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Are Barter Sites Right for You?

Online bartering sites want to change how consumers shop.

Don't want it? Swap it. Or so says a growing number of entrepreneurs running sites that let people swap all kinds of stuff. Bartering is the oldest business practice around, and a handful of swap sites arose during the dotcom era. Most didn't survive. Now the sector is re-energized, thanks to better technology and shrewder online shoppers who have accumulated stuff they no longer want or need. "The model was around a long time ago-it's just re-emerged now because of the flood of DVDs, CDs and media," says Bob Alvin, 48, founder of Los Gatos, California-based BarterBee, a six-employee site launched in 2005 that specializes in online trades of CDs, DVDs and video games.

Numbers revealing the size and potential of the swap sector are hard to find. Talk to "swapreneurs," however, and they'll tell you they're on a mission to change the world of buying and selling. "In the way eBay changed the fabric of society, we have the same opportunity to do that," says Jessica Hardwick, 39, co-founder and CEO of Sili-con Valley-based SwapThing, a year-old swap site whose sales-which are earned through transaction fees-will approach $1 million this year. SwapThing's membership base is growing 40 percent a month, and the company boasts a growing list of professional services up for swap, from haircuts to innovation consulting.

Still, swap sites face challenges. Shipping and geography can prohibit some trades. Users must also spend time matching up trades that aren't equal in value. But the hurdles aren't stopping swapreneurs, who are in a fast and furious race to become the eBay of barter. It's anyone's guess who will take the lead, but swap sites are betting that people's love of stuff will drive them toward the online swap marketplace. "I think everyone at heart is a bargain shopper," Alvin says. "[Swapping] is a valid [business] model."

This story appears in the October 2006 issue of Entrepreneur. Subscribe »

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