Barter networks connect businesses that want to trade goods and services

With many businesses struggling under the economic ravages of the pandemic, some are finding relief in bartering – a trade practice that’s been around for millennia but could prove to be a very old solution to a current problem, industry members said.

Rather than necessarily trading one to one, barter exchanges, like the Jericho-based National Commerce Exchange, create a network of businesses so that members can earn "credits" by offering goods or services to other businesses. Those credits can later be redeemed with other businesses in the network.

"Unfortunately, due to the circumstances, we’re actually in a good time to consider barter, simply because there isn’t much cash around," said Marge Sasso, vice president of the National Commerce Exchange. "We’re discovering that our current members are utilizing barter for the expenses they just don’t have the cash for – for example, restaurants. Obviously, barter can’t assist them in purchasing food or produce or anything like that" since services are generally more bartered than goods, and businesses don't generally have fresh food in excess. "But restaurants have other expenses – plumbers, electricians, they need printing and they certainly need advertising."

The National Commerce Exchange represents around 3,000 local businesses and earns a 10% commission on members who receive a bartered service. And though there hasn’t necessarily been a significant uptick in bartering during COVID-19, the nature of barter has changed slightly, Sasso said. "In the past, people would sometimes use barter for more frivolous items, but now, frivolity is not the point of the day," she said.

Elana Schondorf, owner of The Sunflower Bakeshop in West Hempstead, said in the past, she’d used barter to eat at restaurants and to get maintenance done on her house. This holiday season, she said, she’ll be trading baskets of chocolate-covered pretzels and using barter credits for a $4,000 advertising campaign to get the word out about her new gluten-free offerings.

"You need to manage it like any other account," said Schondorf, who is part of the American Barter Exchange in West Babylon, which has 350 members. "You can build up your barter account and you have so much money and you aren’t spending it, but [for me] I’m using it on advertising, and I know I’m going to use it quite a lot."

And that is one of the potential pitfalls of barter, said Salil Zaveri, who had his own Long Island barter exchange several years ago, and still takes part in the practice. The former Dix Hills resident, now living in Puerto Rico, said depending on the exchange, he would build up credits and not immediately find ways to use them. He’s found success both with the National Commerce Exchange and with less formal arrangements. His Salil Zaveri Consulting, which consults on insurance and business matters, will often exchange hours with other consulting firms.

One of the things to look for, he said, is a large enough network of businesses that can provide services you need. And, since many companies are looking to use their barter dollars toward advertising, one good thing to look for is an exchange’s media list. Places like hotels, which either have to contend with empty rooms or offer them at a large discount with a third-party website, can especially benefit from the arrangement, he said, and may be able to exchange stays for maintenance help or advertising.

An exchange's longevity is a good indicator that it won't suddenly close shop, leaving members with unused credits, said Cheryl Mera, president of the American Barter Exchange. Good communication is also key, since barter exchanges can help members spend their credits.

"It’s a problem sometimes, when people get frustrated and say they can’t spend their money, it’s because they’ve done so much trading so quickly that all of a sudden, they’re looking at a $10,000, $15,000 balance and say, OK, I want to spend it in the next two weeks," Mera said. "It’s unrealistic. ...You have a take a different approach with barter than cash. You earn it wisely and spend it wisely."

Mera pointed to an example of a mechanic in her exchange who racked up about $20,000 worth of credits but struggled to use it right away. Then, his daughter's wedding had to be moved up, and he quickly used his balance to pay for a limo, photographers, and even to deep clean his carpet.

"I tell people that barter is not a department store," she said. "It’s a fun way to do business, but you have to be slightly flexible. If you want to join a barter exchange to barter for a Rolex watch, then barter is not for you, but if you’re looking to save money and you’re willing to be a little flexible and sometimes a little creative" it can be a useful tool.

Clay Yalof, president of the Connecticut-based Barter Network, echoed that advice. His network represents 750 to 1,000 clients, and they take care to ensure everyone has something they can receive in return, he said. If it works like it should, it can help companies stay afloat.

"You have to find the right clients and have the right services to offer," Yalof said. "We help some of them stay in business. We have probably 60 to 70 restaurants we represent and probably some of them would not be in business if not for barter. They use it on things like pest control, degreasing, advertising, printing, all these things that have cash value to them."

Paul McCormack, owner of Chem-Dry of New York, a Massapequa-based carpet and upholstery repair and cleaning service, said he’s experienced the benefits firsthand.

He’s used his barter credits for advertising, yes, but he was also able to barter for an entire cosmetic dental procedure. "When you finally get an outlet, it’s like a kid in a candy store," he said.

It’s also a way to get closer to the community, Sasso added. A good exchange will have a personal relationship with the clients it represents. "That’s the power of barter because it’s grassroots, and we are neighbors," she said. "We think of what we can do for them, and they can feel it."

Mera said she believes we’ll be seeing more of the practice, especially if the pandemic ticks on. At the beginning of lockdown, businesses were wary of bartering, she said, though she’s seeing that start to lift a bit. A bartering slowdown during an economic downturn is not all that uncommon, Yalof said. "I think it’s a misconception that people think that when things are tough people want to barter, because the business itself has to have the financial wherewithal to barter," he said.

But necessity could still win the day, said Mera. "Yes, cash is king," she said, "however, you may not always have that cash."

By Laura Albanese

laura.albanese@newsday.com@AlbaneseLaura

Laura Albanese is a reporter, feature writer and columnist covering local professional sports teams; she began at Newsday in 2007 as an intern.