Barter

AAA

DEFINITION of 'Barter'

The act of trading goods and services between two or more parties without the use of money. Bartering benefits individuals, companies and countries that see a mutual benefit in exchanging goods and services rather than cash, and it enables those who are lacking hard currency to obtain goods and services.

INVESTOPEDIA EXPLAINS 'Barter'

An example of a barter arrangement would be if someone built a fence for a cattle farmer in exchange for food. Rather than the farmer paying the builder, say, $1,000 for the fence, he would give the builder a similar value in beef. Virtually any good or service can be bartered.
 
For individuals, bartering not only has an obvious financial benefit - it lets you keep more money in your pocket - it may also have a psychological benefit in that it can create a deeper personal relationship than a purchase and sale transaction.
 
When thinking about what you can barter to obtain a good or service you want, consider not only any possessions you might be willing to part with, but also any skills you have to offer. These skills might include what you do professionally, but they can also include any activity you’re proficient at, from cleaning to babysitting to yard work to baking. You could even offer the use of your truck to someone who needs to move furniture in exchange for their help with, say, proofreading your new marketing newsletter.
 
One limitation of bartering is that you can only exchange goods and services with people you know. So if you don’t know anyone who is offering what you want, you won’t be able to get it through bartering. To overcome this limitation, bartering groups and bartering websites have been created to help barterers find more people to trade with.

RELATED TERMS
  1. Time-Based Currency

    A currency whose value is based on one man-hour of labor. A time-based ...
  2. Negotiation

    A strategic discussion that resolves an issue in a way that both ...
  3. Hard Currency

    A currency, usually from a highly industrialized country, that ...
  4. Trade

    A basic economic concept that involves multiple parties participating ...
  5. Soft Currency

    A currency with a value that fluctuates as a result of the country's ...
  6. Boot

    Cash or other property added to an exchange or other transaction ...
Related Articles
  1. Personal Finance

    Summer: Time For Teaching Your Kids About Money

    Use holiday time to teach your children about earning, saving and spending money.
  2. Forex Education

    A Primer On Currency Regimes

    Currency regimes are dynamic and complex, reflecting the ever-changing landscape of their respective nations' monetary and fiscal policies.
  3. Fundamental Analysis

    A Beginners' Guide To Managing Your Money

    Discover what you need to know before becoming your own money manager.
  4. Forex Education

    How To Trade Currency And Commodity Correlations

    Relationships between currencies and commodities exist throughout the financial markets. Find out how to trade these trends.
  5. Forex Education

    Drastic Currency Changes: What's The Cause?

    Currency fluctuations often defy logic. Learn the trends and factors that result in these movements.
  6. Forex Education

    History Of Coinage In The U.S.

    From the barter system to commemorative coins, we look at the history of U.S. money.
  7. Fundamental Analysis

    What Is the Quantity Theory of Money?

    Take a look at the tenets, assumptions and challenges of monetarism's principal theory.
  8. Forex Education

    The History Of Money: From Barter To Banknotes

    Money has been a part of human history for at least 3,000 years. Learn how it evolved.
  9. Economics

    What Is Money?

    It's a part of everyone's life, and we all want it, but do you know how it gains value and how it is created?
  10. Professionals

    Financial History: The Evolution Of Accounting

    Follow accounting from its roots in ancient times to the profession we now depend on.

You May Also Like

Hot Definitions
  1. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  2. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  3. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  4. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  5. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  6. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
Trading Center