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. Countertrade

    International trade in which goods are exchanged for other goods, ...
  4. Medium Of Exchange

    An intermediary instrument used to facilitate the sale, purchase ...
  5. Payment

    The transfer of one form of good, service or financial asset ...
  6. Currency

    A generally accepted form of money, including coins and paper ...
Related Articles
  1. Personal Finance

    Summer: Time For Teaching Your Kids ...

  2. Forex Education

    A Primer On Currency Regimes

  3. Fundamental Analysis

    A Beginners' Guide To Managing Your ...

  4. Forex Education

    How To Trade Currency And Commodity ...

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center