Bartering Sites Allow Companies to Trade Services on the Internet
Business barter has traded up in popularity in the last decade. Now the Internet is making it easier to reach a larger audience and exchange goods and services across the nation or globe.
More than 7,000 Southern California businesses already engage in cashless barter as an alternative to the dollar-driven economy. Those numbers could increase if Web sites such as BigVine.com and Ubarter.com take off, competing with the 60 or so barter clubs that already operate here.
BigVine.com, based in Redwood City, Calif., recently teamed with American Express to create a business-to-business electronic marketplace. American Express will market the service to its 2 million small-business customers, according to BigVine Chief Executive Bippy Siegal.
Goods and services are paid for in “trade dollars” instead of real money. The seller of a service or product sets a price, typically on par with what the service would cost in real dollars. Prices can also be listed as “negotiable.” One BigVine member is willing to negotiate a price on 1,000 Nextel phones; another is trying to unload a single Lexmark printer for 69 trade dollars.
BigVine makes its money by charging a commission--typically 8%, split between the buyer and seller. Unlike the transaction itself, the commission is paid in real money. So, if you buy or sell an item valued at $1,000, you and the other party would each pay $40 in real money to BigVine.
Just about any type of business you can imagine is involved in this and other barter sites. I found plenty of lawyers, accountants, human resource specialists and other professionals, along with restaurants, auto supply stores, construction companies, cellular phone resellers and all sorts of other vendors.
The list of participating businesses isn’t limited to independently owned small businesses. Sheraton Hotels & Resorts allows BigVine members to use trade dollars to buy gift certificates for hotel stays, and if you want to get there in style, you can charter a Lear jet from a participating service.
Obviously, you wouldn’t use a bartering program as your entire market--real money still comes in handy these days. But it’s a way to get rid of excess inventory perishable merchandise, or, if you offer a service, to capitalize on times when you’re not otherwise occupied.
The privately held company was founded last year and is backed by American Express, Kleiner Perkins Caufield & Byers, the partners of Kohlberg Kravis Roberts, and Sanford Robertson, founder of Robertson, Stephens & Co.
Another barter site, Seattle-based Ubarter.com (publicly traded as UBTR) provides “business-to-business barter services for retail, professional, media and other corporate members,” according to the company’s quarterly report.
Like BigVine, Ubarter offers goods and services in a long list of categories including Advertising & Promotion; Art & Collectibles; Auto, Boat & Motorcycle; Business & Office; Computer Products & Services; Construction & Renovation; Financial Services; Real Estate and more.
The service charges a 5% commission to both the buyer and seller, which can be charged to a credit card.
Bartering has its advantages, but don’t expect any legitimate barter service to help you avoid income taxes. All exchanges are recorded and any trade dollars you earn are reported to the IRS on Form 1099B. And no, the IRS won’t accept barter for payment of taxes.
Technology reports by Lawrence J. Magid can be heard at 2:10 p.m. weekdays on the KNX-AM (1070) Technology Hour. He can be reached at larry.magid@latimes.com. His Web site is https://www.larrysworld.com.
