The term trading and bartering seems ancient. One might think of cavemen trading shells or Indians trading beaded jewelry but what some people don’t realize is that it’s very common today even with the biggest corporations. Take Facebook and Google for example. They offer what seems to be a free service, but actually they are just trading that service for information.
The idea is to create value for somebody else through a service or product. Then that value is traded for other value from another party. Through this basic concept of exchanges in the market, economies will thrive. In fact I have traded a service in this very blog post. In exchange for coverage of my blog I have promised another I would mention him in one of my blogs. I can’t think of a better blog post to mention him in then the one I could use him as an example. (Thanks Tim it’s nice to work with like-minded people)
I met Tim through a bartering service called Simbi. Simbi is a place where you can trade a product or service for another product or service. They also have their own credit system they use Called Simbi’s. The information on my website to the particular services I offer are here. I have had somebody come and clean my house, come and trim my dogs nails, and cut down some metal shelves for me and more, through services on Simbi. In exchange I have done things from critiquing resumes to helping people move.
Trading and bartering seems to be becoming more and more common as more people struggle trying to fill the holes in their finances. I have had family members who had their automobile professionally painted through an exchange of another service. Also people are starting to sell more and more items online through services like Craigslist or the Facebook market in addition to services like eBay.
I want to talk a little about the purchaser and vender relationship. Services like Simbi and The Facebook market bring an aspect to buying and selling things that is missing from our society today. Because we use money for an exchange of goods and services the transaction is impersonal. This is because it’s quick and there is rarely a long-term relationship developed between purchasers and vendors.
W. Edwards Deming (who I have talked about in the past) says this about purchasing:
“economists teach the world that competition in the marketplace gives everyone the best deal. This may have been so in the days gone by, when the baker had his customers, the Taylor his, the cheese-maker his, and so forth. In those days, it was fairly easy to make an intelligent purchase.
It is different today. The price tag is still easy to read, but an understanding of quality requires education.
The purchasing department must change its focus from lowest initial cost of material purchased to lowest total cost. This means education in purchasing. It is also necessary to learn that specifications of incoming materials do not tell the whole story about performance. What problems does the material and counter in production?”
If you plan on managing ANYTHING Out of the Crisis by Deming is a must read.
He also explains why it is so important to have a strong relationship between supplier buyer. He says it is important with continuing delivery of material. Although your vendor might have a higher price than their competitor, over time you will pay less. This is true even if you were to buy at the lowest cost from another vendor.
Ultimately, the greatest value of any transaction is the relationship between the two parties. The cooperation of the two will create long-term quality both will benefit from and become prosperous.