Firms do business without money in county's first bartering network

ANNE ARUNDEL BUSINESS

December 10, 1992|By Lorraine Mirabella | Lorraine Mirabella,Staff Writer

An Annapolis business owner has had his chimney swept bought gifts and eaten at restaurants without paying a cent. A local attorney used neither cash nor credit for office stationary. And the owner of a shopping mall gift boutique no longer writes checks for the fees charged by her optometrist and dentist.

County business people make deals with each other all the time. It's called barter -- trading goods or services at market value.

The centuries-old way of doing business is becoming popular among county business people as a way of saving cash and making money. In June, Gail Yates and Taralynn Schmidt-Kyle of Arnold started the county's first local barter network. Its ranks have grown to 70 businesses since then, including members who have belonged to organized networks outside the county for years.

Within the Creative Barter Network, a member can purchase goods or services from any member using trade dollars, simply by showing a membership card and having the seller log in the sale.

"Bartering will bring you more business than you normally would get," said member Rich Stewart, owner of Data Care, a computer repair service.

Though Creative Barter Network Inc. is paid a 5.5 percent to 6 percent cash commission on each transaction, which means members might pay slightly more than they would with cash, the extra business makes it worth it, Mr. Stewart said.

"With the cost of advertising at 6, 7 and 8 percent -- and that doesn't always work -- this is a sure-fire way of getting an increase in business," he said.

At one time, business people bartered informally to avoid taxes. Now, the Internal Revenue Service provides special forms for barter trades. Barter clubs report all transactions to the IRS.

Mr. Stewart says he expects the barter concept will catch on quickly in a county with so many small businesses. He's already planning for future trades that will have his car worked on and a new kitchen installed at his home.

Though the county network has 70 members -- from landscapers to office suppliers to pet groomers -- they have access to thousands of trades because of a link with International Reciprocal Trade Association, Mrs. Yates says. The group of 150 exchanges predicts that a million businesses will use the barter system within a decade, four times the current number.

Some products, though, may not lend themselves to barter as readily as others, said Wayne C. Jordan, owner of Ramsey Music Co. in Annapolis.

Mr. Jordan has found it hard to find even exchanges. Business owners often won't barter using their better, harder-to-get merchandise, he said. He sells high-ticket items -- a piano might cost $4,000, for instance -- but he's found it's not always advantageous to have $4,000 worth of trade dollars. For one thing, he must still pay the piano manufacturer cash, and "it's difficult to find the things you want to buy when you want to buy them."

He said he plans to phase out his membership with two other exchanges, but intends to stay with the Creative Barter Network because it's local and he won't have to travel to use its services.

But he'll limit his participation in it, perhaps trading piano tunings rather than pianos.

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