Frequently Asked Questions...
Q: What are the advantages of trading?
A: There are several. First of all, trade produces new business . . . and allows you to expand your market beyond your cash-paying customers. Secondly, trade conserves cash. Instead of spending your cash to purchase needed goods and services, you can trade your own goods and services for the things you need, keeping more cash in your business for other purposes. Finally, trade puts idle resources to work. Excess time, excess inventory, and excess capacity are converted into needed goods and services.
Q: How does trading work with a trade exchange?
A: Members of our trade association use trade credits, instead of cash, to handle their transactions. If a member trades one thousand dollars worth of products to another client, he will receive one thousand dollars in trade credit which can be used to purchase anything from our other trading members. Cruises, hotel rooms in most major cities, restaurant meals, advertising, printing, as well as thousands of other products and services can be obtained with trade credit. We are simply a third-party record keeper, sending monthly statements to all clients showing their purchases, sales, and current trade credit balance.
Q: So, I'm actually monetizing my excess capacity?
A: Exactly. That's just a fancy way of saying that you're turning your excess capacity into money!
Q: What kinds of companies use trade?
A: Globally, over 470,000 businesses of all types are use barter. It is estimated that 65% of Fortune 500 companies engage in trade to one degree or another.
Q. Are there any unusual uses for trade?
A. Yes. Trade provides limitless opportunities. Here are just a few creative ones:
Pay Employees. Use trade dollars to pay employee benefits, bonuses, and perks.
Pay Bills. Use trade dollars to pay some of your outstanding cash bills. If you owe a vendor money for a product or service that you just don't have enough cash to pay - talk to them about trading with New Barter Networks. If they become part of our network and you have a trade balance to cover the amount owed to them - then you can immediately pay them.
Collect Past Due Receivables. Businesses that are unable to pay money they owe you would probably be very willing to pay you with their product or service. You may not need these offerings directly, but New Barter Networks may have a market for their products. So call New Barter Networks with the specifics and we may be able to move their products. They may become part of our exchange network and work with their own account or we can process the sale transactions through your account to earn you trade dollars.
Q: What does it cost to get started?
A: We offer free membership with no enrollment fee and a modest monthly membership fees begins after 6 months to cover accounting, marketing, promotions and member services.
Q: What if everyone wants my products and services and I can't find enough to buy?
A: Every member business is assigned a Trade Consultant in our office. They do a complete spending analysis with you on your current purchasing as well as projections for your business in the future. You can spend your trade in many of the same ways you spend your cash. If your products or services are in high demand, we are happy to contact you first and tell you who is looking to purchase from you and what their needs are. In other words, you are always free to put a limit on how much you want to sell for trade dollars. But remember, trade attracts new customers for you!
Q: What if I need to make a purchase before I've earned trade dollars in the system?
A: Just like a bank, we encourage members to apply for a line of credit. If you qualify, you can begin purchasing immediately and we'll charge a small interest rate on your balance, payable in trade dollars.
Q: Who decides the prices the seller will charge on barter?
A: Prices quoted to members in trade dollars are the same as prices quoted by those members to cash paying customers. Essentially the market determines pricing just as it would for cash. Where margins are tight, a seller is allowed to adjust his price to manufacturer’s list price. Such a situation regularly occurs with electronic items such as television sets and copiers. By accepting or rejecting prices, New Barter Network’s members act as the ultimate authority in pricing integrity. Business owners (like you) are educated shoppers. Trade is simply a mode of payment - just like a credit card or cash.
Q: What should I do when trade prices are substantially higher than cash prices?
A: Actually they are not always higher. But, in those instances where they are, each client must consider how much he has actually invested in the trade credit held in his account. If your merchandise cost is fifty cents on the dollar, $10,000 worth of trade credit actually costs only $5,000. If the member is in a service-related business, the trade credit may only cost him his idle time. It will often be less expensive to pay full retail price with trade credit than to get the same article at a discount for cash. Seasoned traders are always aware of this difference and use it to their advantage. On the other hand, if someone overprices his products or services beyond a reasonable limit, no one should do business with him and should call our office for another referral.
Q: I already trade on my own. Why join New Barter Networks?
A: The problem with one-to-one trading is the incidence of coincidence. That is, each business must want what the other has to offer. In our exchange, however, everyone can trade with anyone even if he does not want what the other person has. Trade credit can often be spent just like money – on items everyone needs and often wants.
Q: What happens if I quit New Barter Networks?
A: According to our trade rules, any client who quits New Barter Networks must be given 60 days to spend his trade credit balance.
Q: Can I exclude anything in my inventory from trade?
A: Yes. You should only trade what you want to trade. The idea of trade is to move excess inventory or that inventory which gives you an advantageous profit margin.
Q: Are there tax advantages to trading?
A: No, trade income is treated the same as cash income. There are no tax advantages or disadvantages to trading. Trading should be considered a marketing and sales-generating tool, rather than a tax tool. New Barter Networks will provide your company with a 1099B at the end of the year for all of the sales you have transacted on our network.
Q: Can I deduct my expenses?
A: Yes. Expenses made using Trade Dollars create the same deduction as if done in a cash transaction and therefore offset your tax liability. And, of course, administrative fees paid to us (and most transaction fees) are tax deductible, too.
Q: What about sales taxes and shipping?
A: When you spend, sales tax is paid in cash. When you sell, you then collect the sales tax in cash and pay the government in cash. If you buy a product that requires shipping from a member, you (the buyer) will need to pay shipping costs to the seller in cash.
Q: How does New Barter Networks make money?
A: We charge an administrative fee after your first year of membership, plus a transaction fee when you buy things from other members. (You may also choose to pay a lower fee that applies to both purchases and sales.) This fee is New Barter Networks' main cash-producing vehicle, necessary to keep the exchange operating on a financially responsible basis.
Q: How can I trade outside of my local area?
A: Trade exchanges participate in reciprocal relationships with other exchanges offering a multitude of additional trade opportunities. For instance, our members' travel requests are fulfilled on an available basis, through our vast Global Network. We also help our local businesses looking to open new markets or acquire goods from across the country by using the distribution channels we connect to, nationwide.
Q: What's the difference between your Member Directory and your Product Marketplace?
A: Our Member Directory is where you would go when you're looking for contact information of a member in a certain business category when you want to purchase a particular type of goods or services. For example, you might be looking to have your office painted and you want to contact a painter. Or, you need a limo service for a particular evening and need a quote.
Our Product Marketplace is where you'd go to find a specific product or service that is quantifiable and is being offered for a specific price. You can then simply buy the item online or using our phone app. Examples would be gift certificates, dentist's teeth whitening services, tickets to a game or theatrical event, or specific merchandise.