Frequently Asked Questions
Q. What is barter?
A. Barter is a recognised way of buying and selling using Barter Dollars instead of Cash Dollars (therefore saving cash for all members of BarterZone). In New Zealand over $250 million each year is traded using Barter.
Q. What are the advantages of barter?
A. There are many, with the primary being new business. Barter provides you with new customers and allows you to broaden your market beyond your cash-paying customers. Barter also helps in preserving cash. You can trade your own goods and services to buy those things you need instead of spending cash to buy goods and services. Therefore you retain more cash and surplus time and goods can be utilised.
Q. Why do people and businesses trade?
A. Simply - to make a profit. Trade is an inexpensive way for them to find new customers. And every time they trade for something they need, they conserve cash.
Trading products or services to cover some expenses costs them less than paying with the proceeds from cash sales, so they make a profit.
Q. How do I make a transaction?
A. BarterZone facilitates barter transactions between its members using the following methods:
Q. How do I purchase using my BarterZone account?
A. Find suppliers through BarterZone using the BarterZone Website.
Pay for the product or service using one of the methods listed above under How do I make a transaction.
Q. How do I sell?
A. BarterZone members are simply agreeing to accept an alternative form of currency for payment. Members can purchase any product or service within the BarterZone network in exchange for BarterZone trade dollars (which are equivalent in value to $1 NZ dollar).
Q. How does BarterZone make money?
A. There is a small transaction fee. This represents a fee for originating new business for members of the BarterZone exchange. In addition to your standard cash clients, trade business provides NEW business from NEW members over and over.Cash Fee's are payable in NZ $ and Trade Fee's are payable in BZ $.
Q. Why do we pay fees?
A. Fees are used for the following:
Q. What can I barter if I don't own a business?
A. Individuals are welcome and invited to participate in the BarterZone community. BarterZone is like TradeMe, but instead of buying and selling using 100% cash, our members use trade dollars, or credits. Now, that opens up a whole new world of opportunity!
Q. What can I barter on BarterZone?
A. Services and Products-Any personal or business services can be bartered PLUS Real Estate. Think of this as a TradeMe of sorts, but better; it's trade dollars!
Q. What if I get too little business
A. BarterZone works to make sure that its members are satisfied with the level of business they receive through barter. BarterZone guarantees to bring you more business - if you do not receive additional sales as quickly as you would like to, BarterZone will give your service or product free promotion through email and its website.
Q. What if I get too much business
A. If you receive too much additional business and can't keep up, BarterZone will work to find additional businesses with the same product or service, so that the demand is spread out.
Q. Who Else Barters
A. According to the International Reciprocal Trade Association (IRTA), around $600 BILLION dollars are transacted through barter each year. As such, barter is one of the fastest growing phenomena in business today! Companies ranging in size from huge international corporations right down to individuals barter.
A. In accordance with General Accepted Accounting Principles, members must record all transactions using the valuation method of $1 BarterZone dollar is equivalent to $1 NZ Dollar. The member creates an account in their General Ledger to record all trade dollar transactions. Similar to a cash sale, when a sale occurs, the revenue BarterZone account is credited. When purchases occur, the asset, or expense, BarterZone account is debited. The BarterZone account will equal the balance of your BarterZone statement at all times.
A. There is no tax advantage or disadvantage to barter transactions. Income generated through BarterZone is taxable in the year in which the sale occurs. The IRD recognises barter-exchanges as third-party record keepers of barter transactions and stipulates that all trade revenue earned by businesses is treated as income, while all trade purchases for business expenses are treated in the same way as cash purchases, and are tax deductible in the same way.
A. GST is included in the total BarterZone transaction amount. As the seller, you are responsible for paying GST on sales and remitting the GST to the IRD in cash. However, GST expenses can be recouped when you spend your BarterZone dollars within the exchange, provided that purchases made are taxable purchases.
Q. Are there any tax advantages to BarterZone?
A. There are no tax advantages or disadvantages to barter. Barter income is equal to cash income for tax purposes. Trading should be considered a marketing avenue, not a tax tool. However, as with cash income, trade purchases that are business related are also tax deductible.
