Making dollars stretch
by Marissa Hermanson

Barter may be perceived as an archaic way of paying for goods and services. But in reality, barter is a common practice these days. The International Reciprocal Trade Association (IRTA) reports that more than 250,000 North American businesses barter, and that their transactions exceed $16 billion annually.

Almost one-third of small businesses in the United States barter.
Two Boulder residents — Stewart Sallo and Herschel Goldberg — revived this alternative form of currency within our community through the Boulder Barter Exchange, an online network of small businesses that exchange goods and services using “barter dollars.”

Shortly after publisher Sallo launched the Boulder Weekly back in 1993, he joined a local barter group, and over the years became a member of national and international barter groups as well. After Boulder’s barter group was sold several years ago, Boulder was left without this alternative way to exchange goods and services. Sallo took it upon himself to create Boulder Barter in 2004. More recently, Sallo found that he had too much on his plate running a weekly newspaper to properly tend to his new company, so he partnered with Goldberg and developed a plan to expand the network swiftly throughout the Boulder community.

Boulder Barter serves as a bank and uses a virtual currency. It keeps track of all transactions occurring between members, and also maintains accounting records and balances.

“When a business sells its product or service, barter dollars are earned and the account grows,” Sallo explains. “When a business makes a purchase, the account is charged and the balance diminishes. A nominal cash transaction fee is charged on each transaction by Boulder Barter in order to cover operating costs.”

Boulder Barter’s initial focus is on businesses and professionals in Boulder County. Current economic problems make this an ideal way to conduct business because access to capital and credit is difficult. With barter local companies can buy and sell directly without the use of cash.

“Barter has always been an important vehicle for trade,” Goldberg says. “However, in the current economy many companies that need goods and services do not have the cash to purchase them outright. Barter allows them to exchange what they do have — inventory or capacity — to maintain or grow their business.”

Goldberg says the hard part is finding a company that needs what you have and then negotiating a fair value to trade. Boulder Barter isn’t a traditional, bi-directional barter, but an exchange network of businesses that barter.

“All items in the exchange are traded at their typical retail or fair market value, which eliminates issues of inequality,” Goldberg says. “Member companies sell goods and services to each other which deposit trade dollars into their account. They then use those trade credits to purchase what they need and want from any other exchange members.”

Local services like advertising, printing, legal services, graphic design, auto repair, website development and even dental care can be negotiated through barter.

Benjamin Buren, owner of Alive Photography and Custom Frame in North Boulder, has been a member of national barter networks, as well as Denver-based barter networks. Buren is looking forward to the expansion of Boulder Barter since national and Denver-based barter networks have posed problems for him in the past. National barter networks are difficult for Buren because his business of photography and framing requires a physical presence.

Another problem with national barter networks: “The economy of them starts to deteriorate because you aren’t face-to-face with people, and it’s not as organic as a transaction,” Buren says. “You’re not right there, and people start to charge a little more for the barter because it’s not cash. Before you know it, the whole economy of the barter is not working, and you are paying twice what a cash plan would pay in barter money.”

These problems have caused the barter networks that Buren has been involved with in the past to collapse. Denver-based barter networks also pose problems for Buren since travel is involved.

Buren says most people in Boulder who barter do one-to-one trade. “But you don’t always want to do the same thing as the person who wants to barter with you,” he adds. “That’s why networks are so great.”

Another advantage to barter networks — you get to purchase services and products you wouldn’t typically purchase with cash. Barter allows Buren to get his carpet cleaned more often than usual, as well as get acupuncture treatments.

“Because it’s not cash and I can’t use it to pay my mortgage, I would spend it on things I would not normally spend cash on,” says Buren. “And while I think there is a great value in acupuncture, I don’t have the disposable funds to go every two weeks.” Barter allows Buren to afford these services.

Buren believes barter networks are beneficial in the economy since companies are looking for more business. He encourages local businesses to give barter networks a try: “Hey, this isn’t your average trading-with-somebody-else-thing. It’s a new economy; a new concept. It’s well-organized, and it’s just like cash.”

Barter is ideal for businesses that are looking for alternatives to lower their expenses, because it allows companies to build profits and conserve cash. Barter also allows businesses to gain new markets with companies they don’t traditionally interact with.

“Once you’ve bartered successfully with another business owner, you create a personal business relationship that can help your company grow for years to come,” says Goldberg. “These relationships often turn into or refer to cash customers and are the basis for building long-term community.”

Visit Boulder Barter Exchange at www.boulderbarter.com.

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