Trade & Barter

Trade and Barter

There are at least three levels of trading. Each has increasing complexity and thus requires increased trading skill.

The first and simplest level of trading is giving away something you don't want for something you do want. This level of trading only considers the relative value of the item you are trading. Relative to you, the item you're trading has minimal value, since it is something you no longer want. This can be beneficial because you're getting something you do want, and it skips the step of having to sell, give away, or throw away what you don't want. This is a simple trade, your item for their item.

The second level of trading involves cash exchanges. In other words, you sell the item you don't want and buy the item you do want. This involves more parties and bartering to make sure you receive the amount money that you need in order to buy what you want.

For example, I wanted to completely refurnish my apartment. I had two couches, a small entertainment center, 2 sets of stereo speakers, a small media center, a mini-fridge, 2 TVs, a microwave, and a new set of Corningware Dishes. Each of these items was either collected while in high school or received as a wedding gift. I sold all of these items on Craigslist in separate transactions for $335 collectively.

By finding deals on Craigslist I was able to buy a flat screen TV, nicer stereo speakers, a bigger entertainment center and an L-shaped sectional couch all for $325. This price even included paying people for their moving services since I didn't have a truck. That means I was indirectly able to trade all of my unwanted items, for items that I did want, and I even made $10. All of the items I received were better, nicer, more functional and/or more suitable for me than the items I sold.

The third level of trading involves the absolute value of the item you're trading and the attempt to increase it. To a degree, third-level trading can take advantage of first-lever traders who are only considering the relative value. The absolute value is the highest possible value for which the item can be sold in a general market. When you up-trade your item for one that has a higher absolute value (regardless of whether you want to use the item or not), you are increasing your trading power. By doing this you can keep up-trading and up-trading until until you finally get the item you want.

The third level of trading is the true way to trade for freebies. The first two levels are free in that they can save a lot of time and money, but the absolute value of the item you're trading stays about the same, and the new item is received through an item you already had in the first place. The third-level trade is an increase.

One of the best examples of third-level trading ever was spotted in the news. A 17-year-old high school student made a series of trades on Craigslist starting with a cell phone, and he eventually received a Porsche Boxter Convertable Sports Car. He made 14 trades in a period of two years. He states time and patience are requirements for accomplishing these types of trades.

Teen up-trades cell phone for a Porsche: NBC LA, ABC 7, The Huffingtn Post.

Once you understand the three levels of trading you'll notice that other forms of trading are hybrids of these three levels. My example of refurnishing my apartment was actually a hybrid of levels two and three because I had an increase of $10. However, I was partially considering the relative value of what I was trading and what I finished with, so theoretically my trades could have ended with a lower absolute value. The main thing is that I got what I wanted without spending any extra money, which saved my budget.

Trading can also be a way to get to give you more options when you've agreed to a financial commitment. You can avoid paying more fees by trading a cell phone contract or a car lease.

Trade and Barter Resources Directory

General trading sites
Sites for trading in specific categories
Find people in your local area to trade with
Trade your cell phone contract, get out of a contract for free
Trade your car lease, avoid more payments
Trade movies, books, music, video games, toys, clothes and more!

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