by Bob Meyer, Editor of BarterNews
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will never be sold, traded, or given to another party.
Look Back...The Rich & Famous Used Barter To Get Started
Was The Start For International Deal-Maker
85-year old founder of International Lease Finance of Beverly Hills,
started his business career after spending a part of World War II
in a labor camp in Nazi-occupied Hungary. From there he emigrated
to Venezuela where he scored his first business success trading
costume jewelry with Indians in the jungle.
He used the
profits to invest in Venezuelan real estate and launch his own construction
firm before expanding into the U.S. where he built an independent
chain of gas stations in Southern California.
Lease Finance now places orders in the billions for the latest in
passenger jets, which are then leased to major international and
* * *
Actor Used What He Had To Get What He Wanted
ago when Hollywood superstar actor and producer Sidney Poitier first
arrived in New York City, it was by bus with $3 in this pocket.
He slept on the roof of the Brill Building and got a job washing
with the help of an old waiter at the restaurant where he worked,
he made a trade with the American Negro Theatre. They took him on
as a student when he agreed to become their janitor.
* * *
Analyst Bartered For His Luxurious $500,000 Bus
best-known “non-flier” is football analyst John Madden.
Back in 1986, on a national TV program he discussed his aversion
to flying, saying he was “thinking about getting a bus.”
Greyhound Lines’ public relations man, heard Madden’s
comments, and spotted an opening to bring his company some valuable
P.R. The result: Greyhound seized the opportunity, received millions
of dollars worth of press coverage (at no cost), and secured Madden’s
services for the next three years in exchange for one of Greyhound’s
Madden the plush bus with special modifications for his cross-country
travel, worth about $500,000 at the time. In exchange Madden agreed
to give motivational talks to Greyhound employees in the major cities
he passed through during the football season. Madden had to make
30 talks per year for three years...and the luxurious bus was his
free and clear.
* * *
Man Became Billionaire With Barter Assist
In 1989 Forbes
magazine estimated Marvin Schwan’s net worth at $1 billion.
Operating in almost total obscurity in Marshall (MN) Sales Enterprises
was totally owned by the 60-year-old Schwan. He had built a national
door-to-door frozen food delivery company, serving mostly rural
households in 49 states.
owned three frozen pizza companies that sold to supermarkets, convenience
stores, school lunch programs, hospitals, military bases, and the
like. (A list of his many other enterprises would take several more
It was during
the 1980s that Schwan attacked the $500 million school lunch frozen
pizza market in a very creative way. At the time, to work off huge
stockpiles of cheese, the Department of Agriculture gave the nation’s
public schools the stuff...free of charge. To Schwan, the cheese
looked like an opportunity.
In 1984 he won
hundreds of school lunch pizza contracts by offering discounts in
exchange for their government cheese allotments! But by 1989 the
federal cheese stocks were nearly exhausted. No problem. There was
a flour surplus. So Schwan set up a pasta company and contracted
to sell discounted pasta entrees to schools in exchange for the
government flour credits.
we have here is a failure to communicate!”
Years ago, one
of the most visible people in the barter industry said the #1 reason
why the industry wasn’t farther along in its development was
due to a “failure to communicate” by those in the business.
was the genesis of The Competitive Edge newsletter, now
into its 18th year of publication. Trade exchange owners who use
this powerful marketing and promotional tool are never guilty of
“failing to communicate.”
As the owner
of a trade exchange you must stay in front of your clients. Informing,
educating, and inspiring them, because your clients’ bartering
is a relatively small percentage of their overall business. So if
you don’t keep their interest and enthusiasm for trade at
a high level, you lose.
aim, like all other businesses, is to get your clients coming back
for more. Every extraordinary business (and every trade exchange
owner who wants to be extraordinary) knows that the customer you
have, is a lot less expensive to sell than the customer you don’t
Want to take
your exchange to a higher level? Use The Competitive Edge
newsletter in your operation—it “sells” the many
benefits of working through your trade exchange like nothing else!
learn more about The Competitive Edge newsletter and how
it can help build your trade exchange, click
the Archives of BarterNews...
Benefit When Working With A Barter Organization
George Otras, VP, Active Media Services
from each hotel room represents a significant amount of money to
a hotel. It is the revenue back-bone, and biggest money maker for
any chain or individual property.
if unutilized, the vacant room contributes nothing to the bottomline.
