Review: The Art of Barter

Every Sunday, The Simple Dollar reviews a personal finance book or other book of interest.

art of barterA while back, I wrote a post called “Askers, Guessers, and Personal Finance” that proposed that bartering and negotiation are much easier for some people than for others, depending on their personality and the culture in which they were raised. I’m very much in the “guesser” camp, which means that I often have difficulty negotiating with others, asking for things, and bartering.

After that realization, I’ve spent some significant time focusing on improving my willingness to ask for and trade for things, and thus when I spotted The Art of Barter by Karen Hoffman and Shera Dalin on the shelf at my local library, I snatched it right up.

The book basically makes the case for bartering – in other words, offering one good or service in direct exchange for another good or service without cash in the middle – and discusses how exactly to go about it in many different situations. I myself have found bartering to be very useful and often do it with people I know – but will this book offer enough advice for me to attempt it in other situations?

1 | What Barter Can Do for You
The big advantage of bartering is (obviously) saving cash, because you can then conserve your cash resources for the things you can’t acquire through bartering. The authors go on to argue, however, that bartering can also save you time or improve the quality of your time through swapping skills, as well as open the door to building friendships and other long-term relationships because of the intimate nature of bartering. Bartering also teaches patience, which is an absolute necessity for bartering and for successful living in other areas.

2 | The Barter Lurking Around Your House
What do you have to barter with? Your home is filled with things, from the unused stuff in your closet to the space itself. Quite often, I encourage people to clean out their closets and sell off unused stuff when they find themselves in a financially challenging place. Hoffman and Dalin carry it further, suggesting you constantly look at the stuff around you as a source of bartering and lending in order to maximize the value of your time and possessions and energy.

3 | Trading Like a Pro
Where can you go to start bartering? The authors offer a handful of suggestions, but the easiest place to start is online, starting with sites like Craigslist and PaperBackSwap that facilitate bartering over the internet and allow you to do the bartering from home. One key point: use photos and as much (honest) documentation as you can for the things you trade – and expect the same from the people you trade with, so it’s clear exactly what you’re giving and receiving in a trade.

4 | Trading in the Fast Lane
Here, Hoffman and Dalin suggest joining a bartering exchange, something I’m unfamiliar with (aside from some co-ops, there’s nothing like this in my area that I’ve been able to find). The authors discuss many varieties of these, from swap meets to “time banks” (where people essentially trade their skilled time with others). How do you find such things? Start Googling, looking for bartering in your specific area.

5 | The Upsides and Downsides of Barter
The authors discuss some of the downsides of bartering here, and they mostly focus on patience (you’ve got to have it), taxes (you’re going to have to pay them), and some inconvenience (everything you want won’t always be available or convenient). Obviously, the impact of these things vary depending on your specific situation (for example, exchanges usually handle any tax issues for you – and I’ll mention them more below), but the benefits of bartering almost always outweigh the drawbacks.

6 | There’s No Place Like (Someone Else’s) Home
Your home itself is often a great thing to barter. For example, you can barter a stay in your home for a stay in someone else’s home, saving a great deal of money on family vacations. Another example: you can literally swap real estate with other people, saving a great deal on costs if you’re willing to – or need to – move. The convenience of doing this can make up for a bit of inequity in property value, after all.

7 | Barter, Taxes, and You
First, the good news: you don’t have to pay taxes on bartering if the barter was the incidental sale of personal property and the trades are not part of the way you earn an income. This covers most bartering that people will do. However, some people will try to trade items in such a way that they make a profit from it – buy an item for $20, trade it, trade that item, and then sell the item for $60. That’s a net gain of $40, and you are required to pay taxes on that. The chapter outlines how you go about doing that – it’s pretty straightforward.

8 | Charity Expands with Barter
The idea here is that you don’t have to just donate cash to a charity – you can also donate your time, your talents, and specific items that you own that may be of use to the charity. Rather than just writing a check, find out what the charities you care about actually need and see if you can give that, instead. Think of charity on a broader scale, too – are there individual people you can help with your skills and time and energy and possessions?

9 | Child’s Play: Barter for Kids
Get your children involved with trading as early as possible. In fact, my own children are starting to do this – they’re about to sign up for their own PaperBackSwap account where they’ll trade some of their books that they no longer read for other children’s books that they might read, now or in the future. You can also encourage them to trade with family and friends – just be sure that all guardians and parents are aware of the specifics of the trade so there are no issues later on.

