Tips for Bartering Goods and Services

I decided to update this article on bartering tips after a reporter from CNBC quoted me in an article about I bartered for a year’s worth of free haircuts.

Unfortunately, that story is no longer available online, so I can’t link to it.

Before bartering with my then hair salon, it had been quite some time since I’d last bartered for goods and services.

For example, at the time I got married, I was doing freelance photography along with freelance writing.

I’d been in touch with the PR people for a resort in the U.S. Virgin Islands where my husband and I hoped to honeymoon.

And one thing led to another with me bartering photography of the resort for the PR person in exchange for a half-priced honeymoon.

The only other time I’d bartered my services for goods was in the 1990s.

That was when a design company offered to create custom stationery and business cards for me if I, in turn, would do some promotional writing for them.

Together, we figured out how much the stationery and business cards would cost, and I gave them the same value in writing services.

Tips for bartering to save money

In some of my wedding books, I suggest bartering as a way of saving money on a celebration.

I still tell the story of my friend who bartered with the limousine company that transported her wedding party.

In exchange for a free limousine, she wrote a brochure for the company.

It isn’t just writers that can barter for goods and services.

One Wall Street Journal article I remembered told of a number of companies that, when tight on cash, turn to bartering.

These businesses ranged from movers to a refrigeration company.

With inflation at an all-time high now, bartering for something you need (versus paying cash money) may be a win-win.

That is, you get a product or service that you require, and the person you barter with gets something they need, too. 

Here are tips you need to keep in mind when bartering goods and services.

FYI, some people say that bartering is a synonym for haggling.

Understand the value of a barter

Just because you want to barter with someone doesn’t mean that they’ll find value in the services that you have to offer.

I’m lucky in that I know how to write and write well.

Pretty much every small business needs writing services of one sort or another.

The same could be said, in this day and age, for website design or computer programming.

So, I would imagine someone wanting to offer these kinds of services for barter wouldn’t have trouble finding any takers.

Bottom line: make sure you have a service to offer that is potentially as valuable as the service you’re looking to receive.

Have a clear idea of what you need ahead of time

Don’t waste your time or anyone else’s by being all wishy washy about what you think you might possibly want via a barter.

Come up with a concise description of what service you need and what service you can offer so that when someone asks, you can tell them in a sentence or two. 

Do your homework when looking for barter partners

Like with most things in business, I find that networking and word-of-mouth recommendations usually pay off in the long run.

If, like me, you have a bona fide project for which you want to barter, tell everyone and anyone you know about your needs–and the services you can provide in return.

If you belong to a networking organization or a local Chamber of Commerce–even a playgroup with other moms or the Rotary Club–let them know about your desire to barter as well.

Don’t know anyone locally with whom you can barter?

Then check places like Craigslist, which has an entire section, under “For Sale,” for bartering.

Or even Facebook Marketplace.

Bartering tips: get it in writing

When you find someone to barter goods or services with, make sure you get your agreement in writing.

Not only do you want to include the basics of who and what’s involved, but also you should spell out the value of the services and the time line by which it will be completed.

Remember, just because you’re giving and getting something for free doesn’t mean that you shouldn’t get a contract for the exchange.

This will, hopefully, help you from getting ripped off.

Tax tips when bartering goods and services

Again, just because you’re getting something for “free,” that doesn’t let you off the tax hook.

Here’s how the Internal Revenue Service (IRS) sees bartering:

“If you engage in barter transactions you may have tax responsibilities. You may be subject to liabilities for income tax, self-employment tax, employment tax, or excise tax. Your barter activities may result in ordinary business income, capital gains or capital losses, or you may have a nondeductible personal loss. Barter dollars or trade dollars are identical to real dollars for tax reporting. If you conduct any direct barter – barter for another’s products or services – you will have to report the fair market value of the products or services you received on your tax return.”

This potential tax implication is yet another reason to make sure you keep good records about the give and take of bartering, and why you want to have your agreement in writing.

Of course, ask your tax provider how he/she thinks you should handle any bartering done during the tax year. 

Final thoughts on bartering goods and services

If you have a skill, any skill, it might be possible to barter your expertise for something you need.

It never hurts to ask.