Hard Times Create Boom Of Local Bartering

By Donna Wright
 
SARASOTA, FLORIDA — Dr. Michael Kanter doesn’t just take cash or credit for fixing teeth. The dentist with Lakewood Ranch Dental also takes flowers, or the service of a plumber, or perhaps a meal at Cafe L’Europe or one of his other favorite restaurants in Manatee and Sarasota counties.

As the recession deepens, Kanter is finding more patients willing to trade for dental care. As a member of the International Bartering Exchange of Sarasota, Kanter frequently barters his dental services for those of other members. In return, he earns trade dollars to spend on goods and services provided by other members.

Kanter is not alone. Bartering — the trading of goods or services without using cash — is making a comeback in this troubled economy, economists report. Bartering can be as simple as trading baby-sitting with another family, or as complex as an exchange with strangers facilitated by Web sites that have sprung up to connect trade partners.

Bartering ads on Craigslist.com have increased about 100 percent since last year, according to a spokeswoman for the online classified advertising service.

The modern barter exchange business has become a $600 billion industry with its own banking system, which tracks trading dollars that can be exchanged for goods and services around the globe.

Bartering makes a lot of sense, say Ron and Mary Unger, who founded International Bartering Exchange in Sarasota 18 years ago. “In good times, bartering is a way to fill occasional down time or move excess inventory,” Mary Unger said. “In bad times, bartering is a survival tool that can help businesses afloat and grow their markets while conserving cash flow.”

IBE’s membership has increased by more than 50 percent in the past six months, which now has more than 600 members, the Ungers report. “Recession looming, bartering booming,” Ron Unger says with a bright smile.

That same trend is reflected nationwide. The Ohio-based National Association of Trade Exchanges has seen an 8 to 12 percent growth in bartering trades and exchange memberships. Recognizing that, in today’s tight economy, barter trades make more sense than cash transactions, the Ungers are now waiving the $495 membership fee to help out troubled businesses. Members still pay a 15 percent transaction fee only when they purchase goods or services from another member with trade dollars.

IBE’s network of exchange partners represents nearly every type of business, trade and profession in the marketplace from Tampa Bay to Fort Myers. “We have plumbers, electricians, accountants, lawyers, retail, medical services, advertising and marketing — you name it, we’ve got it,” says Ron Unger. IBE’s annual revenues: $1.5 million.

Working as brokers, the Ungers help members identify needs and then calculate how much of their business they can transact in trade dollars. Then the Ungers market those services through the IBE’s Web site, which includes a catalog of goods and services members provide.


Mary Unger, International Bartering Exchange.

 Examples of local barter exchanges run the gamut. Van Wezel Performing Arts Hall trades tickets for cleaning and catering services. Golden Apple Dinner Theater uses barter dollars to dry-clean costumes.

Owners of Ophelia’s on Siesta Key remolded their restaurant by providing barter exchange members credit toward meals in exchange for doing construction work.

For Dr. Nancy Gerhardt, owner of Kindness Animal Clinic in Bradenton, bartering has proved to be a great tool in expanding her business. “I use barter to cover most of my business expenses, like advertising, my answering service, plumbing and electricians,” says Gerhardt. “I don’t like to use my dollars for personal items. I tend to use them to further my business.”

But there have been exceptions over the years. Gerhardt and her husband used barter dollars to pay for their wedding. Then, when there was a death in the family, barter dollars she earned by spaying and neutering members’ pets and caring for their medical needs helped pay for the funeral.

Gerhardt has found bartering helps grow her business because satisfied exchange members tell others about Kindness Animal Clinic. “It’s really helped me through the rough times,” says Gerhardt.

For Art Conforti, owner of Beneva Flowers, IBE membership has helped his business become the fourth-largest Teleflora provider in Florida. For every trade dollar he sells in flowers, Conforti says he gets $3 in return business from new customers who learn about Beneva Florida through the bartering experience. Conforti credits 40 percent of his business’ growth to the exposure he received through bartering.

But as the economy tightens, the Ungers are noticing a change in how members are trading services. “In good times, members tended to use those trade dollars for personal use or luxury items,” Mary Unger said. “Today, an increasing number of trade dollars are going for health-care services and operating expenses.”

Kanter says he is seeing more members use their trade dollars to help cover dental or medical expenses for employees. “It’s a way a small business owner can offer health care for employees,” says Mary Unger. Other members are using trade dollars for goods and services to replace bonuses that vanished in the tight economy.

The Ungers recently had four investors list San Marco condominiums in downtown Sarasota on the exchange. “We trade a lot of homes, land and high-end items, like luxury cars and yachts,” Ron Unger says. “These are four investors who have to unload their property and have not found cash buyers.”

Those investors want the exposure of IBE’s connections with the worldwide Banc, as well as the security of professional barter exchange. “That’s the big difference between direct barter — where I trade my service for your product — and a barter exchange that gives you a trading account,” says Unger. “People who do direct barter (contra) take risks. Direct barter is not secure. The other person can go out of business or skip town. And direct barter is limited because you have to find someone who has what you want and also wants what you do. . A commercial trade exchange protects you.”

IBE’s strict rules appeal to Gerhardt, whose barter transactions reach $12,000 a year. “The good thing about IBE is Ron and Mary do not let people inflate their trade prices,” Gerhardt says. “As members, we charge regular prices. We don’t give discounts. That is one of the reasons their organization is better than others. I am a very happy barter member.”