10 | Barter and Your New Small Business
There’s no reason you can’t barter to help your small business. Perhaps you can trade your rent for some services provided by your business, or accept some bartered items in exchange for items your business sells. In the end, the focus should be on maximizing your return at the end of the year – just don’t forget that bartering can be a big part of increasing the value of your business without directly disrupting your cash flow.

11 | Barter as a Career
Bartering as a career? The authors discuss many niche careers for people who are very good at the social nuances of bartering, such as brokering or running a barter exchange. I can definitely see a role for this as a side business – for example, you set up a swap meet where people pay a dollar to get in and you do all the work of getting the space reserved and the tables ready.

12 | Barter to Your Health!
The final chapter discusses the sticky issue of bartering for health care, something that is fairly controversial in the medical community. Should doctors accept a barter for the medical care they provide? I think it’s very much up to the individual doctor and should not ever be expected. Many doctors seem to accept limited amounts of bartering as a form of charitable work.

Is The Art of Barter Worth Reading?
More than anything, The Art of Barter felt like an encouragement to get out there and barter with others rather than a directly useful guide. Many of the topics seemed directed towards people who are constantly out there bartering and trying to make a profit from trading, which is a group that doesn’t really include me.

However, if you’re really into bartering and need a big dollop of good advice – or you’re like me, just getting started and needing a little encouragement, The Art of Barter is a worthwhile and entertaining read.

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  1. triLcat says:

    Beyond plain bartering, now that many small communities have lists, it’s easy for a community to share items.

    Several years ago, my husband bought his friend (Call him J) a roof-rack for his car so that J could take his camping/juggling equipment to a yearly juggling event. (husband didn’t have or want a car, and this yearly event caused an issue for him)

    J lives in a small town, and let it be known in his town that if anyone needs to borrow a roof rack, they’re welcome to borrow this roof rack any time except the week of the juggling event.

    This past week, I noticed that a fellow blogger (and good friend) mentioned she had borrowed a roof rack from J even though she lives about 30 miles away…

    Instead of sitting in a shed collecting dust, the roof rack has been used dozens of times to help dozens of people who need a roof rack once in a few years and don’t want to buy one.

    (Cars and gasoline are very expensive here, so people tend to buy the smallest car they can manage with. Families with three kids will drive a Toyota Corolla or a Mazda 323 rather than a Camry or a 626 – which means that people are often short cargo space in their cars. Borrowing a roof rack is a very common way of managing your camping supplies or taking someone to the airport.

  2. Luke says:

    I recently bartered my services as a web designer to get my deck stained. My wife and I were out working on the deck and after two hours, I realized I’d be out there the rest of the summer stripping, sanding, conditioning and staining. I started looking around for local people who could stain it for me, and found one who looked like they needed a new website design. I asked called him up and asked if he’d consider a barter of services. Turns out, he was looking for a web designer anyway and was thrilled to make the deal.

    I spent about 13 hours on his site (much less time than I would have spent on the deck), and he finished my deck in a day and a half. All in all, I am THRILLED with how this turned out. I’ll definitely be bartering my skills more in the future.

  3. Anitra says:

    I would tell more moms that feel overwhelmed that you can barter for childcare! And I don’t necessarily mean by trading babysitting with other moms (although that’s good, too).

    A friend who homeschools her older children asked me if I could tutor her oldest in math this past year. We ended up agreeing to exchange 1 hour of tutoring for 2 hours of babysitting every week.

    I’m hoping to do it again this year! And now another mom is tutoring the same family with chemistry. :)

  4. Andi says:

    Chapter 12 – Barter for your health care. Just for the record, it used to be routine for country doctors to barter for their services. Not uncommon to be paid with foodstuffs or other services because cash was pretty limited on the prairie.

  5. In the past, I certainly didn’t have what it took to “barter” or “negotitate”. It is certainly a skill. However, once I realized the financial benefits you can gain from it, I learned. And fast.

    Its not hard–just take a little guts and bravado, for want of better terms.

