verb – convert into or express in the form of currency
Corporations who understand the benefits of barter are always looking for ways to monetize their barter account. Their objective is convert barter currency to cash currency. Let’s look at some common ways to make this happen:
>>When you spend trade dollars for items that are already budgeted for in cash, replacing cash in your spending, you retain the cash that would have been spent and your trade dollar converts to cash on your balance sheet. This is the most desired form of monetization because you are monetizing your barter at the rate of 100%. These items could be services like advertising, accounting or legal services, pest control or HVAC repair, travel and client entertainment or capital expenditures such as office furniture and equipment.
>>You can also monetize your trade by “selling” your trade dollars to yourself or your employees at a discount. You should never use trade dollars in a business account for personal use unless you have purchased them from the company. Not following this rule will expose your business to taxation on barter sales. It’s better to give yourself or your employees a perk by accessing products and services available on barter and paying the company a reduced cash amount. This creates a deduction for the company for the discounted portion and monetizes the portion received in cash from you or your employee.
>>Another way to monetize your barter dollar is to purchase products from our warehouse or from other members and then resell them for cash. It is possible to acquire wholesale lots of certain types of products from time to time in barter so that you can resell them through cash channels like eBay, Craigslist, or Amazon. Be careful though not to interfere with the seller’s cash distribution channels by competing with them for cash business. This is especially important in regards to tickets or certificates, which may have certain restrictions in regard to selling them for cash.
Equitrade continues to believe that the best way to use your barter dollar is to grow your business with advertising, promotion and marketing. Since most businesses fall short when it comes to a marketing budget, there’s no better way to outspend your competition than accessing your excess capacity and generating incremental business through your Equitrade account.