Costco Connection - June 2010

smallbusiness
Barter 2.0
An ancient idea
gets a modern twist

By Steven Van Yoder

COSTCO MEMBER Aaron Zarling, owner of King’s Mattress in Seattle, embraces an age-old strategy for making his idle inventory pro;table. With the help of BizXchange, a business barter exchange, he gains new customers and o;sets normal operating costs through bartering, trading mattresses for printing, advertising and employee incentives, all without spending cash.

“In this economy, cash business is harder
to come by, which is why barter is an excellent
tool for boosting pro;ts,” says Zarling. “Barter
helps us cover everyday business expenses
and helped us expand our business by barter-
ing half the costs of opening a new retail loca-
tion. We even bartered mattresses for a Smart
car we now use as our company vehicle.”
;e cashless trading of goods and ser-
vices is nothing new. During the current
recession, businesses are not only revisiting
the age-old practice as a means of keeping
a;oat, they are using barter to thrive by rein-
venting a practice as old as civilization itself.

According to the International Reciprocal
Trade Association (IRTA), barter is indeed
making a comeback. Last year, 400,000 IRTA
member companies worldwide used barter to
utilize their excess business capacities and
underperforming assets, earning an esti-
mated $10 billion in revenues. Moreover, bar-
ter is taking on new life via the Internet, and
through local barter currencies.

One-to-one trading

Direct, or one-to-one, trading is perhaps the most basic, straightforward manner of exchanging products and services. Quite simply, you ;nd a person or business that has something you want, work a deal and then exchange value for value.

If you are a dentist, for example, and need track lighting installed in your o;ce, you can reach for your checkbook—or you can tap your personal network, or even open the Yellow Pages, to locate an electrician willing to trade lighting for dental work.

“I’ve settled cash debts with trade, traded
for medical/dental services and helped a
friend build a house mostly on trade,” says
Monte Cook, a barter consultant in Seattle. “I
currently live rent-free in an oceanfront home
because of bartering. I caretake the property
in exchange for free rent. It doesn’t get much
better than that!”
Costco member Bert Martinez, a profes-
sional public speaker and trainer in Houston,
trades for everything from legal services to
travel expenses. “I recently conducted a sales
seminar for a large hotel chain in exchange for
hotel certi;cates I could use for hotel rooms
across the country,” says Martinez. “Bartering
helps us extract value from otherwise wasted
downtime, thereby boosting our pro;ts and
conserving cash.”
Increasingly, businesses are turning to the
Internet to ;nd trading partners through Web
sites such as Craigslist, where, as of July 2008,
an estimated 142,000 items were listed in bar-
ter sections across the U.S. Hundreds of Web
sites, including Swap; ing.com and Barter
Bucks Banc, help businesses connect online,
facilitating bartering across the country, and