Bartering is big business these days. Everybody’s buzzing about it. The New York Times did a story. Good Morning America had a special segment on it. I’ve also done several television appearances explaining how bartering works and how it can help you manage your cash flow. Click here to see one of the more recent programs on Fox 2, KTVI.
It makes sense that bartering would increase in popularity during an economic downturn. Small businesses everywhere are feeling the impact of the slow economy. But I’ve been talking about the benefits of bartering for small businesses for years. Why? First, because I understand how strapped small businesses are when they are getting started and barter arrangements can be an excellent way of getting goods and services without shelling out money or going into debt.
But also, when I was growing up, I saw people barter with my family’s business (a funeral home) to pay for our services. We got everything from a side of beef, to carpentry work, to a pick-up truck. Yes, the 1971 Ford pick-up – three on the column, no power-steering, no radio, no add-ons at all – now sits in my garage. I keep it because it’s the car I learned to drive with and it holds a lot of fun teenage memories.
The barter system has been flourishing in this country for centuries, but it has seen an uplift in activity since about 1982. It’s currently one of the fastest-growing economic segments. Last year, approximately $18 billion dollars in goods and services were bartered. The International Reciprocal Trade Association estimates about two-thirds of the companies listed on the New York Stock Exchange do more than $14 billion in barter annually. It clearly is big business.
Bartering can take place informally, much like what occurred in my family’s business. However, there are more structured ways to barter for goods and services through barter clubs or exchanges. These organizations allow individuals and companies to exchange goods and services for barter credits that can be cashed in for a particular item or service. For example, a dentist does work for a lawyer, both of whom are members of the same exchange club. The dentist earns barter credits which are deposited in his/her account for doing the work. The dentist can then use those credits to purchase new office equipment or advertising space in a magazine. Some barter exchanges have brick and mortar stores where members can shop for the items they wish to purchase with their barter credits.
Bartering has also exploded on the Internet. There are quite a few online sites for bartering deals only. One of the most popular sites is SwapTree. SwapTree operates much like eBay except of course no money is involved. Here is the site’s description: Swaptree is a new and innovative way for people to easily trade the books, cds, dvds and video games they are finished with, for the ones they want, all for free. With swaptree, your collections stop gathering dust and can be used to acquire other items you want. By offering to trade a single item, you can choose from thousands of books, dvds, cds, and video games that you can receive in exchange. Best part: everything is free, you only pay shipping.
Another popular site is Tradeaway. According to information on its site, Tradeaway provides the means for a business/person to acquire goods or services through a medium where cash is not a requirement for a transaction to take place. Now, items such as raw land and luxury condominiums can quickly trade hands through the patent pending innovations of Tradeaway. Believe it or not, you can even find livestock on the site.
So the next time you’re worried about how you can get that new printer or find someone to design your new logo, look for barter opportunities. Personally, I’m searching for a shoe store who wants to trade shoes for advertising on SBTV.com. Okay – my male partners probably won’t like that idea too much. But who knows, they might look cute in stilettos.
