Tuesday, June 13, 2006

Bartering for Goods and Services

When the dot-com bubble popped several years ago, Jessica Hardwick's life changed dramatically. Her Internet consulting business dried up and Hardwick had trouble paying household bills.

When her cat became sick, Hardwick could not afford the costly vet bills. Then she noticed that the vet was baffled by his new computer and offered her skills in exchange for medical care for her pet.

That experience ultimately led Hardwick to develop www.SwapThing.com, a California-based swap market that enables consumers to swap products and services through the Internet or through regional groups. Established in January 2005, Hardwick's online barter is a distant cousin of online garage sales such as eBay, Craigslist and FreeCycles.

''Our customers range from 18-year-olds swapping video games to 70-year-olds swapping crochet patterns. We serve a wide range of people who want to save money, exchange something they are no longer using for something they need, or trade collectibles,'' Hardwick said.

With 48,000 users in the United States and abroad, SwapThing enables users to operate locally or globally. You can search for merchandise and services with a prescribed radius of your zip code. Some users even use the system for travel and entertainment by swapping for sports tickets or vacation time shares.

SwapThing works like this: Registration is free. But upon completing a transaction, both buyer/seller pay a $1 fee, regardless of the size of the transaction. The fee jumps to $10 for service swaps. Deals can work out using different forms of currency, including a) non-cash barters, 2) cash-plus-merchandise trades, or 3) a negotiated cash payment. The site also features eBay-style auctions, with a pre-set ''Instant Purchase'' price, which operates like the ''Buy-it-Now'' button on eBay.

Florida has emerged as one of the most active regions in the SwapThing market. Several regional groups, called ''SwapCircles,'' meet in Florida. Public meeting sites are recommended by the founder. For instance, a few mothers meet regularly at Starbucks in Miami and Fort Lauderdale to swap bags of children's clothes while sipping coffee.

The art of bartering, however, does involve certain tax considerations. Hardwick is reluctant to provide tax advice, but her site includes a link to the IRS, with downloadable forms.

''We don't encourage people to avoid taxes,'' Hardwick says. ``There are rules.''

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