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Weekend Edition Saturday, December 20, 2008 · The economic slowdown has meant that many businesses are having to get creative to stay afloat. And an increasing number are turning to a mode of trade that's ancient: bartering.
Josh Gardner owns a Connecticut company called "The Jar Store" that distributes glassware and candle-making materials. He says he's seen a drop-off in sales since the economy worsened, and that a lot of his clients — small-time candle makers and specialty food providers who use his glass jars — have been going out of business.
That's when he heard about bartering.
"When I first heard it, I laughed," Gardner says. "I couldn't understand it that we had gone back to some archaic, literally pre-Babylonian exchange mechanism. I picture like two shepherds trading goats for cows in like northern Nepal."
Despite the fact that his business involves no livestock, Gardner was persuaded by his friend Debbie Lombardi to give bartering a try.
Lombardi owns Barter Business Unlimited, a barter exchange just down the road from Gardner's warehouse in Bristol, Conn. She's sort of like a business matchmaker — finding one client's service that meets another's needs.
Here's how it works: A company opens something akin to a bank account where it can build up bartering credits.
For instance, Lombardi says, if Gardner sells $5,000 worth of jars to a new client such as a florist, he wouldn't have to take flowers in return. Instead, he can take services from other companies in the exchange, such as payroll services, vehicle maintenance or Web site work.
That way, Gardner can cover some of his expenses without having to use any cash — something that he and others have found attractive amid a national credit crunch.
[Cygnus interrupts, saying "make that an InternationalFinancial Crunch, and see THIS link for an NPR-related story"...]
The International Reciprocal Trade Association, which tracks the barter industry, says barter transactions are up as much as 25 percent. While bartering is taxed the same way as cash, Lombardi says the recession is making converts out of people who had been skeptical about bartering to sustain their business.
"Time gets tight and your warehouse starts to fill up, or your guys aren't working and they're on the payroll — you know, you start to look for other alternatives," Lombardi says. "So our phones have been ringing off the hook."
She makes a commission on everything bought through Barter Business Unlimited. And she's seeing everything from restaurants turning to barter as a way to fill increasingly empty tables, to a surge in real estate listings.
"I've never seen this, and I've been doing this business 22 years," Lombardi says. "I have never seen someone come to me and say, 'I'll give you a million-dollar property and I'll take $500,000 down in barter.' Never happened."
There's another trend Lombardi is seeing for the first time: People such as dentists and other service providers sending their delinquent customers to her to see if there's something they can barter away in lieu of paying their bill in cash.
And when it's a choice between going into collection or making a trade — barter looks like a pretty appealing way to do business.
Tina Antolini reports from member station WFCR in Amherst, Mass.
Combine the two, folks. Global Economic Woes?
Just a thought...
Not a bad idea. I live in a rural area, and many people and small businesses have been doing that for a long time, but more so now. I guess it will increase as times get tougher.
Hi Lydia! good to see you.. Always!
Just makes sense, I think. A way of helping neighbors and getting help in return.. works for me!
...is kinda cool,it all comes full circle huh ?...trading(bartering)has helped me in so many ways already,mostly trading 'labor',but there has been item for item trades too...although i frown on it getting taxed(in any manner)...but as a business,those folks are leaving a hell of a paper trail...for all involved...
Ken, thanks for popping over.
Yeah, I'm curious how they tax me whatever % on... what? I guess honest-enough folk are recording their barter somehow to allow for said.
Hey, whatever works. Still coming out ahead, I venture...
Thanks for stopping in and commenting, man!
You know C, that's one thing I love about people. If you leave them alone they will find a way to make things work, they will find a way to profit without a Bailout Bill or a stimulus package. Americans can and will survive because we are able to change if we need to, this is proof. Barter for goods is something that we have got away from in the last 50 or 60 years because we are trained that cash is king. Cash that is taxed before you get it, when you spend it and as income to the person or place it was spent. And then "King Cash" makes it's way around once again picking up taxes for the powers that be and it goes on and on and on. When I trade a qt. of beans that I raised and canned myself to a neighbor for whatever the system doesn't get their blood money on my transaction. That's is why we are taught to spend our money, so they can tax yet another for having it.
Sorry, got kinda long winded there, but you can see my point. Barter all you can with those you know, starve the beast !
Got your point indeed, Bullseye My Man!
I'm with you on the 'quiet' barter. Makes no sense, me logging somewhere we used my honey to sweeten our pancakes made from your flour, now do it?
Hubby and I barter a lot. If someone can give him wood (from a tree that is..ermm..ok...lol..)he will offer something he makes back in exchange.
We do this a lot at our local Pagan fest, last year we bartered for handmade soaps, mead, wine and even hot dogs! lol Why the hell not?
Interesting post hun! :)
Oh dearie, YOU GOT MEAD!!!??? I'm coming right over, girlfriend! I got a stein-- what, you think me lacking in manners?!?
:) Happy trading, Lady!
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