ELMSFORD — Cash will always be king, but a local bartering network is helping businesses trade goods and services without spending a cent.
The Hudson Barter Exchange recently celebrated its fifth anniversary in one of the toughest economies in U.S. history and managed to grow from 100 initial members to about 520 today. The exchange traded bartering valued at more than $2.5 million last year and this year its average monthly barter trading is valued at about $350,000.
Kevin Brown, Hudson Barter Exchange’s chief executive officer, said his members are willing to barter because most of them have excess capacity that isn’t generating revenue and because the exchange promotes members to each other and facilitates trades.
“Most companies are working at 80 percent capacity. The other 20 percent of their capacity, whether it’s empty chairs in a restaurant, open appointment slots, unfilled calendar time, excess inventory; these are all expiring assets. An empty seat tonight doesn’t earn you anything and it’s gone tomorrow,” said Brown, 51, of Tarrytown. “The exchange brings you incremental business you wouldn’t get otherwise to turn your expiring asset into a valuable asset.”
The bartering is cashless, but it costs $349 for a lifetime membership to the Hudson Barter Exchange, along with a 7 percent transaction fee on every trade based on a company’s standard rates, plus a monthly fee of $19 cash and 19 barter dollars after six months.
The barter dollars go into a member’s online account after a member performs a service. After the barter dollars are logged in a member’s account, they can be used to purchase goods or a service from another exchange member. Members trade their services at their standard rates with exchange members. Once they build up barter dollars they can buy any service, so an attorney getting landscaping through the exchange didn’t necessarily perform legal work for that landscaper.
The government treats bartering as a cash transaction for tax purposes. The exchange sends its members a 1099B barter proceeds form in February for tax reporting.