1.) Barter is similar to Bitcoin and Other Cryptocurrencies
Don’t be fooled by Mastercard announcing it will accept some cryptocurrencies and Elon Musks’ purchase of $1.5 billion in bitcoin. Bitcoin and other cryptocurrencies are not safe or reliable currency.
Just as a reminder, one of Bitcoin’s most important characteristics is that no single institution controls the bitcoin network. It’s maintained by a group of volunteer coders and run by an open network of dedicated computers around the world. If that doesn’t scare you, it should. Essentially it’s the wild west when it comes to your digital money invested in cryptocurrency.
If you want to read more about who barter is NOT like bitcoin, click here.
2.) Modern barter exchanges have no regulations and sales are tax-free.
Modern commercial barter is held accountable by the International Reciprocal Trade Association (IRTA). IRTA promotes proper accountability rules, equitable standards, ethics, and governmental relations, for the organized barter industry and its participating members. IRTA takes a major industry advocacy position to preserve, protect and enhance the barter industry. This means IMS adheres to the IRTA best practices when it comes to working with commercial businesses in the barter world.
IMS is also responsible for reporting barter sales to the IRS. The IRS views barter sales the same as cash sales, which means IMS acts as the mechanism that accounts for your IMS purchases and sales and provides detailed statements of your accounts for year-end tax preparation.
Also, when you work with IMS, you are immediately assigned a sales representative whose sole purpose is to help you conserve your capital cash buy trading for your needs within the IMS network. These extensions of your sales staff are the intermediaries to make sure everything is fair, equal and legal when working within the barter arena.
3.) Barter is Outdated
The basic principle of bartering is seemingly outdated - I’ll trade you this for that. But it has involved into something more powerful and helpful over the centuries. In a recent BBC article, Ron Whitney, President of IRTA “estimates there has been a 20% increase in member sign-ups to barter exchanges during the pandemic. ‘Barter exchanges are seeing more activity and gaining more interest than ever before because cash is tight, credit is tight,’ he says.”
But it’s not just small businesses looking for ways to save cash and keep their services affordable for clients. According to the Wall Street Journal, traditional retail chains like Macy’s Inc., Gap Inc., and Neiman Marcus Group Inc. are looking into buy now, pay later options. However, if they were to invest their efforts into a barter exchange, such as IMS, they wouldn’t have to worry about their customers not being able to pay later or fulfill their payment plan options. Additionally, customers wouldn’t have to worry about increasing credit card debit with a modern, commercial barter exchange.
4.) Modern Barter is too Complicated
When you hear the word ‘barter’ or ‘trade’ it’s sometimes hard to think past the basic conceptions of those words and translate them into modern commercial purposes. In that same BBC article, Whitney explains the concept clearly:
“Members can exchange their professional services for barter credit, which they can then use to ‘buy’ the services of another member. Most times it is not a one-on-one trade. For instance, a landscaper would do a $5,000 landscaping job for a local dentist’s office. That does not mean he has to trade his labor for $5,000 of dental work; rather, he has an account at a barter exchange ["think of it almost as a credit card account”, says Whitney], which is credited 5,000 trade dollars and he can spend that amount on any of the hundreds or thousands of members in that exchange.”
If this is something you believe could help your small business, contact us today! Otherwise, if you would like to read more about barter, check out our Editor’s Choice archive!