Disadvantages and Advantages of Barter System in Business Transactions
Barter system widely used in business day to day operation. According to Recent study survey, the using of this process companies exchange more than $80 billion transaction of goods. Companies preserve their resources and apply for growth of business. Although money is a well-shaped forms of transaction, but if you exchange something in respect of goods than this is called outer trader or barter system.
Simply barter means without using money or other source as a money for buying anything, just exchanging goods at both the ends. For example car exchanged for motorcycle, cat exchanged for dog and belt exchanged for pent so on. Still there are many companies who apply this formula in international market especially in stoke exchange.
Disadvantages and Advantages of Barter System
In depth study, there is some soft and harsh point during exchanging of goods at both ends. So you have to know better about these issues.
Here are some advantages mentioned below;
One think keep in mind, there is no money involved, so goods would be beneficial item at both of end.
There is no big bench involved in this process, so you will not hear storing the commodities.
In this process peoples utilized enough resources except artificial.
Some international trading or like Forex doesn’t include in barter system
Disadvantages of Barter System
The main problem in this system is that wherever any party doesn’t agree with any particular good replacement of their. For example I have a website, someone request me to add my content and I agree on this, after a while I notice that particular content is already in other site, so that’s could be a major problem.Either you worked as a professional project manager or business owner you have to knows about these business tricks efficiently.
Just more concentration required either online barter or offline barter exchanging
Every little description of goods will be described by you, so that required hassle and consume so much time.
Common medium issue must be persisting, for example you can’t calculate exact price of one car with 10 motorcycles or like these kind of exchanging.
The concept of “time due to physical deterioration” occurred in that way
chances of monetary value could be increase after a time of any goods rather than other, so what decision you made on this is up to you according to financial and market trend.
Although there are some mis-conception and confusion in barter system, but still many companies doing business through this way especially online industry you will seen example like mentioned above. Almost every website uses this system somehow in their business, although they don’t know exactly the mean of this. If there are some advantages of barter system exists, then you couldn’t forgot disadvantages.