Tough economic times inspire avid U.S. bartering network
America's economy is best known for its ultra-capitalist ways, but local bartering between tradesmen is as trendy today as ever.
Tue, Mar 29 2011 at 3:21 AM
STEPS TO SUCCESS: "Anything a business owner spends money on is something they can barter," says the head of one barter group. (Photo: diane555/iStockphoto)
CAPE COD, Mass. — Shellfishermen tending shallow pools of salt water here know the seafood delicacy in their nets can fetch top dollar at swanky restaurants a few hundred miles away in New York City.
But Cape Cod oysterman Jon Martin enjoys a more personal way of profiting from the briny crop in his boat.
In a kind of commerce as old as fishing itself, Martin recently bartered hundreds of the tasty crustaceans to a local carpenter in exchange for work on his house.
"I needed some carpentry done and he likes oysters, so it kind of worked out," said 38-year-old Martin. He swapped some 500 oysters, worth about a dollar each, for the carpentry work.
No money changed hands, and for that very reason, both men say they were happy with the deal.
While America's economy may best be known for its ultra-capitalist ways, such local bartering between tradesmen is as trendy today as ever.
It might even be more popular, given the multitude of organized groups breathing life into a systemized economy of bartering across the United States in recent years.
"Anything a business owner spends money on is something they can barter," says Ken Meharg, head of New England Trade, a barter group with more than 1,000 members, the majority of them small businesses.
NET, set up in 1980, oversees a system of "barter dollars" exchanged between its members.
Imagine a landscaping company that mows the lawn of a health club. The landscaper then eats at a nearby restaurant, whose owner gets a health club membership.
It's all paid for in barter dollars. "It's a barter currency," said Meharg, whose East Coast group is linked with dozens of other regional barter groups across the United States.
He says NET oversaw the exchange of about $11 million in 2009, which rose to more than $12 million last year — a 9 percent increase — and is due to go up again in 2012.
Such activity might imply the emergence of a parallel economy.
But the traditional characteristics of capitalism are in full play.
In addition to a $295 membership fee, Meharg's group skims 7.5 percent from all transactions involving barter dollars.
There's also no tax advantage. U.S. law sees barter revenue as income, and members of barter groups are required to claim it so.
Such factors haven't dissuaded membership in barter groups though — particularly as cash-strapped businesses struggle to stay afloat in the ailing U.S. market.
"The economy now is playing right into our hands," said Meharg. "If a businessman can trade his goods and services to put a new roof on his building instead of writing a check, there's a lot of advantages."
Cape Cod Trade, a subsidiary of NET signed its 200th member last month and an average of $2 million in bartering occurs amongst the members annually, according to Larry Conn, who heads the group.
"The nice thing about an organized format," said Conn, "is that it gives you an entire marketplace to trade in."
That's appealing to business owners like Peter Troutman, whose restaurant Scargo Cafe does about three percent of its business through the barter group.
In addition to having the carpets and kitchen equipment cleaned, Troutman said he's even bartered for tickets to a recreational paint ball facility as a perk for his staff.
On the community level, however, most craftsmen say they barter purely for the satisfaction of doing business on their own terms.
"I enjoy being outside of the traditional system, the Fiat money currency," said Josh Blakely, the carpenter who accepted oysters for man-hours.
"If I can skirt around that, I'm a lot happier sharing what I can do with other people in the community."
Small barters are common in his trade, Blakely said. "When we barter, everybody feels like they're getting a deal."
Of course, the notion of getting a deal through bartering has long captured the North American imagination and sometimes even created legendary results.
A Canadian man made headlines in 2006 when he harnessed the power of an Internet list serve to barter a red paper clip for a fish-shaped pen, then bartered the pen, and so on, until he ended up with a two-story farmhouse.
But common barterers warn the practice comes with a risk, and the craving to "get a deal" can turn a trade sour.
"You tend to remember the bad easier than the good," said Jordan Pike, 33, an organic farmer in Maine, who occasionally barters goods for labor on his farm.
Pike once bartered 300 bales of hay for 105 hours of labor from a vegetable picker.
"When you barter for labor instead of paying cash, a worker has a tendency to work three and half hours and then stop and say, 'oh, well, we'll just call it four hours,'" he said.
"Eventually it got so bad I wanted to fire the person, but I couldn't because I'd already delivered all this hay and I still needed help picking peppers."
"I should have just let it go," added Pike, "because the person eventually claimed I owed them money for extra hours they'd worked on top of what I'd bartered for."
Copyright 2011 AFP American Edition