Barter Exchanges Catch On as Credit Tightens

Merchants' founder, Steve Bolles, says membership in his eight-year-old exchange, which has offices in 30 states, has tripled this year. As the financial situation remains bleak, Merchants continues to ramp up clients. "Just 18 months ago, when we would go and talk to business owners about signing up, they would say, 'We don't need to talk to you.' Now everybody gives us an appointment." A strong inducement: "Everyone we sign up gets a line of credit right away," Bolles says.
"Most people are looking to conserve cash," says Ralph Sigler, who owns Carolina Packaging & Supply in Raleigh, N.C., and belongs to two different exchanges. "We started bartering about 12 years ago. The way we were growing, it made sense to substitute barter dollars for cash dollars." Sigler says he bartered to obtain everything from security system installations to letterhead and envelopes. "I've saved anywhere from $20,000 to $25,000 a year by bartering, and I've also taken on a lot of new accounts."
Bartering serves as another avenue to help keep businesses afloat. "I would say my bartering has gone up 20% in the past six months," says Mike Cody, owner of Chip & Crack Windshield Repair in Garner, N.C. "At first I used it for hotel stays and gifts to employees." Now he says he has begun to barter to obtain equipment for his business instead of having to spend cash. "If I were to make a guess, I'd say that I've saved over $1,000 this year."
"Eventually we will see a shift in thinking," says NATE's McDowell. "What will happen is that people who were reluctant to use the credit line, or used it sparingly, will see the tremendous credit crunch and will look for new resources. They will find that they can use trade exchanges."
---Stacy Perman Business Week