Modern Bartering, More than “This for That”

Emergence of online barter platforms like baggl has changed the face of this century-old model.

07:03 05 August 2021

 

COVID-19 happened, and it sent many companies out of business and forced them to let go of their employees. Some are still lucky enough to stay afloat, though. 

 

But it seems they can’t survive for long if they’re not finding ways to keep their business running whilst freeing up cash.

 

Caught in the post pandemic slowdown that is threatening their very existence, a large number of cash-strapped small business owners and freelancers are turning to bartering, an age-old system exchange system of goods and services, to preserve cash.

 

Bartering has evolved over time and is now a mere shadow of what it was a century ago. 

 

It’s more than a “I’ll take your goods or services, if you take mine.” kind of an arrangement now.

 

Bartering with a modern twist

Online barter agencies brought forth a digital twist on a century-old tradition by creating a platform where multiple businesses and individuals meet, get involved in a barter arrangement, and rack up trade credit that can be used for future transactions. A trade credit is a unit of account specific to the barter network and can be used as an alternative to cash to pay someone that provides goods or services.

 

Therefore, it’s now more like “you take my goods and services and I’ll probably take someone else’s in future when I need something.”

 

Taking advantage of the wide reach of the world wide web, these barter exchanges get multiple parties from different parts of the world to come together on the platform, and help them find other companies or goods or services they can do business/barter with.

 

So how does it work online?

Put simply, much of the bartering happens virtually through online exchanges and platforms that match demand and supply, which in bartering terms, means offers, and needs.  So how does bartering work on these digital platforms?  Let’s take a look.

 

Businesses looking to barter usually create a listing in the platform describing what they’re offering, what they’re looking for. Whether you’re looking to buy or sell something, it is important that pertinent details about the proposal/offer are added to further the chances of attracting the right customer or seller.  

 

As soon as the listing is up, the barter partners can submit their bids and offers detailing what they’re willing to do and how much they want in cash and in kind in return etc.  Once the parties involved come to an agreement, the funds/trade credits will be locked and stay that way until the buyer marks the transaction as complete.

 

More to bartering than just free up cash

Apparently, there are more benefits to engaging in a barter deal for a business than just preserving cash. For instance, a business can find new customers through bartering platforms and sell off their unsold inventory or put their excess capacity to use.  

 

A happy barter partner can pave the way to more business opportunities through referrals, which, in turn, could bring more cash into the business. Even businesses that had previously looked at barter networks as simply unfeasible are now getting on board.

 

Here’s a couple of examples on how freelancers in strife and cash-strapped businesses can leverage the digital bartering model to get by without spending cash.

 

Struggling to find steady work, an experienced carpenter signs up with a barter platform online in a bid to swap his services and get paid in kind. He strikes a deal with another person to build out his garage in exchange for some virtual currency (trade credits), which he ends up spending on buying chicken, motorcycle parts and baby care products for his infant girl.

 

A construction company found it really hard to find new business, despite burning cash on advertising and roadside signs. Wanting to give bartering a try, they hop on to a barter platform online and quickly whip up an offer for painting a house/office for £2500 in part-cash and part-barter arrangement (£1000 in cash and £1500 in virtual trade currency)and put it out there for other platform members to evaluate. A small business which was looking for barter partners to renovate its office premises scooped them up on their offer and the arrangement was a win-win for both the parties involved. In addition, the construction company did a good job and was subsequently referred to a few more cash-paying customers and more potential customers started sending business inquiries to them through the platform itself.

 

Summing up

Internet barter platforms are simplifying bartering and making it much more attractive to small businesses and freelancers. In doing so, they’re also creating new work opportunities and business for their members, which is really commendable as the global economy tries to get back to normal after being dealt a severe blow by the pandemic.  No wonder bartering is growing popular in a short span.