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Wednesday, 5 October 2016

Why you should not do trade by barter as a business man or woman

Why you should not do trade by batter as a business man or womanThere are several reasons why we as human beings and business entrepreneurs should not be involved trade by barter as means of trading.
  1. The difficulty of double coincidence of wants: that is, before exchange can take place, one has to look for some body who wants his commodity and at the same time must have what he wants at that material time
  2. It wastes time and energy: this is because ,a person may use all his time going about in the market looking for some one who has what he wants and at the same time needs what he has  
  3. Difficulty in assessing the value of commodities: for example , it is difficult to determine how many tubers of yam will be equal to a basin of garri
  4. It does not encourage large quantity and variety purchases: This is as a result of the problem of assessment and the fact that one find it even difficult in establishing double coincidence of wants for a single commodity not to talk of many commodities.
  5. Exchange becomes uninteresting and unexciting: when one considers the ordeal one has to undergo in order to exchange ones goods and services with others, the interest and excitement one has for the exchange will disappear.
  6. It does not encourage deferred payment: deferred payments is a system whereby one buys a commodity and pays in future. under trade by barter, this is not possible because the goods used for exchange are not durable
  7. It does not encourage instrumental payments: this is as a result of the difficulty is assessing the value and non durability of the commodities used for exchange
  8. It does not encourage Division of labour: people were forced to become jack of all traders and masters of none because everybody tired to produce all his needs in other not to taste the bitter experiences of trade by barter
  9. There is no lending and borrowing: this is a result of the fact that under the system of trade by barter , there is no generally accepted commodity for lending and borrowing
  10. It discourages large scale scale production: this was caused by the fact that people lost interest in the system of exchange and therefore, resorted to producing goods and services for the satisfaction of their own wants and that of their families only
  11. Miscellaneous problems: these difficulties include the non durability, portability, divisibility, homogeneity, organization etc of the commodities that were used in exchange under trade by barter
CONCLUSION
Trade by barter is only ideal for direct exchange of goods for goods and services for services

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