Ever since my post a couple of months ago about bartering with my yoga instructor, I’ve been running into lots of people — both in the physical world and the virtual one — who’ve told me about their own experiences in the cashless economy. And just as I was getting ready to write a follow-up post about this, the New York Times published two articles about bartering in the past few days. Clearly, bartering is on everyone’s minds.
When it comes to independent workers and service providers, bartering is useful not just as a way to stay afloat in tough times, but also as a way to cultivate clients and customers.
A friend who is an acupuncturist and Chinese medicine practitioner says she built her entire practice on bartering — with her hair stylist, her dog walker, a massage therapist, and others. (On this point, I have to agree with Alina Tugend, the writer of one of those NYT articles, who observed that massage therapists are the most sought after barterers.) Now that my friend is established, she is more careful about whom she barters with since she has had a few too many cases of losing interest in the services of a barter partner. But in a word-of-mouth business, she says the bartering was the best way to build a loyal following.
I’m talking about this friend without identifying her because one issue that comes up with bartering services is that according to IRS regulations, income from bartering should be declared.
Here’s a few other issues I’ll think about the next time I explore a barter arrangement:
1. Can the two parties bartering devise a way to make the services being bartered equivalents? (e.g. A yoga class and a one-hour in-person writing session might feel equivalent, but will it feel fair to both people if all the writing help happens via email and brief phone calls rather than in a face-to-face meeting?)
2. Are the services being bartered usually billed at the same hourly rate? If not, can you make an adjustment that feels right to both parties?
3. Are both parties looking to continue the bartering for the same period of time — or is one looking for a short-term relationship and the other seeking a longer term relationship?
4. How do you end a bartering relationship? (Perhaps this is something you can talk about at the beginning, sort of like a bartering pre-nup.)
Anyone else come across interesting issues during a bartering relationship?
Anyone ever have the issue arise during an IRS audit?
Those NYT stories discuss a few companies that facilitate bartering of goods or services — Joe Barter, ITEX, and International Monetary Systems, of course, Craigslist, plus a bevy of sites like Swaptree that specialize in trading of used books, music, and video games. Anyone have other recommendations?