Of course, the success of bartering depends on the value and demand of the item that you want to barter. However, the main responsibility lies in the individual who is handling the process. You need to be fully aware about the system of bartering in order to have the upper-hand in the trade. You need not worry since bartering is all about nailing the following four steps.
Understand the Value of your Goods
If you are trading something tangible, then you need to know the value of it and its market demand. For example, it’s say that you are bartering gold. You cannot just buy gold because you have a lot of money. You need to see whether there are potential buyers in the area and whether you will be able to earn back your investment. This market research will ensure the safety of your investment. You can also compare the price of the good to similar items in the market to see if there is a better and profitable alternative. Taking such contingencies will definitely ensure that you are investing your money on the right item.
Keep an Eye on Taxes
You need to report all your bartering transactions to the income tax department. This is a legal requirement that you definitely have to adhere to. This does not mean that you have to record and pay for every single exchange. For instance, trading domestic goods is not an issue at all. However, if the bartering takes place between two business entities for commercial reasons, then it is recorded as taxable income and therefore you have to pay your respective taxes to the government. If you barter on a regular basis, then you must get yourself a personal accountant.
Have a Deadline
Before you draft the contract, you need to decide how long this deal is valid for. You need to set a deadline to fulfil your end of the bargain and must ask your bartering partner to do the same. It is best to consider the odds and set the right date since missing a deadline is a serious offense that can make you look irresponsible and unprofessional. If the contract is on for the long haul, then you might want to set review dates to ensure that both parties are happy with the deal.
Record Everything
Most bartering processes take place verbally. This can make your investment unsafe since it is not protected well enough. If you are investing a lot of money – especially on the long haul –get everything written down on the document and get it signed by your partner. This will give you a certain sense of assurance since it acts as a legible piece of evidence for the transaction. Moreover, documenting these details can be used as reference for future bartering purposes as well.
If you are able to follow the above guidelines, then you will be able to become a pro in bartering in no time. All you need is the passion for bartering and a thirst for information.
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