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The weekly newsletter for everyone interested in barter--the world's most versatile business tool!

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January 25, 2000

In this week's report. . .

  • Heavy equipment web site has new twist
  • How to use marketing to your best advantage
  • Bartering here and there

$100 Billion In Used Heavy Equipment Target For New Web Site

Worldwide construction projects generate over $100 billion annually in used equipment (of which half is in the U.S.). New internet auction site AssetLine.com out of Lowell (MA) feels it has the model to move much of the used equipment.

According to Dominic Johnson, CEO of AssetLine.com, most internet auction sites assume that if you bring enough buyers and sellers together there will be resultant transactions. But Johnson claims that's not so when big ticket items such as construction equipment are involved, because of buyer uncertainty.

Johnson says the function needed in the auction setting (which all other heavy equipment internet auction sites lack) is the appraisal. In short, once an objective appraisal takes place and is accepted by the buyers, the bidding prices converge more quickly into a successful transaction.

Just as financial capital moves around worldwide to be invested in the best-yielding investments for the risk, Johnson says, so will large physical assets such as construction equipment with the help of the internet and AssetLine.com.

(He developed the answer while a stockbroker for emerging markets' securities with Jardine Fleming in Hong Kong, the largest stockbroker in Asia.)


Focus Your Marketing Efforts, Cash & Trade, Where They Will Do The Most Good

It's not unusual for 70 to 80 percent of a firm's cash business to come from 10 to 20 percent of its customers-often referred to as "A" customers. Yet don't confuse your "A" customers as being only cash customers.

What is an "A" customer for your firm? Each business needs to develop a specific profile of its best and most profitable customer. High volume is a major ranking criterion. But be prepared to downgrade the slow-paying big spender who consistently demands extra discounts and services.

Take another look at your customer base. How many "A"s can you identify? Where are your potential "A"s? What strategies can be developed to keep them coming to you? And what can you be doing to secure additional candidates?

This is more than a time-management exercise. It involves rethinking your overall strategic plan. A firm must keep asking itself which category of clients is most important for both short-term and long-term survival.

An ideal "A" customer is one who makes the most significant contributions to your bottomline. This is where your barter customers contribute heavily because their trade business is incremental business...extra business that can be the most profitable.

It's often the frosting-on-the-cake, so to speak. Sometimes this customer receives a lower level of service because he or she is not demanding, and the business is considered "only trade." Yet, when properly analyzed, their business may place them up there in the "A" category, because they contribute heavily to your bottomline profits.

A good marketing plan always looks forward. In addition to examining the direction your industry is taking, ask yourself, "What am I doing to incorporate the world's fastest growing way-of-doing-business into my organization's plans?"

A solid marketing plan identifies growth opportunities, as well as innovative techniques. Barter is a marketing, purchasing, and financing tool that offers you enormous profit opportunities. Your decisions should be driven by such present and future opportunities.

So bring your employees (or team members) together and see how close they can come to designing the perfect "A" customer. Write down all the criteria that is important to your company's future.

Use your imagination to develop this mythical entity, and you will make some interesting discoveries. Plus you will develop a benchmark that allows you to see all your customers, whether cash or trade, in a new way. Then focus your marketing efforts where they will do the most good, stabilizing and increasing your customer base.


Here & There

  • James Cramer, co-founder and contributing editor of financial-information web site TheStreet.com, has agreed to a trade...30,000 options, exercisable at today's price which will fully vest in one year, instead of a $275,000 salary.
  • Ashford.com, the Houston-based online jewelry and watch retailer, is practicing some stealth "barter" marketing. The result will be huge exposure for the company during the coming Super Bowl on January 30.

    Singer/actress Faith Hill has agreed to wear the 15-carat Ashford diamond while singing the national anthem, bringing Ashford valuable exposure during the pre-game broadcast. Millions will see the gem, as Ashford.com is mentioned by the announcers during the one minute anthem.

    Meanwhile advertisers are paying as much as $2.5 million for a 30-second TV spot during the football broadcast.
  • "Will program for food." Former Inc. magazine "Entrepreneur of the Year," Mitchell Kertzman, often bartered his talents for food in the early days when he launched the company that eventually became Powersoft...which he later sold for $950 million!
  • C-Tribe.com, a private San Francisco internet startup, offers its members the opportunity to bid for scrip (gift certificates) from various businesses (Tower Records, Blockbuster, Foot Locker) at a discounted price.

    C-Tribe partners with retailers and service providers and buys in bulk at a discount. Members can join any virtual buying group, and offers are made as a group. The larger the group the bigger the discount on the certificates, which are then mailed to the member.


We welcome your comments, questions, and observations.
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