It’s a simple concept of exchanging products and services, yet there are still misconceptions when it comes to Bartercard. This week’s blog sets the record straight and dispels the most common Bartercard myths, whether you are already a member or a small or medium-sized business looking to join.
Myth: I won’t be able to spend my trade dollars
This is one of the biggest objections to joining Bartercard. When you join Bartercard’s business marketplace, a comprehensive business analysis is conducted so we can identify potential suppliers already available. If there are insufficient suppliers available to suit your specific business requirements, we will work with you to bring on additional new suppliers to satisfy your needs. Many of Bartercard’s top trading members have successfully improved their business profitability by proactively recommending and referring new suppliers.
We don’t claim to be able to provide all members with everything they need. But we do find that when members (small businesses or medium-sized businesses) are engaged and communicate with their Bartercard office, appropriate spends can be identified.
Bartercard is also seen as an excellent way to reward high performing staff. Some businesses even give staff their own Bartercard cards, which are credited each quarter based on performance. It’s a great approach to staff rewards and to make your staff to feel valued. They can make a range of lifestyle purchases like accommodation at destinations world-wide, dining and massage.
I can’t get my core spends using trade dollars
This one has some truth to it. Certain expenses like utilities, rent and wages do require cash payment, so it’s not realistic for a business to run entirely on Bartercard without cash-paying transactions. We always suggest Bartercard is in addition, or a supplement, to your existing cash business (and not a replacement), and should make up approximately 10-15 percent of your business. A dedicated Trade Co-ordinator will work with you in identifying opportunities to spend, and help you source products and services on trade.
Myth: Trade dollars aren’t equal value to cash
One trade dollar has the value of $1 and members should price their products and services accordingly. In 2017 we launched Fair Trading at Bartercard, a guide setting out the standards of trading to create a fair, transparent and equitable trade exchange. From an accounting and tax perspective, Bartercard income should be viewed as you would your cash income. GST is payable on sales and deductible on purchases. .
The fees are too high
Bartercard charges a minimal monthly service fee which is tax deductible. A fee is also charged on all transactions. The average Bartercard transaction fee is 7.5 percent (which is low in comparison to daily deal websites and discount sites who charge approx. 15-20 percent of the sale price and stipulate the offer must be at least 50 percent of the original sale price). The fees cover provision of a dedicated Trade Co-ordinator, full e-commerce capabilities, proactive marketing of the member business to businesses nationally, online monthly statements and an interest-free line of credit.