The weekly newsletter for everyone interested in barter--the world's most versatile business tool!
April 9, 2002
Barter Deals Expand 700% At Siebel
In the software industry barter deals are called "concurrent transactions," and they're quite common. Last week Siebel Systems reported their barter efforts accounted for $76.4 million, or 7.2% of its total software license revenue in 2001, up from $11.6 million, or 1% in the previous year.
The disclosure is the latest sign of a growing use of barter transactions, where typically a vendor and a customer agree to exchange/buy each other's products. Siebel says it's been aggressive in extracting revenue from business partners and using its clout to require partners to prove their commitment by using Siebel products. (Siebel does business with suppliers AT&T, Bank of America, and Cisco.)
CEO Tom Siebel says he discloses barter transactions because they follow a realistic and conservative interpretation of accounting rules. He also questions why other software companies don't disclose such transactions, which comes down to "a fundamental issue of transparency."
This example of barter between corporations points out the use of barter
goes far beyond that of the commercial barter industry, where companies
use trade exchanges and corporate barter companies as a middleman.
Barter On The Big Easy Is Coming
The National Association of Trade Exchanges will be holding their 26th Annual Convention in New Orleans next month...May 16-18. This year's focus, "How to make big money managing your business!" For more details go to: www.nate.org.
Surprise, Surprise...Workers Were Big Winners In the '90s!
A cover story in BusinessWeek showed that the big winners from the productivity boom in the '90s were the workers, who received 99% of the gains from faster productivity growth at non-financial corporations.
Low unemployment rates drove up wages, the education level of many Americans made an impressive leap in the '90s (putting them in a better position to qualify for the sorts of jobs that the New Economy created), and a torrent of foreign money ($1.3 trillion) coming into the U.S. created new jobs and financed productivity-enhancing equipment investment.
Shelf Space Incentives Include Barter Deals
Industries of every type use incentives to build and expand their brands. Notable for using such incentives are the food manufacturers who compete feverishly.
But, until recently, and a FASB (Financial Accounting Standards Board) ruling, just how much was spent by food manufacturers was always a closely-guarded secret. Now the figures are out, as the food companies had to provide a one-time look at what they paid for shelf space.
Incentives take the form of give backs, rebates, and the bartering of additional merchandise. Added together, the total amount of the incentives reported by food manufacturers totaled $60 billion for the year 2001. (Major brands spend 13% to 15% of their sales for shelf space.)
The Federal Trade Commission is investigating whether such practices (paying for shelf space) is anti-competitive, after smaller companies complained they are shut out of stores. Stay tuned...
Here And There. . .
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