By ERIC C. RODENBERG
Antique Week Associate Editor

Selling antiques in an economy where much of the middle class is cash strapped is no picnic as many dealers have discovered.

However, some veteran dealers have found new life by choosing the oldest trading system known to mankind – bartering.

“It saved my life,” said Guy Ferraro, of Atlantis Antiques International in West Haven, Conn. “Bartering has saved my life and my family’s life.”

Ferraro has been an antique dealer for 37 years. He specializes in American and European coins, paper money and flatware, in addition to selling English and American antiques. He also designs many of his own replicas of custom cast iron pieces and teak garden furniture and accessories, personally overseeing much of the manufacturing.

“This is what I do, and what I have done all my life,” he said. “We had a pretty decent life for several years. We’ve done well. But, then when everything started falling off the face of the Earth … about three-and-a-half years ago, everything changed.”

Atlantis Antiques saw sales drop from 50-60 a month, to “maybe three a month,” he said. “We’re not a little shop – about 3,500 square feet – but the general merchandise market just collapsed.”

While scrambling to make ends meet, Ferraro joined a bartering group. He’s traded some of his inventory for dental work, women’s fashion pieces (for his wife and daughters), car tires, carpentry and he estimates 40 percent of the food he and his family consume. He has also bartered goods from his store for advertising, which in turn created the necessary cash sales.

“You know, not everyone will barter,” he said. “Like the electric company, and you have to generate cash … but it (bartering) has literally kept me from going under,” Ferraro explained. “It kept us afloat; it still keeps us afloat. Bartering has opened us up to more customers … I would have had to liquidate everything, and I know I would have taken a beating. I could have taken my inventory to the best auction house around, and I know I would have only gotten about 10 cents on the dollar.”

In its simplest form, bartering involves an equal trade; a business swaps a good or service for another. The history of bartering has been traced back to 6000 B.C., back to the early tribes of Mesopotamia. Throughout the ensuring centuries bartering held societies together, as the commodities went through ever-changing cycles: From weapons, to tea and spices, and more commonly food items.

In America, the colonists subsisted on the bartering of wheat, deer hides, musket balls and, of course, livestock. In the early years at Harvard University, tuition was often paid by food items, firewood or farm animals.

At another time when money became scarce, the Great Depression of the 1930s, survival-based bartering systems were developed.

Today, there are several companies which act as third-party agents to facilitate trading. They bring traders together, establish a common denominator for trade and monitor the system to ensure that all transactions employ “fair trade.” These agencies act as “banks” where people maintain their accounts.
These companies – such as the International Monetary System (IMS) – usually charge a membership fee, and commission fee for facilitating trades. Several such companies can be found on the Internet. IMS has been in business for 26 years.

Here’s how it works, according to Donald F. Mardak, CEO of IMS: A business lists a good or service for trade through the barter exchange. In return, the business receives a trade credit based on the dollar value of the good or service offered. It can then use those trade credits to “purchase” good or services offered by other members. For example an accountant may charge $100 an hour for his services. Should he see something that intrigues him within a bartering antique store – say a Mission-style wrought iron chandelier for $300 – he will trade three hours of his service for the item.  “We don’t usually dicker on the prices,” Ferraro said. “That way I get my retail asking price, and the professional – if it’s that kind of trade – gets full value for his work.”

Antique dealer Mark Rothe, owner of American Antiques and Jewelry in Green Bay, Wis., has been a barterer for 25 years. “We do a lot of business, about $1.5 million a year,” Rothe said, “but I barter about $50,000-75,000 a year. It kept me in business … during the early years, I needed child care. I couldn’t afford it then, so I bartered for the service. It allowed me to stay in business.
“As an antique dealer I’ve got trading on my mind. It’s natural to me. But, a lot of people out there are missing the boat. I’m in business to make money, and you don’t adapt to the times you’re not going to survive.”

Rothe’s business recently did a renovation. He got the electrician, plumber and contractor on trades. He’s also been able to “leverage” some of his trades for more advertising, which he believes has made his business grow.

“Last year I spent $108,000 in trade dollars for advertising,” he said. “There’s no way I could have done that otherwise. But, that advertising attracted cash. And it allowed my business to grow, and growing my business is the most important thing – for me and my family.”

Barterers need to be aware that the Internal Revenue Service views bartering and cash transactions as the same.

Both are taxed equally. In fact, bartering exchanges must report goods and services sold through barter to the IRS. “More people need to be doing this,” Rothe said. “I think that people just don’t understand how it works.”
“Antique dealers, especially, need to know about this,” Ferraro added. “I know dealers who have gone out of business … I would like to help any of my fellow dealers … it takes a little bit of an understanding. I would be very, very happy to speak to anyone about this … it’s something everyone should be doing – especially in these times.”

To contact Ferraro, call 203-937-1233 or visit him online at www.atlantisantiquesintl.com