Exchanges: Bartering & Bargaining in the Middle of the World
During the fall of 1997, I sojourned to Ecuador upon receiving a fellowship to conduct research on Sustainable Development, from the International Studies Program at the City College of New York. I lodged in the capital city of Quito with a local family, while taking classes at a university with other exchange students from the United States, Germany, Spain and other countries.
While visiting Mitad del Mundo (the middle of the world) – the point where the equator traverses the Ecuador – I went to Otavalo, an indigenous town and marketplace one hour north of Quito where one can buy local arts and crafts, and as I would discover, barter your jeans and sneakers for local merchandise. It was at Otavalo where I unintentionally discovered the world of barter.
Barter Spawned By Necessity
Ecuador is an amazing country. It is endowed with an impressive amalgam of flora, fauna, ethnic groups, and boasts four distinct geographic regions, including the Sierra or Andes highlands region where I would make my very first barter deal. Bartering (referred to as el trueque or intercambio) in Ecuador is an ancient but vanishing craft, although many ordinary citizens have resorted to bartering again because of their country’s economic woes. Like many “developing” countries, Ecuador faced severe sociopolitical and economic challenges particularly in the 1980s and 1990s that made bartering a necessity.
In Quito, for example, one can see the results of this situation on the faces of the many rural (largely indigenous) migrants who line the city’s streets hustling, begging for money, food, shelter, clothing and jobs. Furthermore, with a very high rate of unemployment, a slow business climate, and one of the worlds most unfavorable exchange rates (about 6000 sucres to one dollar in 1997 and 25, 000 sucres per U.S. dollar when the Dollar replaced the sucre as a national currency in September of 2000), barter would resurge all over the country.
People in several neighborhoods in Quito organized barter events to exchange goods and services. A poor campesino (farmer) would offer to cut the lawn of a wealthy Quito norteño (a northerner – the north of Quito being the wealthiest part of the city) in exchange for a decent pair of shoes for his daughter to wear to school; a migrant from the Amazon would trade her services as an empleada (maid) in exchange for temporary housing in the city.
Opportunities for bartering and bargaining in Ecuador can be found at a feria (market place or fair), seven days a week in scores of large and small villages throughout the Sierra. Among the most popular markets are the Saturday feria in Otavalo in the Plaza de Ponchos, which boasts over 500 stalls (of mainly textile merchants), frequented by thousands of foreign and local tourists buying, bargaining, bartering and interacting with indigenous merchants.
The Otavaleños are recognizable by their native attire and bodily adornments: the women sport beaded necklaces and bracelets. They usually have long, straight black hair, and often carry their infants wrapped around their backs. They conduct trade in Spanish, Quichua, Aymara and other native languages, while others speak some English.
The Otavaleños are the most well known entrepreneurs in Ecuador and Latin America in general. They have taken their renowned textile weaving skills and merchandise abroad to cities like New York and Paris.
Bargaining and bartering in Otavalo is easier because the Otavaleños produce everything that they sell, unlike the smaller markets that often purchase raw material and finished merchandise from Otavalo producers. The latter produce textiles from their own llamas and sheep, which they sew by hand into finished products at small family settings, or with modern machinery in textile factories owned by indigenous collectives.
While Otavalo dominates the textile markets, other smaller local markets specialize in native arts and craft. In these mini-markets, traders and buyers often engage in produce-for-produce rather than cash-for-produce transactions.
On a weekend trip to a feria in Otavalo, I realized my first barter trade quite by chance. Most of the other exchange students had disposable cash and spent hundreds of dollars on recuerdos (souvenirs) such as stone-crafted items, silver jewelry, and llama skin rugs.
I really wanted to take back some Ecuadorian recuerdos to the States, but I did not have the money like my friends to buy much; it pained me to walk around the feria looking at such rich cultural merchandise, and not being able to purchase any. Then I remembered from my Principles of Business class in high school how native cultures traded through barter before the introduction of money. I decided to try it out.
I approached several vendors in the Otavalo market to see if they would trade whatever they wanted from my backpack for some of their merchandise. While some said “no” flat out, others seemed interested, but reluctant.
Some said that they would bargain, or take half in cash, and the other half in trade. That sounded like a good idea. However, the problem was that I had but a few dollars for food, so I could not do a half and half deal. It was all barter or nothing. It is more difficult to do a strait barter deal in the larger markets like Otavalo, simply because the merchants are used to cash payments for their merchandise.
Just when I was about to call it quits and return to my hotel room for the evening, I stopped at the last stall in the market. It was run by a Quichua family of five…a husband, his wife and three young children. Their stall was beautifully decorated with llama skins featuring images of animals such as lions, bears, unicorns, and doves. They also sold Incan stone carvings and sweaters made of llama and sheep’s wool.
