Doug MacAskill, who owns a fence installation business in Pembroke, says he has as bartered his services for a generator, a Jet Ski, two dirt bikes, a 16-foot boat, a pool table, a chainsaw, a couple of go-karts and a used BMW.
When sales at Doug MacAskill’s fence installation business in Pembroke started to slow down a year ago, a buddy suggested he create an online ad offering to exchange his labor in return for goods instead of money.
MacAskill had been hoping to pick up a motorized dirt bike that his kids could use. He picked up the bike – and a whole lot more.
During the past year, MacAskill has bartered his services for a generator, a Jet Ski, two dirt bikes, a 16-foot boat, a pool table, a chainsaw, a couple of go-karts, a used BMW, a week’s stay in a cabin in the White Mountains, and a season’s worth of fresh vegetables for his family.
He said the bartering helped him build business connections. He also found that it was much easier for people to hire him if they didn’t actually have to write a check.
“People don’t want to make a withdrawal from their bank account,” he said.
Amid the current recession, bartering is booming as businesses and individuals look for ways to cut costs by dealing in goods and services instead of cash.
Ron Whitney, executive director of the International Reciprocal Trade Association, said members of his association – which consists of companies that facilitate bartering exchanges – have reported a 15 percent to 35 percent increase in bartering transactions last year compared with 2007.
Bob Meyer, publisher of the BarterNews trade magazine, said large bartering exchanges such as International Monetary Systems are reporting sales growth of at least 25 percent in the last quarter of 2008 compared with the third quarter.
One Massachusetts exchange has seen transactions surge by more than 30 percent. Ken Meharg, CEO of New England Trade in Malden, said his company’s trading volume rose to $8.5 million in goods and services in 2008, up from $6.5 million in 2007.
“When recession looms, barter booms,” said Meharg, whose company has more than 1,000 members from the North Shore to Cape Cod. “In a bad economy, for those that understand barter, it will help them weather the storm. Everybody is used to ‘cash is king’ but barter is the next best thing.”
Meharg said members in his company’s network use “trade dollars” to purchase services within the exchange’s network, and some give out bonuses – in “trade dollars” – to employees. For example, a car dealership member gave employees barter dollars, which could be used for services at a dentist in the exchange network, because the dealership didn’t offer dental insurance.
“I think business owners have to rethink, retool and get back to basics,” Meharg said. “Barter is certainly one of those basics.”
Bartering is taxable under federal law, and barter exchanges issue a 1099-B form on sales that their business makes through the exchange each year. The exchanges also charge a fee, which can vary from monthly or annual membership fees to a charge for each transaction.
Michael Zygiel, owner of Federal Telephone in Bridgewater, has been part of the International Monetary Systems exchange for five years, and has found it useful in a tough economic time. He said has a strong relationship with a broker at the exchange who helps him look for goods or services he may need.
Zygiel said a recent rebranding of his company – including a new logo, Web site, letterhead and business cards – would have cost him as much as $20,000 if he had to pay cash. Through using the barter system, he only had a cash outlay of about $500.
Zygiel was also able to use IMS to buy his daughter and her friends concert tickets and a limo ride for her 10th birthday.
“I never would have paid cash for that, but (with barter), I was able to do that for her, and she’ll remember that for the rest of her life,” Zygiel said. “Barter lets me be a lot more creative and a lot more generous than if I had to write a check for all the things that I want to do.”
Marie Goldman, owner of the Personal Best Salon in Pembroke, has used her barter dollars in the IMS network for a wide range of services, including: an answering service, carpet cleaning, theater tickets and restaurant certificates.
“There are just endless things I have done over the years that I wouldn’t have been able to do otherwise if I had to pay cash,” Goldman said.
Karen Price, the owner South Paws doggy day care in Pembroke, found savings through bartering without using a major exchange. When Price started her South paws in 2005, she didn’t have a lot of cash to spend on promoting her business. So she bartered with one of her clients for Web site design service in exchange for providing doggy day care for the client’s dogs.
The exchange worked out well, and Price explored other bartering opportunities. Wanting to add a professionally made video to her Web site, she put an online ad on Craigslist. “I asked if there were any budding Spielbergs out there and offered an exchange of pet products,” she said.
From nearly the 40 responses she received, Price found a local producer of training videos and, for $200 in cash and $200 worth of wholesale merchandise, was able to get the professional video she seeking – at far less than the $1,000 price she had been quoted elsewhere.
“I couldn’t have afforded it otherwise,” she said.
An accidental conversation at her dentist’s office led her to barter for $4,000 worth of braces for her teeth.
Now, Price said she is always keeping bartering in mind for any services she might need.
“I’ve never had a person be offended or refuse to barter with me or not think it’s a great idea,” she said.
The Patriot Ledger