Barter trade
Barter is a trade strategy which involves directly exchanging goods and services without the use of money or any other standard medium of exchange. As shown in the article “Let’s make a deal”, exchanging of pizzas for storage space and exchanging gift certificates for medical services are all about barter (Bertrand, 1995). This trade type is currently gaining popularity in the trade industry since many have come to realize how beneficial it can be. Even though it may appear simple, it is quite complex.
A number of factors exist that favor barter trade compared the other trade type; monetary trade. Below are some of the factors that make individuals prefer bartering of goods and services to using money as a means of payment.
Liquidity problems
Liquidity problems tend to lower peoples creditworthiness. Therefore, anyone in such a predicament has to use goods or services to make payments since he has no cash in hand to settle his debts. Barter trade is a very effective way for any organization or individual wishing to overcome cash flow problems.
Inflation/Devaluation of currency
When an economy is faced with inflation and prices shooting higher than normal, bartering of goods and services can be a good remedy for this situation. Since money, the usual medium of exchange, loses its value, individuals opt to exchange goods for goods. In the 1990s, barter activities were reported to increase in Russia as it was experiencing a high inflation rate. Confidence in money had diminished completely as their currency suffered devaluation (Wankel, 2009).
Unfavorable tax systems
Wankel continues to say that “organizations tend to barter it the tax system in their country does not favor their operations”. For instance, in Russia, the tax authorities had been granted the go ahead to block accounts of those who had tax arrears. Consequently, the affected could not access their money in banks to carry out transactions and therefore forced to turn to barter trade (p 120).
Absence of foreign currencies
The absence of foreign currencies is another factor which hinders trade between countries, in turn favoring barter. Wankel refers back to the communist power times when trade between European countries was mostly barter due to lack of common currencies (p 120). Such currencies act as common measures of value recognized and acceptable by both parties to transactions.
Surplus production and idle resources
Barter practices have been used in economies with surplus production and idle resources to dispose what they may have in plenty for what they may be lacking. However, the challenge in this undertaking lies in concept referred to as the double coincidence of wants. For it to work, a party must be having what the other one wants.
Technological breakthroughs especially the Web
Advances in terms of technology have also played a major role in popularizing barter trade. The current breakthroughs in web related technologies have made trade activities very easy and fast. Barter activities are no longer that complex since software programs have been developed and which have turned out be major boosts to the trade industry.
Conclusion
As much as the bartering can help organizations and individuals increase sales, overcome liquidity problems, beat inflation and other barriers to trade, the system has its own disadvantages. As noted from Winkel’s book, it requires double coincidence of wants and goods ought to be divisible; challenges not faced in monetary trade (p 119).
Our Service Charter
-
Excellent Quality / 100% Plagiarism-Free
We employ a number of measures to ensure top quality essays. The papers go through a system of quality control prior to delivery. We run plagiarism checks on each paper to ensure that they will be 100% plagiarism-free. So, only clean copies hit customers’ emails. We also never resell the papers completed by our writers. So, once it is checked using a plagiarism checker, the paper will be unique. Speaking of the academic writing standards, we will stick to the assignment brief given by the customer and assign the perfect writer. By saying “the perfect writer” we mean the one having an academic degree in the customer’s study field and positive feedback from other customers. -
Free Revisions
We keep the quality bar of all papers high. But in case you need some extra brilliance to the paper, here’s what to do. First of all, you can choose a top writer. It means that we will assign an expert with a degree in your subject. And secondly, you can rely on our editing services. Our editors will revise your papers, checking whether or not they comply with high standards of academic writing. In addition, editing entails adjusting content if it’s off the topic, adding more sources, refining the language style, and making sure the referencing style is followed. -
Confidentiality / 100% No Disclosure
We make sure that clients’ personal data remains confidential and is not exploited for any purposes beyond those related to our services. We only ask you to provide us with the information that is required to produce the paper according to your writing needs. Please note that the payment info is protected as well. Feel free to refer to the support team for more information about our payment methods. The fact that you used our service is kept secret due to the advanced security standards. So, you can be sure that no one will find out that you got a paper from our writing service. -
Money Back Guarantee
If the writer doesn’t address all the questions on your assignment brief or the delivered paper appears to be off the topic, you can ask for a refund. Or, if it is applicable, you can opt in for free revision within 14-30 days, depending on your paper’s length. The revision or refund request should be sent within 14 days after delivery. The customer gets 100% money-back in case they haven't downloaded the paper. All approved refunds will be returned to the customer’s credit card or Bonus Balance in a form of store credit. Take a note that we will send an extra compensation if the customers goes with a store credit. -
24/7 Customer Support
We have a support team working 24/7 ready to give your issue concerning the order their immediate attention. If you have any questions about the ordering process, communication with the writer, payment options, feel free to join live chat. Be sure to get a fast response. They can also give you the exact price quote, taking into account the timing, desired academic level of the paper, and the number of pages.