I decided to try a different approach; whereas, with the first merchants, I got straight down to business with my barter pitch, this time I spoke to them on a personal level first. We conversed about Ecuador, American culture, and about life in the marketplace. This strategy taught me a valuable lesson as to the importance of friendship, trust, and respect as precursors to conducting business in Latin America. Trade is often conducted only after matters of family and social issues are discussed.
My break came when the merchant asked to see the walkman that was hanging from my neck. I gave him my walkman to listen to with the Bob Marley cassette that was playing. He was very fascinated with the music, checked out the radio stations on the dial, and gave it to his wife and kids to listen to. Since he liked it so much, I offered to trade the walkman for a llama skin rug with the unicorn, which cost about $120.
He called his wife to see if she would concur, and she did. The next step was to establish the value of my walkman to their $120 rug. This posed a problem for me because my walkman was used and was not worth more than $25. While they had no way of knowing the real cost of the item, I wanted to be fair. I told them that it was not comparable in price, but in value to the llama skin.
The merchant did not buy this reasoning, and wanted something more for the trade. He pointed to the compass/watch strapped to my wrist, and said that he would trade for both the walkman and the watch. Initially I declined, since I did not like the idea of being in a foreign country without a time peace or compass. However, I came to my senses and agreed that, while I could always buy another watch back home, I would be hard pressed to get a llama skin rug at such a reasonable price in the States. The deal was sealed.
We shook hands on the trade, and I even posed for a photograph. I knew that someday I would want to recount this experience and wanted proof of my first barter deal. They invited me to return the next market day with any American brand of clothing or electronics (which is expensive in Ecuador) that I wanted to barter, I was quite excited by the proposition.
The Makings Of A Barterer
The following week, I returned with my backpack filled with things that I did not want to take back to the states, but that were in good, tradable condition. I opened my backpack and spread it out on the ground for the vendors to inspect the merchandise. They took some of my best jeans, some t-shirts, canned food, an electric shaver and other personal items.
I picked out items of llama skin, sweaters, stone carvings, arts and craft that I wanted. It was a smoother trading than the previous week. When other neighboring vendors saw that we were trading, they came over and started going through my backpack, trying on my clothing, and offering their crafts to me on trade.
These items included traditional ceramic and wooden musical instruments, Andean music, stone carvings, semi-precious and precious metal jewelry, rope and string bags made from cabuya (agave fibers), beaded necklaces and bracelets, bags, sandals, hand woven ponchos and chompas (sweaters) and indigenous art depicting the lush Andean mountainsides, volcanoes, campesinos (farmers), llamas, haciendas, and market scenes.
All of a sudden, everyone wanted to trade with me when no one would at first. I was in a good position. It was a win-win situation for all parties. The natives got items of clothing and electronics that were out of their reach financially, and I got some exotic items that had great cultural value.
Soon, word got out among the other exchange students that I was the “barter guru.” Students started coming to me with things that they wanted to trade. I was in a position to act as a “barter broker,” given my negotiating and barter-deal-making success in Otavalo, and that I managed Spanish better than many of the other exchange students. They gave me lists of things that they wanted on trade.
Many vendors in the Otavalo market also gave me their own barter wish lists of goods they wanted from the exchange students. For the next couple of days, I would load up my backpack and barter lists, and head out to the ferias, returning with most of the items requested, to the delight of my “clients.” Had I known of trade exchanges back then, I would have started one in Ecuador.
When one goes to a feria, you should expect to bargain whatever price is quoted to you. It is not considered disrespectful. In fact, it is expected. Bargaining is an art, a means of cultural interaction, and is an integral part of the market culture. It is not uncommon to pay 75% of the price originally quoted for a product after bargaining with a merchant.
Often, you will suggest your “last” price, and the merchant will decline, only to call you back and settle on your price or come to a compromise as you are getting ready to walk away or proceed to another stall. After a friendly handshake, gracias and adios, you leave the merchant with a smile on his/her face for having sold their handiwork, and one on yours for feeling like the world’s greatest bargainer.
In subsequent years, I returned to Ecuador and Peru to pursue not only research, but to seek out barter deals and bargains. I also traded coins and paper currency with local numismatists. In the process, I made many friends and trading partners, and found a new way of doing business that I would later incorporate into my entrepreneurial ventures.
about us | about b meyer | from the desk of | contact us | issues | back issues | consulting services | entrepreneurs package | Competitve Edge | FastStart | order | classified advertising | affilates | banner ads | first time visitors | travel section | media section | trade exchange section | corporate barter section | countertrade section | secondary capital section | real estate section | trade exchange news 2005 | marketplace | community barter section | restaurant & entertainment section | USA barter companies | global barter companies | trade exchange owners | sponsors | tuesday report | 2005 Tuesday Reports | 2004 Tuesday Reports | 2003 Tuesday Reports | 2002 Tuesday Reports | 2001 Tuesday Reports | 2000 Tuesday Reports | 1999 Tuesday Reports