Nearly every business has something unique — and many don’t realize it.

You have your own currency.

That currency is not a coin or a bill — it’s your goods and services.

More specifically, it’s the arbitrage between what it costs you to produce your goods or services and what your customers pay for them. That gross profit margin has value, which I’ll explain more below.

But first, let’s cut to the chase.

Here’s how you can potentially save 50% or more on goods and services.

Barter.

Yes — the oldest form of trade.

If your business needs a good or service, consider bartering for it instead of paying cash.

For example, let’s say you want a new website designed or you want to buy advertising that normally costs $1,000.

Offer the provider a barter deal.

You give them $1,000 worth of your goods or services, and in return they provide the $1,000 service.

You pay $0 in cash.

Now, even though you paid $0, this doesn’t mean it cost you nothing — because you are giving $1,000 of retail value of your goods or services.

But that’s the key — it’s retail value, which is typically much higher than your cost.

Using rough numbers, many businesses operate with a 50% gross profit margin.

For example:

• A business buys or makes a product for $10
  
• It sells that product for $20
  
  

That extra $10 is gross profit (not to be confused with net profit).

This margin creates the arbitrage that makes barter valuable. In this example, trading your $20 product only costs you $10, which effectively gives you a 50% discount on the goods or services you receive.

The savings can be even greater for service businesses, where the cost may primarily be time and opportunity cost rather than physical materials.

With one of my businesses, we bartered tens of thousands of dollars in value — fitness memberships, rounds of golf, massages, restaurant meals, and more.

Bartering is an advantage that smaller, local businesses have over larger businesses that have no flexibility in how they do business.

A few notes

• You don’t have to barter 100% of a deal. Many agreements include a combination of cash and barter.
  
  
• Barter works best when it can be fulfilled with gift cards, passes, or certificates, so the other party can use them without needing to “ask” each time.
  
  
• While this post focuses on business-to-business barter, anyone can propose a barter deal.
  
  
• Be careful with taxes. Barter transactions are generally considered taxable income, and HST may apply. If both parties are businesses, the HST may offset through input tax credits (ITCs) — but it’s wise to confirm the details with your accountant.