Shake On It: Bartering booms during tough economic times

In these tough economic times, more Americans are bartering goods and services. In fact, barter postings on Craigslist have tripled in the last 24 months, according to Craigslist spokesman Doug Kohl.

If you need work done around your house—be it landscaping, painting, or carpentry—and have a service or product to offer in exchange, bartering might be a good way to save yourself some money and/or get rid of goods you no longer need or use.

New bartering sites have popped up, including the Hudson Barter Exchange (HBX), covered in this recent WCBS Newsradio 880 report. The exchange hopes to make bartering goods and services easier and more flexible for individuals and businesses in the New York City suburbs.

"We're passionate about what we're doing because we're helping small businesses conserve cash, sell their extra capacity, and get incremental business in these tough times," says Kevin Brown, cofounder of the Elmsford, New York-based exchange.

The exchange currently has more than 170 small- and midsized businesses and service providers, with plumbers, lawyers, printers, and massage therapists among its members. Members log on, see what services are available, and agree to perform them in exchange for trade credits that they can redeem with any other member. (The screen shot from the site shows the page of a landscaper who's a member.)

So a plumber who fixes a leak for a dentist can swap services with that doctor. But if the plumber has excellent dental insurance and doesn't need to swap with the dentist, he can instead barter with another exchange member to, for example, mow his lawn or handle legal matters. "Everybody works at their customary price; if a massage therapist normally charges $90 for a massage, that's the barter value," Brown notes. "This helps businesses avoid the common problem of undervaluing their services in a one-on-one barter exchange."

But the main benefit, Brown feels, is the chance for members to convert exchange clients into cash-paying ones and tap into new territories. "We introduce you to firms that you're probably not doing business with," he says. "A landscaper, for example, is not going to get a call from six towns away, but if he does an exchange job in a dentist in that area, people will see his truck and might use him for cash-based business." (Use our resources to find and vet a contractor and read our post on Sears' ServiceLive contractor-referral service.)

HBX members can also offer unused new merchandise for exchange. "Some of the lawn-care places can trade some fertilizer they won't be using this season for advertising or printing services they will need when they get busy again in the spring," Brown says.

The Hudson Barter Exchange charges a $295 membership fee, a 7 percent transaction fee on all sales and purchases and a $38 monthly administration fee (half in cash, half in barter credits). In return, members benefit from the site's marketing efforts, including promotions via e-mail and fax and networking events. Eighty members attended a September 15 networking event at a restaurant. "They were very enthusiastic about meeting like-minded people they could sell to," Brown says.—Gian Trotta | e-mail | Twitter | Forums | Facebook

Essential information: Visit the International Reciprocal Trade Association Web site to find or form an exchange in your area. Learn more about selling, buying, or swapping goods on Craigslist and make your garage or yard sale a successful, lucrative one.

Comments

[Doug]

It would have been nice if you had pointed out that even though you may barter your service to someone, you still have to report the value of it on your income tax. If, for example, you barter your plumbing skills for a dental visit, both the plumber and the dentist must report that value on their income taxes as if they had received "normal" payment.

[Janet]

My daughter and I were having an estate sale a few weeks ago when a fashionable young lady came by. She was interested in a cabinet that was over her price range yet I wanted off my hands. After chatting a bit we discovered that she wanted the cabinet for her new hair salon. We came to an agreement, a trade of her service for the cabinet. My daughter and I both received a very nice hair treatment and she received a great cabinet that was um...finally out of our hair...
The variables worked for us in this instance so we went with it. I think bartering is a great idea. It requires a bit of "thinking outside the box" so it doesn't work for everyone, the key is fairness on both sides so that the two parties get what they want or need.