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Inside the barter: how to buy without cash

Highlights
  • If you don't ask, you can't trade.
  • Get to know your trading partner.
  • Before bartering, put it in writing.

Can you get goods and services without paying for them? The answer to that question could be yes, if you're willing to barter.

Bartering is nothing new; the system predates currency. But the practice is likely to grow in the face of a dismal economy, says Justin Krane of Green Apple Barter Services, a network in Pittsburgh that specializes in facilitating business-to-business trades. Krane estimates the total scope of the barter economy to be about $10 billion worldwide a year.

Alan Zimmelman of ITEX, another business-oriented bartering network in Bellevue, Wash., says it's hard to put a precise number on it. But he agrees that bartering is a practice that is big and getting bigger every year as business and people look for creative ways to stretch their budgets.

Although there are few hard numbers on the size and scope of the bartering market, there are several rules -- both formal and informal -- that govern the exchanges of goods and services without cash.
At least ask 
So how does one start a barter? The answer is simple, according to Todd Beauchamp, a part-time music producer in Los Angeles who routinely trades session time for equipment and agreements with artists to play on other records.

"Ask. You have to ask people if they're willing to trade, because a barter isn't advertised," Beauchamp says. "But when you do ask, you really do open yourself up to opportunities that weren't always there before."

That's a sentiment shared by Ted Costa, a lawyer in Portland, Ore., who says he routinely inquires about his clients' hobbies and professions in case they aren't able to pay his rate.

Costa's willingness to dig a little deeper, highlights another key component of bartering -- you have to have something useful to trade. While the service or good may not be obvious, bartering is fundamentally about exchanging value, and that means success hinges on having something other people want, Beauchamp explains.

"Cash can be very inflexible, especially in this economy," Beauchamp says. "But the truth is that most people have a lot of stuff they can barter. They just have to be creative and willing to take a chance that could be an opportunity."

But once that opportunity presents itself, a whole host of different challenges can arise, and those who barter regularly say that both parties need a little bit of common sense, trust and flexibility.

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Find the right partner 
Just like a cash deal, bartering requires trust. But unlike cash transactions, barters generally create ongoing relationships. And that's where things can get tricky, according to those who barter.

While it's important to find someone who is trustworthy, it's hard to really know if a person is reliable before the deal is struck.

Although there is no substitute for the kind of careful consideration you'd likely give a cash transaction, people who frequently barter recommend working with members of an established community. Church groups, social clubs and other organizations all make great settings for finding a barter partner. And according to Beauchamp, it pays to start small.

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