I’ll Trade You

One of the best known instances of barter would have to be “My kingdom for a horse!”And depending on the economic state of Richard the III’s kingdom it would also have to be one of the most lopsided trades known!  In most cases barter is the exchange of equivalently valued goods and/or services and it’s a practice regularly used in non-cash economies throughout the world. 

In Naked Economics: Undressing the Dismal Science, Charles Wheelan says:

“In a basic agricultural society, it’s easy enough to swap five chickens for a new dress or to pay a schoolteacher with a goat and three sacks of rice. Barter works less well in a more advanced economy. The logistical challenges of using chickens to buy books on Amazon.com would be formidable.”

Regardless, barter has been making a comeback here in recession-stricken America. While Amazon.com is still not accepting chickens for books, some businesses are open to making trades.

Small businesses that want to save their cash reserves, or run into credit obstacles, are turning to bartering as a method to acquire not only goods and services, but new customers. And new businesses – barter and trade exchanges – are springing up to support this practice.  An internet search turns up several businesses that offer to link members and facilitate trades.  A middle-man that allows businesses to trade without having to search out a direct trading partner or work their way through triangular trades (you have a widget and want a gadget but the fellow with the gadget doesn’t want a widget…).  They do the matchmaking for you, for a fee.

A Business Week article on Barter Exchanges reports that according to the most recent numbers compiled by the National Association of Trade Exchanges (NATE), some 400 barter exchanges in the U.S. and Canada generate transactions worth $4 billion a year.

That level of bartering is probably over most of our heads, but if you have a small business and an interest in bartering you might want to check out this article on About.Com for information and resources and visit sites like The Barter Company.

For the rest of us times are tough, and cash is sometimes hard to come by but you still need that oil change, haircut, or babysitting while you attend an evening class and you may have something to trade for those services.  You may have even engaged in bartering without thinking of it as such, maybe it’s just an exchange of favors – like swapping babysitting services, or taking over car pool duty one week while the regular mom is on vacation, knowing that she’ll do the same for you when you are out of town. Bartering can be that informal or it can take a little more work. 

In an article on MSN Money titled “Bad economy is good for bartering” they report that posts for bartering on Craigslist are nearly double those of a year ago.  A stroll through our local Craigslist lists the following potential trades – web design skills for accommodation; ammo cans for CB radio; home improvements for car repairs; reiki healing services for dog grooming; and professional tattooing for wedding services.  You can see how hard it could be to find someone who has what you want and who is interested in what you have!  And that’s where the internet services – similar to the bartering exchanges for businesses – come in.  If you don’t want to track down someone willing to paint your house in exchange for guitar lessons you might want to sign up for one of these services (or google barter/trade sites- there are more than are listed here): TradeAway, large and small items – want to trade your boat for a horse? – you can do it here; SwapTree, a trading site for books, dvds, video games and music; UBarterExchange, an eclectic mix of goods and services (not a lot of listings when I checked); and U-Exchange, a home trading site.

As with anything, there’s a potential downside.  In addition to the time it takes to match up with a trading partner, the expense of shipping if your partner isn’t local, and the issue of personal safety when trading with strangers, bartering is supposed to be viewed (and I guess is by the IRS) as taxable income on both sides of the swap. As one blogger noted it “seems unfair because you’re not gaining income outright. Presumably, the “income” you’re supposed to report would be the depreciated value of whatever the item is that comes into your possession in the swap. How do you come up with that value? And unless you put the swap specifics into writing—or if there’s an e-trail via a barter site like Swaptree—how could any barter transaction be traced and quantified?”

Don’t have anything to trade?  Try Freecycle.org – an online community with groups throughout the U.S. where people give and get things for free.  Or if you just want to borrow that extension cord, or power saw, check out sites like NeighborGoods.net, currently limited to the Los Angeles area, which is an online social network where people lend and borrow stuff they own but hardly ever use. As readers pointed out to me Wikipedia also offers a listing of tool lending libraries but because they are limited in number (and some have closed due to budget problems) you may find it hard to locate one that is close to you.  In that case, reawaken that spirit of neighborliness, grab a plate of fresh baked cookies and walk next door and see if your neighbor has what you need!