Simple economics determine that the empty room is invested dollars
producing no income; it is essentially an untapped, non-producing
worth isn’t going to buy the necessary cash purchases, both
goods and services, that the hotel needs to keep the property well
promoted, well furnished, and financially alive.
convincingly argue that hotels which are at peak capacity or near
peak capacity have no need for bartering room-nights. How many hotels
can make this claim year-round?
number of properties and chains have been awakened to the practicality
of bartering empty rooms for supplies or other cash expenditures
in the service sector, namely advertising and promotion.
is nothing new to the hotel business. For many years hotels have
set up cross purchasing agreements (or “contra” accounts)
with suppliers in exchange for accommodations at other participating
hotels, or in exchange for goods and services.
keep running balances on what each party has used from the other.
A difficulty arises when desirability or suitability of the product
and/or service involved is not what the other party wants or needs.
of a third party organization, whose exclusive business is facilitating
trading between hundreds of parties, enables the typical trading
partner, or hotel, to eliminate this drawback. Aside from eliminating
the added expense of maintaining a barter department, the hotel
has access to the barter organization's computer-based network of
media clients, service clients and manufacturing clients.
The barter company
has “steering power” which increases the hotel's market
share of a barter company's client travel spending that they would
never have realized otherwise.
This is clientele
which spends cash in restaurants, gift shops, at a golf course,
at a spa, for telephone charges, video rental, and numerous other
areas within the property...especially since they have more disposable
dollars available as their room-stay is obtained on trade.
the integrity of a hotel's rate structure is protected since no
discounting occurs in the remarketing of the hotel credits, because
they are being traded and not sold into a trading community.
a barter organization enables the typical hotel to barter for a
wider variety of services, be it advertising, contract work, office
supplies, rent-a-car vouchers, or printing, etc. This type of operation
prevents the hotel from having a liquidity problem with its barter
credits, since the barter company has a wealth of goods and services
to offer—more so than any bilateral arrangement developed
by the property.
also creates a tremendous word-of-mouth following which is communicated
to business associates and others, the price of which is invaluable.
A pleasant stay at a property creates a following and a loyalty
to that particular property which remains long after the individual
runs out of barter credit. The exposure factor of getting live bodies
into a hotel to sample the accommodations must be welcome new business.
management who appreciate the benefits of bartering have recognized
the necessity of these programs, in weak and strong economies alike.
The evidence for this is the continued usage of barter programs
and their successes. Programs can be designed to avoid peak period
usage by barter clients. This way marketing people can avoid losing
any available room nights during heavy convention or weekend periods.
AMS is one barter
company that has pioneered hotel trading programs, with enlightened
management of major hotel chains during periods of explosive growth
and restructuring. These progressive and innovative programs were
developed by people with decades of experience in hotel room trading.
The major emphasis of all of these programs has been designed to
ensure the following points:
- The client
maintains complete control of the transaction.
- The programs
are directed towards both revenue and profit generating.
- The program
is designed to meet clients' individual specifications.
turn-key operation—administration, execution, billing, audit,
- No fee programs.
hotel credit remarketing.
media, goods and service delivery.
New Money-Making Ideas And Valuable Contacts!
You can obtain
useful, informative ideas and contacts in every available back-issue
barter company in the world is listed on our web site,
click through to our Global List
of Barter Companies.
Monetary Systems (OTCBB:INLM) enrolled 1,049 new clients through
its outside sales team for Continental Trade Exchange, and added
another 1,240 members through two acquisitions in the 2004 calendar
year. CEO Don Mardak stressed, “These numbers represent
a very dramatic increase in new-client sales. Also quite significant
is that they are not just in one or two areas, but cover the entire
spectrum of the 25 markets that we now serve.”
- ICON International,
a corporate barter company that pioneered real estate transactions
in the barter industry (leases, sale-leasebacks, restructuring
synthetic leases, and purchases), has hired James R. Tully for
the position of VP Director of Real Estate. He was formerly a
VP at CB Richard Ellis, a global leader in real estate services.
ICON is a subsidiary of Omnicom Group (NYSE:OMC). For more information
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- The next
time you’re drinking your Starbucks, or feeling a bit sorry
for yourself, consider that almost 3 billion people live on $2.15
or less per day...according to the United Nations’ Millennium
- The world’s
most recognized and valuable brand is Coca Cola. What does Coke
spend a year on their marketing efforts? In 2005 its advertising
efforts are expected to top $2 billion.
- Many hoteliers
in Phuket, Thailand, (where beaches and facilities are largely
back to normal after the tsunami) are offering guests free meals
and free massages in an effort to raise occupancy rates from the
present 10% average.
- The International
Energy Agency, a Paris-based advisory group to 26 industrialized
countries, says crude oil prices might surge again this year if
global demand does not slow down, because the world still lacks
sufficient production and refining capacity. Demand this year
is expected to reach 83.9 million barrels daily...up 1.4 million
barrels from last year.