Bartering: The 6 Outstanding Benefits & 5 Reasons of Concern

Pros and Cons of Bartering

Historically, bartering has been around since ancient times. Before the use of currency, people could only purchase goods and services through barter trade. However, does it still work for small businesses today? A barter system involves exchanging goods and services without involving cash transactions. One company gives up ownership of goods and services to another and receives other goods or services in return. In exchange for doing their social media plan, a website design startup could offer their services to a digital marketing agency. On domestic and international markets, it is now widely practiced. Moreover, thanks to the Internet’s prosperity, companies can trade more efficiently, making low-value transactions profitable by reducing management costs and facilitating supply and demand matching. There are some advantages and disadvantages to consider before making a deal when it comes to barter trade despite all that. You don’t know how bartering works? Let us explain it to you in our article “The Future of Currency: Barter vs Currency System“.

Advantages of Barter Trade

Bartering offers managers and business owners several advantages.


The options for bartering for business are limited! They can barter one related product for another, two completely different products or even services instead of just material goods.

With barter, you can get anything you want!

Saves Cash

Businesses benefit from barter trade because they get what they want or need without spending a penny. It allows small businesses to keep considerable amounts of cash on reserve, which is important for new businesses.

Keeps It Simple

Barter trade is a simpler system than international trade and modern monetary systems such as adverse balances of payments and foreign exchange crises, making it more suitable for international trade.

Build a strong network of working relationships and expand your customer base

In order to maintain cash-paying clients, barter exchanges are valuable tools for small businesses.

In time, customers would refer themselves to others or become full-fledged cash business arrangements because both parties would have developed trust.

No Overexploitation of Natural Resources

Natural and personal resources are produced perfectly in a barter ecosystem to meet exchange needs without wasting anything.

There is No Concentration of Economic Power

As commodities cannot be stored, the extreme concentration of wealth is not concentrated at one place in the barter system.

In our article “What is corporate barter?” you can learn more about barter for business.

Disadvantages of Barter Trade

As we have seen above, barter trade has immediate benefits, but also certain disadvantages.

A lack of a Common Measure of Value

As there is no way to determine a precise value for a commodity in a barter system, the trade rates for a commodity will be as diverse as the types and qualities of goods it can be exchanged for.

Divisibility Problems

When goods and services aren’t equal, it can be difficult to ensure that both parties exchange value fairly. If one party feels that their offering is more valuable than the other, problems may arise.

There is No Double Coincidence of Wants

The act of bartering occurs when two parties desire the exchange of commodities that are mutually needed by each other. Therefore, without such coincidences of wants, bartering cannot take place.

Even in the case of companies agreeing to a future exchange, companies should still be cautious since a lot could change in a couple of months.

The Necessity of Cash

Companies need a steady flow of cash to stay afloat. Employees, suppliers, and especially government tax collectors expect monetary payments from companies. So businesses can not rely on Your business can’t rely on too much bartering.

Transportation problem

With a barter system, goods and services cannot be transported easily. There is still a need to spend money in order to remove transportation risks and inconveniences.


Conclusively, the bartering method can work in multiple situations, and businesses only need to weigh the pros and cons before agreeing and always consider the win-win scenario.

If you are convinced in trying barter trade, Obodo is an online marketplace where individuals, freelancers and business owners can trade what they do or have, using both cash and barter. Using over price and a cash versus barter ratio, our members can always make the best deals by bartering and haggling with one another. Find out how to get started by getting in touch with us.


Obodo is a barter trade and buy-and-sell platform with a range of product listings. It connects sellers, traders, and buyers to help them list products for sale, find matches for barter trades and more. What are you waiting for? Download our app today!