  6. Pikkewyn says:

    The discussion of bartering for health care reminds me of a Michael Moore film I saw several years ago (don’t remember which one–they all kind of run together to me) where he was having people who needed minor care do things like sweep floors or knit things or whatever. He was mocking the idea, of course, but I didn’t see why it was such a bad thing. Sure, people who are critically injured or ill should not be doing work, but why not barter for a flu shot or a new set of dentures (I say that because my dad’s lower plate just broke and he’s going to have to shell out $400).
    And you’re right, Andi. Old country doctors bartered for care all the time. Setting a broken arm would cost roughly one chicken. (I’m guessing. I don’t really know.)
    As for kids, they are natural barterers. Just watch them trade rides on a scooter for rides on a bike or Hot Wheels cars or lunch items back before the schools put the kibosh on that (darned kids with their allergies!). Kids are not bashful about it at all! We can certainly learn from them, but we all have this inborn ability. We just need to tap into our inner child and remember how. Start by repeating after me: TRADE YA! :D

  7. AniVee says:

    Under “downside of bartering” you mention “taxes (you’re going to have to pay them),” -

    Let’s not be naieve here, Trent, one of the great appeals for barterer (at least outside the home – not the home baked bread for baby-sitting, domestic bartering) is that the “income” from the “sale” of your own services is not reported as revenue (and then taxed, federally or locally.)

    I know of successful barters of citizenship papers/legal fees for waterproofing a roof, construction work on a new building in exchange for one apartment, outboard motors for air conditioners, medical services for upholstery, etc etc. Advertising agencies regularly traded publicity for hotels in exchange for free days/weekends in the suites (usually used by the top executives and their families) and, since no cash came in for the use of the rooms, no revenue was reported.

    The ethics of all this is open to endless discussion and I wouldn’t dare go into it, pro or con, but I am long convinced that all or most of it in business goes totally unreported.

  8. Jan says:

    I have bartered my sewing skills for chiropractic care. This was at the request of my chiropractor.

  9. Tricia says:

    My mechanic was going thru a nasty divorce and worked 60 hours a week, and had full custody of the kids. I bartered to clean his house every week in exchange for car care. We did this for 2 years, and I got new tires, brakes, oil changes etc. He came home to a spotless house, beds changed and bathrooms cleaned! I just kept a record of my hours and his hours, so that neither one of us were losing anything. We stopped when he got married….:)

  10. Karen Hoffman says:

    Trent,

    Thanks so much for reviewing our book! We LOVE to hear that you found it in a library and libraries are ordering it! We heard a couple of weeks ago about another library having it, which is so cool! To your blog contributors, sharing your stories is an awesome way to spark ideas! Keep it up! Although I’d been in the barter industry for 20 years I learned so much from writing this book with my co-author Shera. There are a trillion ways to use barter! Just be open to being creative!

  11. My husband bartered his IT skills to our local YMCA–he does about 1 hour of IT support for the YMCA per month (maintenance, virus removal, etc.) in exchange for a family membership, which we never would have paid for on our own (it’s about $70 per month!). So now we can go use the Y’s facilities whenever we want…it’s great! I’m so glad he looked into it.

  12. Steven James says:

    Great article and i totally agree, bartering is awesome. I mean there are no rules, you can barter really everything which is a great thing and you save a lot money and you are green, so it is a win win situation for everybody! Im trading with neighbors or on barterquest.com, give it a try…

  13. barter sites says:

    It was actually pretty attention getting coincidence, only a hand full of hours after stumbling across this book in the book store and flipping through it for a while, my google alerts pointed me to This Review!

    Couple of things I’d like to add in responce to the review, if you’re looking for a barter exchange in your local area, try the ‘local’ searches in google or yahoo. also, there is a directory of barter exchanges by location over at barternews.com

    When it comes to bartering for a living, if you’re the right kind of person- it’s fun! Getting to know other entrepreneurs and people in the community, helping other people grow their business, and moving lots of different products around. I suggest if you’re at all curious you look deeper into the possibility. And if you want to start your own barter club, and operate as ceo And barter broker (plus then you can hire other brokers on commission) you can do so with a barter exchange site from curomuto.com

    And lastly, we’re building a search engine that searches multiple barter sites from one place, and that’s over at barter-sites.com We’re making it easier to find the trades you’re looking for online.

    Oh wait- one more thing. In the article you mentioned that barter comes with some inconvenience. If we look at it in terms of trade being part of commerce and therefor business, the work it takes to find and negotiate a trade can be seen as marketing work. We are finding transactions.

    p.s.- I love the comment about the car top carrier. I think every town should have a ‘borrow’ list. In fact, maybe I’ll start one…

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