E-Commerce: Bartering Becoming More and More Common

Got some time to spare? Trade a few hours of your IT expertise for an Argentine Tango social dance lesson or a custom-made pistol and rifle case. According to The International Reciprocal Trade Association, a Chicago-based group that promotes barter, the barter business is on the rise, with 1.2 million businesses expected to swap goods and services in North America within a decade. That’s four times the 300,000 companies that barter goods and services today.

Online barter companies, which have emerged in recent years, can take some credit for this boost. Take All Business Barter, the online barter company backed by American Express. The San Francisco-based company claims 75,000 members. “Barter is the oldest business in the world,” says Bippy Siegal, CEO of All Business Barter. “It used to be that if you wanted to participate in barter, you needed to be part of a local exchange or hook up with a broker. But the Internet creates an instant catalog.” Other barter sites include Isolve.com and Targetbarter.com.

Companies and individuals post goods and services online, attributing a specific “trade dollar” amount to them (one U.S. dollar is equivalent to one trade dollar). Once a sale is made, barter companies take a percentage and credit the seller with trade dollars, which must be re-deemed on the site. Then the barter company simply subtracts the appropriate trade dollars from the seller’s account when he purchases something.

Companies barter largely to save cash, says Siegal, who anticipates that the economic downturn will bring new customers. Other reasons to barter include acquiring new customers and obtaining hard-to-find items (for example, custom-flavored gum and interactive clock repair books, both All Business Barter items up for grabs). Moin Ghatala, CEO and owner of the San Fran-cisco-based computer and software sales company A&M Computers, used All Business Barter’s services to move five laser printers that had been collecting dust in the company warehouse for six months. He posted the printers on the All Business Barter website and sold all of them in less than a week. He’s used his trade dollars for restaurant vouchers and toner cartridges, with some cash left to spend on the site.