Barter

The decline in purchasing power has affected primarily small and medium-sized businesses. Numerous manufacturers were also hit. The number of goods in warehouses has grown significantly compared to previous periods. To compensate for the negative economic impact on business, a set of measures is needed, one of which can be barter.

 

Dabhorse invites manufacturers, whose stocks of finished products exceed the required storage volume, for cooperation on a barter basis. We will find for you an acceptable exchange option for a more liquid product or service and can act as a source of financing for logistics costs. Each manufacturer can pay for our services with their own products.

 

Such a measure will allow you to get rid of stock balances and buy a liquid product that can be sold in your territory in a short time.The barter type of transactions does not fully, but partially cope with this task.

Dabhorse has experience and knowledge of barter transactions and provides international barter services in Eastern Europe, Russia, Ukraine.

Advantages of barter transactions 

Barter is perfect for reducing excess inventory when the company is literally suffocating without new funding flows

Long-term fixed barter contracts help to avoid possible costs due to the inevitable increase in supplier prices

The establishment of closer relations with "barter" partners, compared with "money"

Types of barter transactions

 

a) Counter purchase. Organization A instructs organization B to sell the products produced by A and at the same time instructs it to purchase raw materials for its production with the proceeds;

 

b) Counter delivery. Organization A supplies organization B with equipment under a supply contract, while the latter supplies organization A with materials for the manufacture of equipment also under a supply contract;

 

c) Barter rent. Entity A leases equipment to entity B under a lease. Instead of rent, organization B pays with products manufactured on rented equipment (option: payment is made by repairing equipment in organization A);

 

d) Tolling (contract for the processing of raw materials supplied by the customer). Entity A supplies entity B with raw materials for processing and receives payment in the form of finished goods.

 

Balanced and unbalanced barter

 

Balanced barter is a non-currency transaction, i.e. counter deliveries equal in value. Unbalanced barter is a transaction where supplies differ, namely, the final settlement is carried out in the form of clearing, i.e. offset of mutual claims with securities, currency. Moreover, only the difference in the value of the goods is paid in currency.

 

Direct and indirect barter

 

a) direct barter - bilateral

 

b) indirect barter - multilateral

 

Direct barter is carried out within the framework of the “commodity for commodity” formula, in which case the transaction is bilateral and ends with the purchase by each counterparty of the commodity it needs.

In multilateral barter, the first transaction involves subsequent transactions with the participation of other economic entities. They continue until the moment when each of these subjects does not receive the goods he needs, which in the end will mean the end of the multilateral barter exchange.

 

True barter and value barter

 

True barter is barter where goods are simply exchanged without regard for their monetary value.

 

Value barter is a barter in which goods are exchanged in terms of their monetary value.

 

The main difference between these types of barter is that barter, both with and without valuation, is a single transaction in which the obligations of the parties are interrelated, dependent on each other, while in counterpurchase agreements there are always two contracts. There are two problems with priced barter agreements. The first of them consists in the disposal of goods received by the exporter from a foreign buyer. The second is the need to reach agreements on the settlement of the balance of payments, which is formed in favor of one of the parties to the barter transaction.

 

Pure (classic) barter

 

With pure barter, the movement of counter flows of goods occurs, as a rule, simultaneously, and their quantity is not affected by the change in price proportions in the world market. Net barter in international trade is extremely rare due to its applicability only for a limited set of homogeneous goods, mainly of raw material origin, and with a practical lack of freedom of maneuver.

 -It is worth complementing the positive features of barter transactions, which can be formulated as follows:

- the ability to continue trading operations even in the absence of funds;

- relative independence from credit institutions;

- great freedom in setting prices for products;

- mutual benefit of the parties.

 -Optimization of tax liabilities;

-Ability to exchange goods for a more liquid one;

-Increase in turnover;

- Maintaining the previous production volumes;

-Mutually beneficial cooperation between organizations of Eastern Europe, Russia, Ukraine in the exchange of finished products or services, will help to strengthen partners' business and commercial relations between companies and increase the efficiency and turnover of your enterprises!

So are the disadvantages of this economic system:

- Difficulties in the selection and ratio of goods during exchange, when the interests and requests of the interacting parties do not coincide;

- often you have to resort to additional exchange operations;

- products are not given at the best price.

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220015 Belarus Minsk Yanki Mavra 38

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