Bartering is a trade in Baltimore Exchange: More businesses are joining local cooperatives that facilitate the exchange of services and products among members.

October 18, 1998|By Robert Little | Robert Little,SUN STAFF

Like most hotel owners, Dominik Eckenstein runs an unpredictable business. During the busy summer season, the Admiral Fell Inn's 80 rooms might be teeming with guests; on slow nights he has a heap of empties.

Rather than let those empty rooms cost him money, Eckenstein puts them to use.

He barters them.

Eckenstein will swap a stay at the inn for cleaning supplies, flowers or computer hardware. He bought some scuba equipment and lessons. He even stayed in someone else's hotel.

The method is neither innovative nor unusual. Before there was cash there was barter, and small businesses across the country have found it a good salve for the wounds of the cash market. But in Baltimore, where organized bartering was somewhat slow to catch on, the concept is showing increasing signs that it has taken hold.

Today, local small businesses and business owners are trading regularly for everything from landscaping and computer supplies maid service and dental work. One local florist said he has traded $20,000 worth of flowers. Two trade exchanges are scouring the city trying to entice businesses to trade with them instead of their competition. And the Hamilton woman who launched an exchange three years ago -- the Baltimore Trade Exchange -- just drew her first paycheck, in cash no less.

"It's not new, it's a set-up that's been used for the last thousand years -- trade your product," said Eckenstein, who estimates that three or four customers a month stay in his hotel on barter. "It's just done a different way now."

The way it's done is through one of the country's 400 organized bartering cooperatives, which oversee about $4 billion in barter a year, according to the National Association of Trade Exchanges. The Baltimore Trade Exchange and the Kensington-based Barter Systems Inc. claim about 600 area members between them.

The businesses involved don't trade goods and services with each other directly; they do it through an exchange. A building contractor who performs a $2,000 renovation job for a restaurant, for instance, doesn't have to take $2,000 worth of meals in return. He or she can spend a like amount of "barter dollars" with another member of the cooperative.

So when the owner of an office supply store went tanning at a salon in Hampden, the salon owner used the credits to have her house cleaned by a maid service.

The owner of the maid service sent his family to a dentist in Perry Hall.

The dentist, working through a New England exchange, took his daughter on a ski vacation in Vermont.

Many of the trades are arranged by phone and recorded by the exchange's operator, but the exchanges also print a form of currency that can be used like coupons at restaurants or for walk-in services. Transactions are taxed based on their cash value, and account information is reported to the Internal Revenue Service by the trade exchanges.

'Fierce' competition

"Baltimore was a little late coming to the party, but it's here now," said Perry Constantinides, who founded Barter Systems in 1977 and expanded it to Baltimore 10 years later. "The competition has gotten pretty fierce."

Constantinides' competition is Mary Anne Rishebarger, a 40-year-old Hamilton woman who started the Baltimore Trade Exchange in her dining room in 1995. Until two months ago, her only income came from bartering membership in the exchange -- letting a computer retailer join for a computer, letting a restaurant join for a free lunch.

Now she draws a $2,000 monthly paycheck and is moving into office space on Harford Road. The renovations, the furniture and half her lease she'll pay for in barter.

Trade exchanges make money in several ways, including a membership fee of $300 or more and monthly fees of $20 to $30. The exchanges sometimes accept some of those fees in barter.

Beyond trying to attract new customers, the exchanges compete to handle the trades. Many businesses are members of both exchanges, but each time they make a trade they pay a percentage of its value to the exchange that handles it. Rishebarger charges 15 percent of each purchase. Constantinides charges 12 percent per transaction, with the buyer and seller each paying half.

Rishebarger said she spends most of her time trying to find ways for clients to spend the credit they have accumulated. She found new awnings for a flower shop, and is searching for a new fence for a client's back yard. For one customer, she found a podiatrist to work on his ingrown toenail.

"If a company has lines around the corner and no slow times and no excess inventory, then they probably don't need barter," Rishebarger said. "But anybody else ."

"They just need to expand their minds a little and understand they're not doing something for free, they're just getting paid in barter dollars instead of real dollars."

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