November 4, 2004
SERVICE IN BUSINESS OF TRADE EXCHANGE

As a member of the Barter Depot, whenever Garden State Flower Market owner Nancy Petrellese needs a service, she can get it without spending cash. Instead, she pays by providing the service she has for the past eight yearswith her husband and business partner, Ralph Petrallese.

Nancy Petrellese has been a member of the Barter Depot, Jackson NJ , since it opened eight years ago. Barter Depot President Joe Prince said it's credible clients such as the Garden State Flower Market that makes his bartering business a success. Prince said the Barter Depot is the largest trade exchange in New Jersey, with about 1,000 members hailing from throughout the state.

Prince said the barter business functions like its own economy. The members provide professional services for each other without spending cash and the Barter Depot acts as the middleman.

"Cash is king, don't get me wrong," Prince said. "But a lot of businesses in the Barter Depot don't have all of that extra cash."

Barter Depot earns a 12.5 percent commission from the money members spend in the network. Members also pay a $ 125.00 annual membership fee to Barter Depot, which is affiliated with the National Association of Trade Exchanges.Barter Depot is hosting its eighth annual exposition for its members Nov. 21 at the Raritan Expo Center in Edison. Prince said the event provides a venue for Barter Depot members to take advantage of the network.

Ralph Petrellese said his wife, in being a member of Barter Depot, has opened up the Garden State Flower Market to new clients. "You get the business you might not normally get," Petrellese said. "Somebody comes to the door, let's say Joe referred him, so they're obviously looking for flowers. And there are times when she would need some service from Joe's customers that she wouldn't have to pay cash for."

Prince said he understands business because he is a former restaurant owner and barter company member from Connecticut. He said that when he realized how much potential the barter industry had, he went into business for himself. He started up in New Jersey and made Hired a Sales Staff Which Is Run By Tom Sita to attract new members.

Sita, who oversees the new member development department of Barter Depot, said joining the company's network behooves new and old businesses.
"You just have to be flexible," Sita said.
For more information call (800) 9-BARTER

LOCAL NEWS
Companies tight on cash, seeking new customers, check out bartering

Monday, March 12, 2007
By HEATHER HADDON
HERALD NEWS

ELIZABETH LARA / HERALD NEWS
Z the clown, aka Regina Oldham-Licata, makes a balloon animal for Nikki Brandt, 5, right, at the IHOP on Broad Street in Bloomfield. Professional clowns are among those using the Barter Depot to trade services for goods.

Not long ago, some strange currency was appearing at the Bel Vedere Restaurant, a posh eatery in Clifton.

Diners were presenting gray "Barter Depot" checks instead of credit cards or cash, and the wait staff was puzzled. But not the owner. Vincent Arcangelo, the proprietor for 23 years, announced that the Bel Vedere would now honor what the U.S. Treasurer doesn't -- promises of services in exchange for a pricey meal.

The Bel Vedere belongs to Barter Depot, an online service based in Jackson, that facilitates the exchange of goods and services between businesses. The program greatly amplifies what many companies already do if cash is tight: exchange services.

You give me a pair of your snakeskin boots, for example, and I'll let you ride in my limo.
Arcangelo has used Barter Depot for a year, and is sold. "I've found my dessert company through this. And I used a dentist," said Arcangelo, 46, standing behind the granite bar in a bow tie.

The service does come at a price. The nearly 1,500 members -- ranging from Clifton chiropractors to Bergen County gyms -- pay a $395 subscription fee, annual dues of $250, and a 12.5 percent charge on the value of the goods they exchange.

Most participants say it's worth it. The costs are quickly recouped in new clients and additional exposure, and they like the access to trustworthy services. Members are screened and the disreputable are tossed out.

The service doesn't benefit every type of business. Some struggle to find things they want to barter for. But Barter Depot has enough variety to oversee more than $10 million in trade a year, according to company estimates.

"Where do I even start?" asked Tony Zizzo, owner of a Haledon auto shop, about his three years with Barter Depot. Zizzo, 53, has exchanged engine overhauls and lube jobs for catering, gutter work, and flowers for when "I screw up with my wife," he said.

In all, he's done $8,000 in reciprocal trade by working on cars for roughly 75 members. No cash is exchanged -- shop owners call one of Barter Depot's nine employees to deduct the bill from the customer's account, and add the equivalent to theirs. That translates into future flower arrangements for Zizzo, and referrals for cash customers. "You get their families, too," Zizzo said about Barter Depot clients.

Before currency was instituted, ancient cultures bartered furs, salts and spices. Today, individuals still do informal bartering like house swaps and child care exchanges. Businesses have bartered through third-party "reciprocal exchanges" for decades.

