Barter

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.



comments powered by Disqus
Hot Definitions
  1. Marginal Analysis

    An examination of the additional benefits of an activity compared to the additional costs of that activity. Companies use marginal analysis as a decision-making tool to help them maximize their profits. Individuals unconsciously use marginal analysis to make a host of everyday decisions. Marginal analysis is also widely used in microeconomics when analyzing how a complex system is affected by marginal manipulation of its comprising variables.
  2. Treasury Inflation Protected Securities - TIPS

    A treasury security that is indexed to inflation in order to protect investors from the negative effects of inflation. TIPS are considered an extremely low-risk investment since they are backed by the U.S. government and since their par value rises with inflation, as measured by the Consumer Price Index, while their interest rate remains fixed.
  3. Gilt-Edged Switching

    The selling and repurchasing of certain high-grade stocks or bonds to capture profits. Gilt-edged switching involves gilt-edged security, which can be high-grade stock or bond issued by a financially stable company such as the Blue Chip companies or by certain governments.
  4. Master Limited Partnership - MLP

    A type of limited partnership that is publicly traded. There are two types of partners in this type of partnership: The limited partner is the person or group that provides the capital to the MLP and receives periodic income distributions from the MLP's cash flow, whereas the general partner is the party responsible for managing the MLP's affairs and receives compensation that is linked to the performance of the venture.
  5. Class Action

    An action where an individual represents a group in a court claim. The judgment from the suit is for all the members of the group (class).
  6. Retail Sales

    An aggregated measure of the sales of retail goods over a stated time period, typically based on a data sampling that is extrapolated to model an entire country. In the U.S., the retail sales report is a monthly economic indicator compiled and released by the Census Bureau and the Department of Commerce.
Trading Center