What does an online barter system really means? This denotes the improved way of exchanging goods using online methods. Bartering is growing in popularity today with consumers and businesses realizing that it’s a great way to budget and a creative way to lower expenses. It certainly isn’t something new; bartering has been around for a very long time. It’s the way our ancestors conducted their daily business and how they survived.
Bartering is an economical and clever way to save money. We didn’t really have a choice but to barter when we were children, we didn’t have the money to buy new things all the time. Children certainly have a way of figuring things out when they want something badly enough. So why does this stop when we become adults? We still have wants and needs but seem to set them aside or continue to spend money when we really don’t have to.
By educating ourselves on the right way to barter, we open ourselves up to many resources and possibilities. It’s a way of taking care of our needs and at the same time, someone else’s without spending money. This is done simply by offering our professional services or items we no longer need, in return for what we do.
Don’t you think of the possibilities of an online barter system to be more effective in the near future?
Let’s have a look at the major pros on bartering:
Bartering system provides greater flexibility for the products involved. You can trade one related product for another, such as a laptop for a portable tablet, or two completely different items, like a television for a lawnmower.
- Possibilities for saving money
Barter offers the clear advantage of saving money. Not only do you get something you need or want, but neither party has to spend a cent.
- Simple system
The process offers a simple system free from the complex problems of the modern monetary system. Hence making the trade quite easier.
- No wastage or Payment error occur
The problems of international trade, like foreign exchange crisis and adverse balance of payments, do not exist in the barter system. Personal and natural resources are perfectly utilized to meet the requirements of society without involving any wastage.
There were no acceptable means of payment for the direct purchase of goods and services in the barter economy. In other words, in a pure barter system, there was no generally acceptable medium of exchange in the form of a particular good or asset which could be used to buy goods and services and do other types of transactions.
Hence some challenges or difficulties faced in barter system are,
- Double Coincidence of Wants:
Owing to lack of generally acceptable medium of exchange, a difficult problem of double coincidence of wants was faced by the persons who wanted to sell and buy goods. For exchange of goods persons desiring to exchange goods must specifically want those goods what others offer in exchange. Thus, an individual who wants to have a good he must locate another person who offers to give up the good wanted by him and who is willing to accept in exchange the good offered by him. Thus, under the barter system only when wants for buying and selling goods of different persons coincided the exchange of goods as possible. A good deal of time was spent by a person is searching for a man with whom wants to coincide.
- Lack of a Standard Unit of Account:
A barter economy lacked not only a common medium of exchange but also a standard unit of account in which prices could be measured and quoted. In the absence of a common unit of account, the number of exchange ratios (that is, prices of goods expressed in terms of each other) between goods would be very large. Thus, lack of a standard unit of account with which to measure values of different goods and services made exchange or trade difficult.
- The impossibility of Subdivision of Goods:
Another problem faced under the barter system for the exchange of goods was the impossibility of subdivision of goods without loss of their value. For instance, if a person has a cow and wants to have 5 kg of wheat, obviously, it is too costly to give one cow for 5 kg of wheat he requires.
Then, to do this transaction cow has to be divided. But the cow cannot be divided or cut into pieces because the cow will lose much of its value if it is divided. Thus, the impossibility of division of goods for the purpose of exchange posed a great difficulty and obstructed the growth of trade.
- Lack of Information:
Another problem found in the barter system was that in it traders required a good deal of information for exchange of goods. Thus, if there exists a medium of exchange, with well-known characteristics, it will reduce the information costs of trading. Without the medium of exchange, information cost will indeed be very large.
- Production of Large and Very Costly Goods not Feasible:
Another problem of barter economy relates to the production of large, costly goods. Suppose an individual who has technical skill and equipment to manufacture a car will not have much incentive to manufacture it in the barter economy.
This is because he can exchange a car with a person who has enough goods having a value equal to a car so that their exchange with a car can take place. The carmaker must obtain food, clothing and several other commodities of day-to-day consumption in exchange for a car. It will be very difficult, almost impossible to find a prospective buyer who has enough of these goods and services to give in return for a car.
It is evident from above that the barter system could work in a primitive economy where life was simple and the man was self-sufficient. As the man made some economic progress, the division of labor or specialization and large-scale production came to exist, the barter system could not fulfill the increasing needs for the exchange of goods.
What about considering a mixed model for solving the difficulties mentioned above. Let’s check software platform that contains all features and functionality necessary for you to launch a professional barter exchange network website.
iScripts eSwap is a bartering system allows you to create your own swap meet website where users can easily buy, sell and swap items. .
You can find numerous features of iScripts eSwap which helps you to find it the best option for continuing your business establishments.
For more information or questions related to how you can take advantage of the platform, contact us at (312) 423-6728 or email to email@example.com
We’d be happy to explain how our software works, including any additional business, needs you may have. We also offer custom development of web and mobile apps at a reasonable rate.