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Barter Exchanges
One way to market your goods or service is
through bartering, in which goods are exchanged
between two parties without an exchange of
money. To facilitate barter, a number of
exchanges have been formed, many of them
on-line. These exchanges help you find other
parties that: are interested in what you
have to offer and that offer goods or services
that you seek to obtain.
When choosing a barter exchange,
consider
these factors:
- The current roster of members, what they
have to offer, and what they are looking
to get in exchange. If there is a fee to
join, you should be given sufficient information
to judge how likely you are to make successful
trades through that exchange.
- The membership fee. It can be annual, monthly,
or a combination of both. Sometimes there
can be a one-time initiation fee.
- The fee you must pay for each barter transaction
realized through the exchange. Sometimes
it is a flat fee, more often a percentage
commission. If it is a commission, understand
in advance how transactions are valued by
the exchange, and how you can appeal disputes.
- Whether the exchange has any pending complaints
or legal action against it. Check with the
Better Business Bureau and your state department
of commerce or department of consumer protection.
See if either the Federal Trade Commission
or the IRS has any pending action against
the exchange.
- What guarantees the exchange offers to ensure
that both parties to a deal live up to their
ends of the bargain. Does the exchange create
an enforceable contract between you, and
does it help you enforce it?
- The exchange's policies on deadbeat participants.
Does it kick them out?
- The exchange's rating system for participants.
Do parties to a swap score each other's performance?
This would help you determine whether to
enter into a transaction with a given member.
- Your legal advisor's assessment of the protections
offered by the exchange to its members.
- Your tax advisor's assessment of the exchange's tax policies regarding the valuation of transactions
and the generation of Forms 1099-B at year
end.
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