Back to Business Basics: Bartering

Business has taken quite the turn in the United States in the past few decades. The country went from a manufacturing-based economy to a service-based economy. From there it can be said it turned further into a consumption-based economy. Now markets plummet when “consumers aren’t opening their wallets.”

Yay industrialization?

This didn’t use to be the case. Even before the Industrial Revolution, business in the U.S. and beyond was surviving. How?

Bartering.

Yes, people made goods or provided services in exchange for other goods or services. For example, a grocer/farmer may trade their yield for clothing. In modern times, a farmer may have traded certain crops for a haircut, accounting services or even medical attention.

Would I blow your mind if I told that in 2012, yes in our modern age, bartering is making a comeback?

Harvard Business Review (HBR) blog network contributor talk about this very topic. Of course our society had to modernize the inferior term of bartering, today the activity is known as “reciprocal trade.” The article even links to the International Reciprocal Trade Association. According to the IRTA, over 400,000 businesses and $12 Billion dollars worldwide can be linked to bartering.

Is this a good thing? Is it a bad thing?

It’s hard to say. Businesses need to be diverse and adaptable in order to stay in business. Participating in barter exchanges may open businesses up to new markets and partners whom they would have missed. But it is very interesting to see that over 400,000 businesses worldwide are avoiding the use of “real currency”, i.e. American Dollar, Euro, and the like, in exchange for tangible goods and services.

I would even venture to say that barter exchanges could be more sustainable internationally than trying to figure out which currency in which to do business. Think about it; in accounting assets are always more valuable than cash-on-hand. Bartering, in that simple analogy, makes sense.

As a marketing guy, I immediately thought of how this throwback business practice would work in the marketing and advertising industry. Would I be willing to offer my services to Tesla Motors for, let’s say, its newest coup model?

I could work for that.

But then I thought, what would I do for food, utility bills and entertainment cash? As sweet as the car would be, bartering my services for a car doesn’t fulfill my needs like the Almighty Dollar.

Our society is not built for barter exchanges. But if this could serve as a “black swan“, we should stay alert for systemic changes that would better suit such economies.

I guess my Tesla Motor Model S will have to wait.

 

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2 thoughts on “Back to Business Basics: Bartering

  1. Pingback: 40 Items to Barter in a Post-Collapse World | THE JEENYUS CORNER « The Jeenyus Corner

  2. Unfortunately the barter exchange industry is not necessarily always ethical. IRTA (the International Reciprocal Trade Association) has a myraid of problems including a refusal to publish its own accounts, a refusal to criminal check its directors (Ron Whitney and Annette Riggs) and the promotion of deficit spending by barter exchange owners and operators. You can view the discussion website about IRTA at http://www.internationalreciprocaltradeassociation.com

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