Q. If I sell to a business who sells a product I can't use, my barter currency is wasted.
A. Barter is a not a one for one swap. You sell what you have, buy what you need. You accumulate barter currency ($1 BarterZone Dollar is equivalent to $1 NZ Dollar). Sales can be made online, on the phone, or in person. Thousands of likeminded consumers and businesses buy and sell every conceivable product and service using barter, not cash.
Q. Barter can't pay employees... or can it?
A. Employees are rewarded in a number of ways, for example with a barter paid holiday, dinner for two, ten pin bowling, motor vehicle repairs or you can provide them with BarterZone Gift Certificates. Motivate without using cash.
Q. Barter sounds great but I can't pay my mortgage with it.
A. You may not be able to pay your mortgage with Barter currency, but you can pay a lawyer, an accountant, advertising, media, PR, marketing services or even acquire office supplies. Barter can free up cash to pay your mortgage.
Q. I'm a service business. All I have is my time.
A. BarterZone is perfect for a service business. When you aren't working, your time is un-billable. Turn downtime into BarterZone dollar credits.
Q. My business is product intense and margins are low. Barter can't help me.
A. Is your stock outdated? Without barter you would have to keep trying for a retail sale, or else liquidate it at 10% on the dollar. Barter opens opportunities to trade that inventory at full retail value. Use the barter currency on strategies to grow your business. Transform your obsolete or outdated stock into profit.
Q. Barter won't increase my cash flow.
A. Barter will expand your business network. As you increase your customer base through barter, you'll generate more word-of-mouth business. Simply put, barter clients will bring you new cash clients as well.
Q. How does barter work within the BarterZone Exchange?
A. Clients of BarterZone use Trade Dollars in place of cash to handle their trades. For example, if a client sells $1000 worth of products to another client, they will receive $1000 in Trade Dollars credited to their BarterZone trade account. These Trade Dollars can then be used to buy from the other trading clients within the BarterZone network. BarterZone is a third-party record keeper, furnishing online statements to clients, which reflect their sales, purchases, fees and current trade dollar balance.
Q. What does it cost to get started in the BarterZone exchange?
A. The Membership is to join is $295 (inclusive of GST)
Q. How can one trade more profitably?
A. If you regularly take cash out of your company for living expenses, home improvements, travel, etc. why not take out a barter income instead and save your cash for products and services that BarterZone members may not be able to supply?
Q. Are there any unusual uses for barter?
A.Yes. BarterZone provides endless opportunities. Here are just a few creative ones:
Q. Suppose I want to spend more than what is in my BarterZone trade account?
A. If and when you require an interest free line of credit please contact one of our trade brokers for assistance.
Q. Who decides what prices the seller will charge on BarterZone?
A. In essence, the market establishes pricing just as it would for cash. The seller anticipates to trade their services and goods at their prevailing prices. By accepting or rejecting prices, BarterZone Exchange members are ultimately the determining authority in pricing integrity. To monitor fair trading policies, BarterZone brokers keep in constant contact with Members.
Q. Can I charge part cash and part trade?
Q. I need more cash business. Why should I trade?
A. The sales you make through BarterZone are truly plus sales for you. If you did not belong to The BarterZone Exchange you would never see these sales.
When you use the trade income from these sales to buy things you would otherwise have paid cash for, you are left with cash in hand to use for other things. The net effect is the same as if your cash sales were increasing.
Every time you save a cash dollar it is as good as earning an extra cash dollar.
Q. Why join the BarterZone Trade Exchange?
A. The issue with one-on-one trading that you are familiar with is that each member must want exactly what the other has to offer. Within the BarterZone network, everybody barters with everybody, even if they do not want what the other person has to offer. Trade dollars are credited to a trade account with BarterZone, which can then be spent on any service or item needed or wanted from within the trade network.
We are independently owned and operated and we understand the many ways you can use your goods and services to generate non-cash income, get what you need and want, and build more traffic and referrals.
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