Things are looking good for Swaptree, the online trading site that allows site users to swap books, DVDs, CDs and video games. Site co-founders, Greg Boesel and Mark Hexamer, had reason to celebrate when Swaptree officially turned one year old this past July. According to Hexamer, vice president of marketing, Swaptree currently conducts 2,000 daily trades and is growing at a rate of 30 percent per month.

Swaptree's CEO Boesel got the idea to create Swaptree in 2004. He and Hexamer, both avid readers, frequently swapped boxes of books. When they started working on Swaptree, Hexamer recalls it seems like everyone had a copy of "The Da Vinci Code." "Everybody was buying it," says Hexamer "even though 10 of their friends probably already had it on their shelf, and had already read it." At the same time, Netflix was taking off.

Hexamer says they looked at their own behavior of trading books, and thought "we are getting all the books we need just trading between us, what if we expanded that to trading with everybody on the internet?" Hexamer says they figured there were probably more copies of "The Da Vinci Code" in homes in a two block square radius of New York City at that time, than there were in the local bookstore. Boesel and Hexamer wondered "why, from an environmental perspective, are we buying books when we can just swap?"

Boesel and Hexamer left their jobs working on legal software and spent three years developing Swaptree. The company went public with its beta version of the site in July 2007.

Hexamer says Swaptree is different from other online trading sites because there are no points or ratings for items. All trades are instant trades. Also, there are no fees. Site users register for free and swap one item (e.g. book) for one item (e.g. DVD), paying only shipping costs for their traded item. To get an item on your want list, someone has to want an item on your have list. But that is not as difficult as it sounds. Algorithms incorporated into the site can negotiate 3 or 4 way trades, so users do not have to wait for direct trades.

Hexamer sees the simplicity of Swaptree's trading system as a draw for some professional online sellers. The site is designed for casual traders - people who want to trade items in their personal collection of books, DVDs, CDs and video games. But, Hexamer says, they are 99 percent positive that professional sellers are also using the site.

"We have a lot people who have a tremendous inventory of books on their have and their want lists," says Hexamer. Hexamer also notes that several users with large lists print their shipping labels on the eBay postage system. In the world of Swaptree, that is all fair. "I think (businesses) look at it as an opportunity," says Hexamer. "What they can do, is take a book that maybe isn't moving on eBay and they can move it on Swaptree, and get a book they know they can either sell at a higher cost, or will move quicker." Hexamer adds that Swaptree "is a really great way to get faster moving inventory."

Swaptree requires users to provide UPC or ISBN codes for listed items they have. Swaptree then uses the codes to calculate United States Postal Service shipping costs, and provides users with the option of printing postage directly from the site.

Like many Web sites, Swaptree survives on advertising revenue. Swaptree uses information collected from site users to provide targeted advertising opportunities to advertisers. "We know all the media that (site users) want and all the media they have,...If they have a lot of finance books, we can then show them an ad for E-trade," says Hexamer. Swaptree also uses mailing addresses of site users to target local advertising.

Looking ahead, Swaptree is hoping to include audio books as a new swap category. Swaptree is also hoping to expand green and social features. Users can already join groups in the Swaptree community based on a common interest or location. One Swaptree group is for "Moms with Toddlers." Another group has Swaptree members located in Boston. Swaptree group members participate in online discussions about their common interest and view the collective want and have lists of all group members. As Hexamer puts it, "it's like Facebook for your books."

Hexamer says they are also hoping to get to a point where Swaptree neighborhoods are set up in a similar way to Craigslist, so it will be easier for users to swap with local traders first, allowing users to get items faster and reduce carbon emissions associated with shipping.

Hexamer credits the social and environmental benefits of Swaptree as motivation for creating the site. Hexamer recalls he and Boesel looked at the idea of creating Swaptree and said "you know what? We are going to be saving people money, but we are also going to be saving trees from being chopped down and keeping things from landfills." Hexamer says, "I think that was very much what got us excited about the idea. At the end of the day, we knew would be working on idea that would be helping people save money and helping the environment."

In addition to attracting environmentally minded people, Hexamer also attributes a lot of Swaptree's success to the current state of the economy. Hexamer's comments echo those that many online sellers of previously-owned goods may be saying in the current marketplace. Hexamer says, "with economic times as they are, it is really good for us. We can see people referring their friends to us as a great way to save money."

http://www.swaptree.com