The Internet has greatly furthered the trend, said Krista Vardabash of the International Reciprocal Trade Association, a Rochester-based membership group. Bartering is especially attractive to startup companies, which are often cash poor.

"Businesses love it," Vardabash said. "They are able to get what they need without going into their cash reserves."

Roughly 500 barter companies oversaw $2.3 billion in trade within North America in 2004, the Trade Association found. Vardabash said those numbers have since grown significantly, and she anticipates "prolific" development in the next five years.

David Finegold, dean of the School of Management and Labor Relations at Rutgers University, doesn't think bartering would replace cash. But he does view it as another way that businesses are using novel networks to adapt to a competitive marketplace.

"A lot of this makes sense," said Finegold, who has found that biotech startups commonly barter expensive equipment.

Tom Sita, a former Paterson manufacturer, often bartered his company's window shades for goods. The Wayne resident was one of the first Barter Depot members when it started in 1995. Barter Depot's owner, a longtime friend of Sita's, invited him to help manage the company in 2002. Sita had no need for extra income, but gladly accepted the job to interact with other business owners.

"I spend my days eating at fine restaurants," said Sita, 53, who almost exclusively patronizes Barter Depot businesses.

Since joining, Arcangelo, of the Bel Vedere, has dished out homemade pasta in exchange for advertising and financial services. "It's a throwback to what our forefathers did," said Arcangelo.

Jeff Alba, of Western Boot World in Paramus, got a new sign for his business, a roof for his house and Nets tickets through Barter Depot. Rajesh Mahta, owner of a limo company in Clifton, just joined the service after years of bartering on his own. "There are zero drawbacks," said Mahta, 46. "Barter Depot just makes it official."

Some bartering services, however, aren't legitimate. Vardabash's organization monitors the industry, and she gets about a dozen complaints a year from business owners who suddenly found that their bartering service vanished.

"It's so easy to start an exchange," said Vardabash, who does not release names of the offending companies. "Someone could wake up one morning and open one."

The IRS looked warily on the industry in its early years. In 1982, Congress issued legislation requiring barter companies to follow accounting rules for stock traders. Participants must declare income earned from trade, and Sita said all of his members receive tax forms to do so.
Sita admits that not all businesses are suited to bartering. Others just don't find what they want -- for their business, or themselves. RoByn Thompson, who is professional clown known as "Moogie," joined Barter Depot six months ago. She supports the concept, but says it hasn't netted her new cash customers. Her one regular gig from the service just dropped off.

"It hasn't worked out as a well as I hoped," said Thompson, 43, of Passaic, who is testing a different service.

Zizzo, of Haledon, said he got ripped off from a roofer listed by Barter Depot. But after reporting it to the company, they quickly found him a new roofer and refunded his credit. "Putting out fires," as Sita put it, is part of what he does.

But dissatisfied customers are a rarity, and Barter Depot nets some 20 new members a month, Sita said. He must still fight fears that the service is a pyramid scheme, but Sita is confident that bartering will grow.

"Mom-and-pop places are getting more competition," he said. "They are looking for whatever edge they can get. Bartering can provide that."

Reach Heather Haddon at 973-569-7121 or haddon@northjersey.com.
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WHAT IS BARTER?
Bartering is centuries old, but the Internet has made it easier for people to trade what they have for what they want. Small businesses looking to swap goods now have hundreds of private bartering exchanges to choose from.

How does bartering work? On-line services are like a bank. A member provides goods or services for another participant. After the transaction, the provider reports the cost to the bartering company. The provider then receives a credit in his account, and the customer is debited. Members can patronize anyone in the exchange. There is no minimum or maximum bartering amount.

How do you join? The member must own a registered company and apply and be screened.
How much does it cost? At Barter Depot, members pay $395 to enroll, $250 annually and a 12.5 percent fee on the value of the goods provided.

What can you get? Services range from auto repair and health care, to travel packages and fine dining.

Is this legitimate? Since 1982, legislation designated bartering exchanges as the equivalent of stock trading companies. The government does not regulate them, but the IRS has forms to report bartering income. The International Reciprocal Trade Association acts as a watchdogfor the industry.

What are the benefits? Bartering is attractive to startup companies that have goods to exchange, but little cash. It can help established businesses attract new clients through increased exposure and referrals from barter members. Bartering is also a form of regional networking.

What are the drawbacks? Bartering doesn't work for every type of company, especially those with low profit margins or big-ticket items. Companies with unusual products or services might not see enough demand.

How do I find one? Contact the International Reciprocal Trade Association at www.irta.com. Barter Depot can be contacted at 800-9-Barter (800-922-7837).