The weekly newsletter for everyone interested in barter--the world's most versatile business tool!
May 21, 2002
Written by Bob Meyer, Editor of BarterNews
Advertising Paying Off...
Terry Brandfass of Trade Management, and a member of IRTA North America Board of Directors, years ago promulgated the notion that IRTA should conduct a worldwide advertising campaign to promote the barter industry, which would raise awareness among the business community. Her persistence paid off.
Last fall the first full page ad in a national inflight magazine ran. (Additional advertising is scheduled over the next 12 months.) In addition, IRTA's "Commercial Barter Growth Report," has garnered four interviews--the latest being CNBC's "Power Lunch." The Commercial Barter Report has been cited by The Economist, BBC and ABC.(Further details on the report appears on page 28 of the coming issue of BarterNews.)
"Power Lunch" Positive Message For Industry
At 2:15 EST on Friday, May 17, the segment on the barter industry was broadcast with an appropriate lead-in about the newly released Star Wars movie and its accompanying merchandise blitz, with an expected sales goal for the action figures of $1.2 billion. But what if those sales fall short, as many pundits believe will happen? The segue was made that they may well be traded through a corporate barter deal.
The camera then focused on Krista Vardabash, IRTA's Executive Director, who explained how corporations will trade excess merchandise for trade dollars...which then can be used to purchase a variety of goods and services.
Why would a company choose to go this route? Alan Elkin, CEO of Active International, pointed out the benefit to the national TV audience, "While liquidators will pay maybe 25% of wholesale value for merchandise, a corporate barter company will pay 100% of the wholesale value."
The show concluded by naming prominent corporations which have worked with corporate barter companies, as well as providing statistics on the industry's aggregate barter volume. Overall, it was a positive boost for the barter industry, reaching the nationwide business marketplace.
"The biggest hurdle going forward will be getting people to change their behavior."
...J. Smoke Wallin
In reading the special report, "The Future of E-business," in the recent issue of Business Week the above statement uttered by Wallin resonated with me after thinking about the recent attempts by Ubarter, BigVine, and other barter companies who felt bartering on the Internet was a can't-miss situation. It did miss, the first time around.
It looks more and more, unfortunately for them, that they were just ahead of their time. Because it does take time--many years--for people's habits to change regardless of the payoff. Yet, conditions are changing and moving rather rapidly in that direction.
Barter Industry Will Benefit
So even though e-commerce today accounts for only 2% of all business sales, the internet technology is being embraced by a surprisingly large number of people, especially when it comes to the travel industry. The airlines and hoteliers are expecting online reservations to grow 44% this year, even though travel spending will be up but 4%.
We may still be early in the game, but with time and experience comes change. Which means the commercial barter industry will someday benefit immensely from this internet technology, as well as the industry's unique "toll-position"...providing the business community with a viable, alternative form of capital.
Golf Course Trade Credits, Hotel and Golf Equipment Wanted
Frank Postic, President of TotalGolf Store, LLC, of Minneapolis (MN), announces the creation of a new department within TotalGolf Store to purchase excess unrestricted, high end daily-fee golf course trade (barter) credits for resale through their golf specific web site, www.TotalGolfStore.com.
In addition to golf course trade credits (as well as due bills and scrip) Postic said trade credits will also be purchased for All-Suite Hotel rooms and new golf equipment as well.
(Information needed by Postic for purchase consideration: name of golf course, hotel or equipment provider, city and state, expiration date, transfer authorization contact, and total amount of credits.)
Interested parties who want to turn trade credits into cash should e-mail all information to: firstname.lastname@example.org or mail to: TotalGolf Store, P.O. Box 220, Excelsior, MN. 55331-0220.
OnlineAuctions By Major Corporations
Travel buyers at major corporations are moving aggressively to further reduce costs and are pressuring hotels to accept reverse auctions--where select hotels in a market are invited to bid prices down for a corporate account. (Unlike traditional auctions where prices are bid up.)
The technique is encountering stiff resistance from hoteliers, as they are concerned about reducing their product to a commodity. However, auctions likely will grow in number as the negotiating season for 2003 rates gets underway in the coming months.
Charles Schwab Inc. recently conducted a pilot reverse-auction for hotel rooms in two of its most frequently used cities (Indianapolis and Los Angeles) and expects to expand the approach for 2003. General Electric and Bayer Corp. have also used reverse auctions.
The auction channel reduces the bid cycle time by 50%, from an onerous four to five months down to a more manageable time frame. An additional 10% in incremental savings is the goal.
Schwab informs participants upfront of hotels in the auction, but during the actual online session hotels are only identified as #1, #2, and so on, as they adjust their bids. Auction technology was provided by Procurepoint Travel Solutions.
For auctions to be successful, buyers need to be sure that the hotels participating are at roughly the same price point and service levels, which requires legwork and time to develop the request for quotes (RFQs). Buyers say the RFQs are intended to make sure the hotels are comparable to one another, to do otherwise is unethical.
Ownership (Options) In Exchange
Famed casino developer Steve Wynn's recent turnaround on a vowed statement he made just two years ago, shows the significance of how talented people today demand a piece of the action. Wynn, who sold Mirage Resorts to MGM Grand two years ago, said he would never again operate a publicly traded company.
In returning to the game he loves, he's changed his mind and now plans to sell public shares in his redevelopment of the Desert Inn, known as Le Reve. Wynn's reasoning is two-fold: Normalcy has returned to the stock market and gaming stocks after the dot-com aberration. Secondly, one really has to be able to offer a stake in the business to attract top-quality staff; a public company enables one to offer stock options.
Reinforcing the fact that American workers no longer regard themselves as simple wage earners, but also think of themselves as stakeholders in their employers, is the recent surprising news from the AFL-CIO's rank-and-file...who oppose the proposed cap on the amount of company stock that workers could hold in their own 401(k).
In short, the workers value the ability to make their own personal decisions and are opposed to Washington's Corzine-Boxer suggestion that would force a change (placing a cap on the amount of company stock they could own) in their investment decisions.
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