Last winter, Minal Mehta of Temple City, Calif., needed more equipment for her home office, but she didn't want to buy it. So the 30-year-old Internet marketing consultant posted an ad on bartering site SwapThing.com.
Ms. Mehta offered to provide consulting services in exchange for a laptop computer or other office supplies. A month or so later, a local entrepreneur building an online music service responded, offering to give Ms. Mehta a 2000 Acer laptop if she created a list of keywords he could use to improve his site's search-engine rankings.
They worked out the specifics of the deal -- the laptop for a list of 50 words -- at a Starbucks. Ms. Mehta paid SwapThing a transaction fee of $1. She estimates her hour and a-half of consulting was worth about $100 and the laptop about $300, but both parties were satisfied with the trade. "It made a lot of sense from a business standpoint," Ms. Mehta says. "Neither of us had to pay the other anything and we both got something we were looking for."
Businesses have been swapping services since ancient times. About 400,000 firms barter each year, accounting for about $9 billion in U.S. sales, according to barter-industry group International Reciprocal Trade Association. But a growing number of Web sites are trying to lure small firms and independent contractors to swap goods and services. The bartering sites let business owners arrange to exchange everything from traditional services such as accounting help and legal advice to more-unconventional things such as dental work and pet-sitting. Some sites also encourage businesses to swap with consumers as a way to cultivate eventual paying customers.
This isn't the first time Web entrepreneurs have tried to make online bartering successful. The dot-com boom of the late 1990s spawned sites such as BigVine.com that tried to create online barter exchanges using "trade currency" eliminating the need for one-to-one trades. But most failed to generate enough interest. Creators of the new sites argue that Internet users now are much more comfortable shopping and negotiating online.
Before the Internet took hold, businesses were mostly confined to trading with personal acquaintances or joining formal barter exchanges such as International Monetary Systems -- membership groups that broker trades and work with trade currency. The newer generation of sites, taking cues from the popularity of social-networking sites, aim to make it easy and cheap for business owners to meet trading partners. They can post profiles and email trade offers back and forth -- or even call each other directly.
SwapThing.com, which started last year, recently unveiled a feature called SwapServices that lets business owners design pages including photos, contact information, the services they offer and what they want to trade for. About 2,400 businesses have signed up. It costs a business $8 a month to post a profile in a metropolitan area or $100 annually for a national page, says SwapThing Chief Executive Jessica Hardwick, who says profiles give potential trading partners greater detail on who they are dealing with. Users can rate their bartering experience.
While only businesses can post profiles, they are open to searches by consumers as well as other businesses. "Someone could swap a used baby crib for a haircut," Ms. Hardwick says. "Chances are, if that person got a good haircut, they're going to come back as a paying customer."
BarterYourServices.com, launched in 2004 and now counting 300 small businesses as members, charges $18 for a three-month profile subscription and $48 annually. U-Exchange.com lets businesses and consumers join free, relying on advertising for its revenue. The site, founded in 2005, just hit 11,000 profiles, 60 percent of them businesses and 40 percent consumers, says co-founder John Moore.
Direct-bartering sites that don't offer the option of a trade currency face a common quandary: Swaps are rarely perfectly equal. Often one business pays some real cash to make up the difference.
Julie Pliska, a Los Angeles hairstylist and makeup artist has swapped in the past year on SwapThing for things such as bookkeeping, cat grooming and Christmas figurines. She uses her standard rates when negotiating trades and does all the bargaining upfront. "I found full disclosure is a good thing -- this is what I have, this is what I charge," Ms. Pliska says.
Other Web sites are reinventing the formal barter-exchange model online by doling out trade currency to members so they don't have to make direct swaps, but charging less in fees than traditional exchanges.
BarterBucks.us, launched last year, lets members post profiles and search for other businesses, transferring their credits -- "Barter Bucks" -- electronically. Joining the online exchange is free; a 10 percent commission is charged on transactions. BarterBucks, which offers live brokers for high-value trades, also networks with about 200 other formal barter exchanges, so members have access to 40,000 potential business-trading partners worldwide, says BarterBucks founder Debbie DeSousa.
Not everyone is convinced online bartering, at least pure direct-trading sites, will work. Krista Vardabash, executive director of the International Reciprocal Trade Association, says Web sites that count on direct trading are impractical. "It's for the same reason that old-fashioned barter didn't work," she says. "Eventually some of them are going to find out that they have to introduce a trade credit."
Andrew Whinston, director of the Center for Research on Electronic Commerce at the University of Texas in Austin, expects bartering sites to catch on with small businesses, but not as much as retailer and auction sites like eBay.com. "Historically in economies, you argue for the creation of money to avoid the inefficiencies of having to have this double coincidence of wants," he says. "That's never going to change."
So far, however, many business owners seem to be posting profiles on the Web sites -- though not all of them are successful in finding trading partners.
Joseph Cunder, a 45-year-old disc jockey in New Providence, N.J., has gotten no response in eight months to his U-Exchange.com profile that offers to emcee weddings and other events in exchange for "various services for home and computer." So far, he says, the posting is "pretty much worthless."