Bartering Basics for Freelancers

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barterBartering is the process of swapping your goods/services for the goods/services of someone else without exchanging money. While bartering takes many different forms, it can be a way for freelancers to expand their businesses and collaborate with others. Here are some of the basics about bartering as a freelancer.

The Benefits of Bartering

Bartering allows you to fulfill a need without incurring a monetary cost. If you’re a designer working on a project and need assistance with developing a database, you may consider bartering with a developer who needs design assistance. This could potentially develop into future work and collaboration opportunities. Bartering with non-industry colleagues gives you a chance to network and create relationships with people who you may not otherwise work with.

Bartering also increases your work experience, expands your portfolio and adds another valuable reference to your list, assuming it goes well.

How to Start a Barter Arrangement

The most traditional way to start a barter relationship is by approaching someone individually. Many barters are formed by simply meeting someone who happens to know how to do something that you need done. More deliberately, you can solicit a barter arrangement, much like you would solicit new business. Once you determine if the other party has an interest, a good place to start is by providing a proposal, a breakdown of how the value of the services compare, and an explanation of why it would be a beneficial arrangement for both parties.

There are a number of barter groups or clubs that provide a meeting place for people looking to barter services. Some are more formal than others, and you will turn up a slew of them by Googling the term, “barter club.” Basically, barter clubs provide a gateway to finding someone who is a good fit for a barter relationship with you. The main features to look for in a barter club are other people bartering services comparable to yours and people offering services that you need.

There is also something called a barter exchange. An exchange is a third-party that facilitates barter arrangements for its members. Unlike clubs, you don’t locate another member and create a bartering relationship one-on-one. Through a barter exchange, you offer your services, and instead of trading directly to another person, you receive credit for the value of the service you gave. That credit then applies to a service provided by another member of the exchange for a service you need. This can be useful when you may need a service from someone who doesn’t have a need for what you’re offering, and that it allows you to delay “cashing in” your service until you find an acceptable provider.

When Not to Barter

Bartering isn’t always a good idea. If you’re creating an individual arrangement with someone, you want to make sure that the relative value of the services provided by both parties is aligned. This is fairly easy when bartering with someone in your industry, but if you’re bartering web design for lawn care, it can be a little trickier. You want to make sure you can reach an agreeable arrangement before beginning.

I would be hesitant to enter a barter relationship that has no documentation outlining exactly what services each party is providing. You should draw up a contract as if this were a paid job for the purposes of making sure both parties are on the same page and that both fulfill their responsibilities of the contract. Documentation is also very good to have in terms of your books. The IRS, for example, considers bartered services taxable, and they should be included on your income statement.

Before entering a barter arrangement, you also want to make sure that the other party is qualified to provide the services they are bartering and that they have adequate experience. Bartering shouldn’t mean cheap or less professional, and it’s a good idea to verify the experience of the other person as if you were hiring them. A bartering relationship should be like any other business relationship you would enter into, with the only difference being the lack of monetary exchange.

Personally, trading services with family and friends are the only barter-ish relationships I’ve been involved in. What’s your experience with bartering? Is it something you do regularly or would you not even consider it?

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  • StR

    Is there some well known exchange club for web2 developers? Maybe hosting + design + emarket + programming + seo barter club?

  • Justin

    I have dealt with bartering before and the quality usually has suffered, and expectations are often different on both sides. One instance where I bartered technical support with a chiropractor went horribly awry. He kept discussing computer questions while adjusting me, but because I couldn’t relax almost put me in whiplash. There was a bartering arrangement with a hair stylist who kept putting me last in line and turned my 1 hour lunches into 2 hour lunches, then needing to go to my regular barber to get the work cleaned up.

    I have opted to pay from now on. Guaranteed service, professional, and reliable is worth every penny to me!

  • Matt

    I would prefer bartering with family, but some times family might be too busy to help with everything you need; so spreading out seems helpful, too. Only as a last resort.

  • Jarryd

    Bartering is a shifty thing for me. Stories of bartering I have heard have always been bad, but then again I haven’t heard all of them :).

    On another note:

    slew of them by Goolging the term

    should be

    slew of them by Googling the term

    Not being picky, just thought I should let you know! :P

  • http://www.avertua.com Alyssa Gregory

    @Jarryd Thanks for the catch! I’m guessing there won’t be a slew of results if you try search on Goolge. :-)

  • wildscribe

    I have done some bartering with friends. I am good at backend programming – PHP and MySQL – and I have worked with some designers on some portfolio projects. It can be a good way to keep busy if you don’t have any paying work, which is unfortunately becoming more frequent these days. I am not sure if I would barter someone who I did not know well. But as Alyssa points out, it is a good way to learn and expand your skillset and it could lead to a paid work in the future.

  • Colin Behr

    We recently bartered a website design for 10 limited edition prints by a fairly well known artist to go in our office, additionally he paid $1,500.
    In this instance it was really worth our while as his prints usually sell for $200-$400 a piece with his signature.

  • erika

    I Googled “Online barter” and went to the first site that popped up, http://www.tradeaway.com and its been very helpful so far. If you are truely into barter this site has it all. real estate, houses, boats, cars, services, beanie babies (haha) you name it! It works like how the author explained a ‘barter exchange’ works. You get “trade credits” Its definitly worth checking out if you are a serious barterer.

  • Koistya `Navin

    I am ready for barter with exceptional web designer ^_^ Feel free to contact me on this subject: navin@php.net

    http://www.riaguy.com

  • BobbyJones

    Thanks for this article, maybe we can use Bartering in this time of recession, at least there are no cash involve. It is important that you have a solid relationship to the person you are bartering services or products with. With my virtual friends on World of Warcraft, hopefully we can meet up and barter wow gold in exchange of something in the future. :)

  • bello123

    if you are new to bartering, check out this website: http://www.favorpals.com. it is a site that is solely devoted to the bartering of services and thus all people with different skills can participate. there are no ads and it’s free. take a look at it, it’s worth it.