From the August 1999 issue of Startups

The Internet isn't only a global marketplace, it's a great place to barter. That's right, barter. Cash-strapped homebased business owners can now barter products, services, surplus inventory, excess production capacity and more, in exchange for needed services and supplies from other companies. And in the world of barter, anything goes.

Online bartering sites for small businesses are one of the Internet's best kept secrets, but not for long. Take Ubarter for instance, which will launch its updated, "super-charged" site (http://www.ubarter.com) in September. "Our new business allows users to browse and post items free of charge," says Steven White, the company's founder and CEO. "And with each item 'sold,' users receive 'Ubarter Dollars,' which can be used toward purchases of other goods and services posted." A transaction fee of 10 percent (5 percent for both the buyer and seller) is assessed with every sale.

Bartering involves clients selling products or services for "trade dollars," and, in turn, spending these trade dollars on products and services for which they would otherwise spend cash. This not only helps preserve cash flow, but can be use to unload extra inventory, take advantage of underutilized capacity, and help you avoid unnecessary financing.

Working with tight cash flow and competitive markets, many businesses routinely find ways to exchange goods and services rather than pay cash. What Ubarter and other barter sites do is expand "one-on-one" trading into a global "trade exchange," something every homebased business owner should investigate. The barter industry acts as a third-party recordkeeper of clients' transactions, issuing trade "dollars." A trade dollar is simply an account used to record the value of trades, as determined by the buying and selling parties. The industry uses a ratio of one trade dollar to one U.S. dollar.

There are no fees to join, browse or list items for sale on Ubarter. When applicable, Ubarter charges a small fee for credit-card payments.

Another excellent site is eBarter (http://www.ebarter.com), which offers a custom-tailored, interactive program to make trade transactions easy, with immediate confirmation of all trade activity. Any individual, sole proprietorship, partnership or corporation can become an eBarter member by filling out an online membership application and then visiting the eBarter "Trading Floor" to see what's available.

Like Ubarter, there are no application, monthly or renewal fees. There are, however, small transaction costs. You also get unlimited Web site advertising, and you can sell anything--old equipment, used office furniture, instructional software--not just goods and services, at the site's "BarterBoard."

Members sell goods and services, or even their time, at prevailing rates for eBarter credit with other members; however, taxes and gratuities must be paid in cash. The first 5,000 members to join eBarter will receive significantly discounted transaction fees.

Kurt Samson is a freelance business writer and public relations consultant in Annapolis, Maryland.