Economic uncertainty revives interest in bartering

The current economic climate, which is seeing the effects of tariffs, cost increases and a slowing job market, is creating uncertainty for not only individuals, but also businesses of all sizes.

In a flush economy, cash is king. When things aren’t so rosy, people want to hang on to their dollars rather than spend them — and small businesses feel the pain. The most recent statistics from the Administrative Office of the U.S. Courts reveal that business bankruptcy filings increased 14.7% between March 2024 and March 2025.

In such an atmosphere, when businesses (and individuals) have to stretch every dollar, bartering can be a strategic tool for saving cash while acquiring necessary resources without spending capital.

Many different products and services have been bartered in history like fresh eggs from backyard chickens or homegrown produce.

Advertising, public relations, website development and social media curation are popular in barter. In addition, people offer and seek services such as child care, home repair, landscaping and computer repair, not to mention professional services of dentists, optometrists, CPA’s and attorneys. Restaurants and hotels often are interested in barter to fill empty tables and guest rooms with customers they may not otherwise attract.

In this digital age, it’s possible to find bartering partners across the city or across the country. Through third-party barter exchanges — where members pay a commission for goods or services traded — more complex trades are possible. These digital capabilities are one of the factors that are driving the resurgence in bartering.

Here’s how a barter exchange works:

A business lists a product or service for trade through a barter exchange, most of which operate regionally. When someone barters for those goods and services, the business receives a trade credit, or “barter dollars,” based on the dollar value of the good or service offered. It can then use those trade credits to “purchase” goods or services offered by other members.

As a result, small and sole proprietorship businesses, as well as large corporations, can use these channels to market to new customers and build a valuable network. The barter exchanges offer arbitration in the case of a dispute, and they keep track of the bookkeeping and the transactions must be reported to the IRS. Barter is a marketing and cash management tool, not a tax tool.

Bartering turns your downtime or excess inventory into valuable commodities, but it shouldn’t form the basis of a business. Barter should only be 3% to 5% of a business’s annual revenue; therefore, a business owner shouldn’t spend more than a couple of hours a week on these ventures.

There are two more reasons to consider adding barter to your financial portfolio. They are less concrete but just as important.

Bartering encourages sustainability through the repurposing of goods and services, supporting the so-called “circular economy.” It also builds relationships and encourages collaboration among individuals and business owners who may not agree on anything else. Mutual respect and trust are building blocks not only of businesses, but of our entire economic system as well.

The role of the barter model is to create new sales to offset both business and personal expenditures, thus conserving cash. This is a necessity during these trying economic times, when preserving cash is a priority.

• John Strabley has been CEO of International Monetary Systems (IMS), one of the country’s leading third-party B2B barter exchanges, since 2011. Based in the Milwaukee area, IMS operates in more than 40 cities nationwide. Strabley is a Certified Trade Broker and was a 2023 inductee to the Barter Hall of Fame.