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from New York Times, July 27, 2003

Let's Make a Deal: Barter in a No-Cash Economy
By Warren St. John

Like any number of disenchanted, deskbound New Yorkers, Dan Bollinger dreamed of quitting his job and starting his own business. Mr. Bollinger, 33, an accountant at an interior design firm, had an idea - turning his hobby of making all-natural soaps into a full-time enterprise - but he lacked money to get the business off the ground and out of his kitchen. He did, however, have lots of soap - bars and bars of the stuff, curing in the nooks and crannies of his Brooklyn brownstone.

One afternoon, Mr. Bollinger logged onto an online classifieds site, and offered to trade a few bars of strawberry seed and cinnamon oil soap for a set of metal shelves he thought he could use for storing the soap scattered around his home. Mr. Bollinger's offer of eight bars of his soap was accepted, and he had a deal.

Since that first fateful transaction in April, Mr. Bollinger has traded his soap for things like soapmaking equipment and the design of the logo, packaging and Web features for his fledgling company, Dirt Bag Soap. (His motto: Don't Be a Dirt Bag.) The company is now up and running, and Mr. Bollinger says he has plans to leave accounting for full-time soapmaking. More than three-quarters of his start-up costs were covered by bartering, he said, and the transactions were almost always easygoing.

"I say: `That's worth six of my bars. What do you think?' And they say, `I was looking to get eight bars,'" he said. "If they think it's worth an extra bar, I'll always give it to them."

For some cash-poor young professionals, this is what the new economy has come to: trading whatever - talents, time or simply that dusty and seldom-used George Foreman grill under the sink - for someone else's whatever. Fee-based barter Web sites have popped up in the last couple of years - barteradvantage.com, for example, and barteringconnection.com - but for the young urban swapper, the happening marketplace is under the free bartering category at craigslist.org, the online classifieds community, which started in 1995 by listing Bay Area events and has now spread to 23 cities.

Postings under the Craig's List barter category have increased 200 percent in the last year to 20,000 a month, said Jim Buckmaster, the company's chief executive.

Lawrence J. White, a professor of economics at the New York University Leonard N. Stern School of Business, said the advantages to bartering are simple: tax avoidance and what economists call price discrimination.

"I trade my goods and services for your goods and services, and implicitly we're selling to each other at lower prices than if we had a cash business," he said. "It's a way to offer a special deal in a special way."

Bartering activity, Mr. White said, usually waxes and wanes with the economy. "You find more of this stuff going on in not-so-good times," he said.

Joan Ferreria of the Bronx, 19 and unemployed, has traded his Web design skills for a computer keyboard, as well as piano, photography and driving lessons. For giving Spanish lessons, he has banked two 30-day unlimited ride MetroCards.

"You can post virtually anything, and someone will eventually get back to you with whatever you want," he said.

Many obsessive barterers, though, seem driven less out of economic than psychological need. Posting a barter ad on Craig's List can be like stepping into an episode of "Antiques Roadshow," where every odd bit of junk offers a potential for drama and, if not riches, then at least some other interesting bit of junk.

For the unemployed, idle freelancers or the existentially bored, bartering offers the possibility of a little suspense in the day.

Shari Troy, 46, a Manhattan theater professor who traded a kitchen table, two chairs and a microwave oven cart for two African masks, two wooden African statues and one African "statue slash bowl," said she bartered because it offered more chance for surprise than a straightforward cash transaction.

"You don't know what it is that they're actually offering until it's in front of you," Ms. Troy said. "If it's about the merchandise itself, bartering may not be the best way. It's about meeting the person. It's seeing what kind of items they bring into your world. It's an exchange of merchandise as well as personality."

Ms. Troy said she offered an old tennis racket for trade. She got a response from a man willing to pay cash for it, provided Ms. Troy would stand on a Manhattan street corner and conduct the transaction quickly through his car window, to accommodate his busy schedule. Ms. Troy went along, not so much for the money as for the adventure.

"The truth was, I didn't need to get rid of the tennis racket," she said. "It was fun."

Recent Craig's List barter ads suggest ample opportunities for adventure. "My Jackie Chan Cable Flex for Your Bun and Thigh Max," reads one. Another user is looking for a "fish-head mask," and still another offers lessons in "Ikebana, the fine art of Japanese flower arranging." During the World Series last year, a San Francisco Giants fan made headlines for claiming to offer a pair of Series tickets in exchange for a vial of human sperm for artificial insemination.

Many of the ads are not for goods, but for professional services like Web design, housecleaning and massage. Other service industries are represented as well. Last week on Craig's List, a dominatrix offered to trade her services (along with "dungeon rental") for plane tickets, carpets, tiling work and an antique couch.

Reached by telephone, the dominatrix, who asked not to be identified, said she had traded successfully for an accountant, movers and housecleaners. She had this advice for prospective barterers:

"You need to be incredibly specific in your ad - spell it out like you're talking to a child. Otherwise, your mailbox will be flooded with stupid questions."

Professor White of N.Y.U. said that for the unemployed and for freelancers between jobs, bartering can make economic sense. "People will find it more worthwhile to do when the opportunity cost of their time is less," he said.

That describes the situation of Suzanna Bowling, 45, a sailor who is planning an around-the-world voyage aboard a 70-foot gaff-rigged schooner docked at Chelsea Piers. With idle time before her trip, Ms. Bowling has been trading day sails in New York Harbor for electrical-engineering work on her boat and a high-resolution scanner for her computer. (She also bartered her 1984 BMW for an Apple laptop.)

Ms. Bowling says she barters as a lifestyle choice as much as out of economic need.

"I think we live in a society that places too much emphasis on the value of money," she said. "We are a throwaway society, and we don't realize that something that is a throwaway to someone might be of value to another."

Transactions do not always go smoothly. For one thing, there are dishonest traders. Mr. Buckmaster of Craig's List acknowledged, "There is a tiny and growing number of scammers." He added: "Most scammers aren't going to take the time and effort to do a trade. They're generally looking for cash."

Then there are the unreliable people. Vincent Amorando, a Californian in Hollywood, has been offering to trade guitar lessons on Craig's List. He said he gets e-mails from people who seem excited about a deal but who do not follow through.

"It might be kind of an impulse thing," he said. "Either that or I'm sending creepy e-mails back, but I don't think so. It's a little disheartening."

Mr. Bollinger, the soapmaker, said that in his experience, other barterers fail to show up at their scheduled appointments about half the time. "There are a lot of fake-os out there," he said.

Those who do follow through can run into other problems. Barterers trading for services have no guarantee that the people they are hiring are actually qualified to do the work. Then, there is the problem of agreeing on a price and squaring needs.

Nancy Taylor, a graphic designer in Manhattan who was bartering with Mr. Bollinger, said she was happy to do designs for his new company but she simply didn't need so much soap.

"I'm not that filthy," she said.

Mr. Bollinger and Ms. Taylor compromised. She took a few bars of soap and gave Mr. Bollinger a list of things she wanted in the hope that he could trade soap for them.

Professor White said that bartering could be inherently inefficient. "Cash is a lot more flexible," he said. "I could accept five cases of soap for my services, but do I have to turn around and sell the soap?"

For the obsessive Craig's List barterer, such inefficiencies may simply be part of the allure - they offer something to talk about and more opportunities for a surprising and satisfying deal.

"Sometimes it feels like more work than it's worth," Ms. Taylor said. "But the adventure makes up for it."