Mar 24, 2009 11:07 pm US/Eastern
Bartering Booms As Business Owners Get Creative
BOSTON (WBZ) ―
From swapping baseball cards to trading the island of Manhattan for beads, bartering is an age old way of making deals without cash.
In a down economy, bartering is making a huge comeback. It's a way to get things you want and build your business at the same time.
That's how
Somerville photographer Kelly MacDonald got her portrait business going after she finished college last year.
"It's very hard to find clients to hire you when you have zero experience," she said.
So MacDonald decided to barter her pictures in exchange for just about anything.
Kelly showed us some of her work and what she got for it.
"This little boy is my kitchen table. This family is a brand new computer laptop, and this little boy is how I get my nails done free every week."
BARTERING HELPS BUSINESS
Because of the economy, the barter business is booming. Barter ads on Craigslist have increased 100 percent since last year. People are realizing that when business is slow, it makes sense to trade for your time and talent, rather than sitting around doing nothing.
"It's a wide open market," says Ken Meharg who runs
New England Trade, a formal business-to-business bargain exchange in Malden. Unlike individuals who trade goods or services one-on-one, in New England Trade, you accumulate points when someone uses your service and you can spend those points with any other business in the exchange, not just the one that used your services.
But Meharg says individuals can swap just about anything with anyone.
"Any individual can make it work if they understand how to go about it, what they want out of it, and if they put a fair value on their product," Meharg said.
PROTECT YOURSELF
Web and graphic designer Jules Johnson of
Mercy-Designs started bartering when she moved to the Boston area from California. She traded her services for a wide screen TV, a blackberry, a watch, and airline tickets. It's been a good experience in general, but she's also been burned.
"I have taken a hit quite a few times of actually building someone a website and then them not following through."
So you need to be cautious before making any deal says Meharg.
"Do your research, check into who you're dealing with. You want to ask for references, but sometimes you won't know until the deal is done if it's a success," he said.
MacDonald uses a written contract to spell out the terms of her trades. A year after she began bartering her photography services, she's booked plenty of cash clients.
"It's great. I never spend any money on advertising. It's all through word of mouth."
She says she owes much of her success to bartering.
"Being young and starting a business during a recession has been very challenging, but I'm finding that with bartering, it's really making my business grow."
And one other thing Kelly does. She sometimes trades for things she really doesn't need or want. But she turns around and sells them on Craigslist or eBay to make some cash.
BARTERING TIPS FROM THE UNIVERSITY OF ILLINOIS:
Don't assume anything. Be sure to agree on the details of exactly what will be done. Be sure expectations are clear to all. In some cases a contract or written agreement may be a good idea.
When You Provide a Service
-- Be sure you are clear on details of expected service. Don't take on tasks that you cannot do well.
-- Keep the receiver well-informed on your progress. Inform the receiver also of any problems or delays.
-- Decide when the service is to be provided. If needed by a certain date, be sure you have enough time to do it.
-- If you receive income from bartering, you may be required to pay taxes on this income. Refer to IRS Publication 525, Taxable and Nontaxable Income, for more information.
If You Receive a Service
-- Carefully explain what you want and supervise the work. Don't be caught with a completed job that is not what you expected.
-- Check the provider's qualifications.
-- Make sure the delivery of service is convenient and within the time you want the work done.
-- If the task requires your presence or help, make sure you are aware of this.
Visit:
Kelly MacDonald's photography Web site
Visit:
New England Trade
Visit:
Mercy-Designs
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
Click to enlarge
Stumble It!
Reporting
Comments