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

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June 6, 2000

In this week's report. . .

  • Ubarter.com acquired by Network Commerce
  • Jeweler Harry Winston's brilliant trade
  • Collective advertising conserves cash, utilizes barter
  • Here and there. . .

Acquisition Of Ubarter.com Finalized

It hardly seems like its been four years since Steven White, Alan Zimmelman, Dick Mayer, Barbara Ryan, Stacy Lawrence, and Patra Model spent a year to take public their International Barter Corp.

Intending to roll-up the trade exchange industry, their first acquisition was White's Cascade Trade Association; they subsequently acquired a large exchange in Toronto, BBE. But, in retrospect, they were a couple of years ahead of the curve, which now sees an enormous consolidation taking place within the industry.

Unable to quickly make further acquisitions, IBC moved in a different direction...believing the Internet would be the wave of the future. They renamed themselves Ubarter.com, and focused on becoming the first trade exchange to move into the online world.

In late December ShopNow.com, now known as Network Commerce Inc. (NASDAQ: NWKC), signed a letter of intent to purchase Ubarter. And last Wednesday, May 31, the acquisition was completed.

Another chapter begins in the evolution of Ubarter, now a subsidiary of a much larger company. Founders White and friends have much to be proud of.


Famous Jeweler's Barter Deal Reaches Staggering Proportions!

According to Ronald Winston, the son of famed celebrity jeweler Harry Winston (his jewelry is worn by beautiful actresses at every Academy Awards presentation), a trade his dad made years ago may have been his best business decision ever.

It was back in 1940 that Harry Winston traded a $50,000 diamond necklace for a Colonial-style clapboard estate built in 1911. The property is a working farm as well as a vacation home for Ronald, who now runs the New York-based jewelry business his late father founded.

The 15-acre estate with 12 bedrooms, 8-1/2 baths, and 7 fireplaces is just thirty minutes from midtown Manhattan. It's presently on the market for $27 million!


Advertising Collectively With Other Exchange Members An Inexpensive Way To Generate New Business

Collective advertising, as the name implies, is simply a joint effort by several specialized companies. Acting as one business group, with others from your trade exchange, you target your ads to a similar audience.

The reason for such joint efforts is economy of scale. In other words, by pooling your resources you will take advantage of the advertising opportunities inexpensively, and "stretch out the value" of your trade dollars.

The key to success is cooperation...getting several businesses together and developing an advertising campaign that works for all of the participants.

Formats, initially, should be the media available on a barter basis through your exchange (local tabloids, magazines, placemats at local restaurants, stand-up table ads, fax message ads, billboards, etc.)

Then explore other advertising avenues where a portion of the advertising costs would be covered on trade, such as direct mail flyers, which can be printed on trade. And by sharing postal costs, the cash outlay could be kept to a minimum.

Here's An Example

Consider using a standard-size gift card with a photo or drawing of a house on the front of the card. When the card is opened, the interior of the home is depicted.

At various locations within that interior are highlighted areas that could conceivably use work:

  • Chimney needs cleaning or repairing
  • Central air conditioning needed
  • Windows and screens need cleaning or repair
  • Carpeting needs cleaning or replacement
  • Walls need painting or papering
  • Furniture needs upholstering
  • Insulation needs checking

Each highlighted location alerts the customer to a potential problem or need. Next to each item is the name and phone number of the firm specializing in the service.

Of course, the same strategy (card presentation) could be devised to assist a restaurateur, a hotelier, or other business owners. Acquiring specific lists of such local businesses is often available through your exchange, as often is the mailing service to affix the addresses for post office delivery.

Collective advertising through your exchange is a low-cost and very efficient way to generate additional business. Get together with others in your business group, pooling your resources for this highly effective advertising effort.


Here And There. . .

  • Fallout from the internet-stock turmoil has extended even to some would-be dot.com landlords in Silicon Valley. Real estate agents who not long ago demanded start-up equity for office space are now instead asking internet companies for six months of advance rent, a three-month security deposit, and a one-year letter of credit.

  • It's fairly common for companies to keep valuable employees by offering them bigger stock grants. But now, some pay-consultants are peddling a more radical idea: Give staffers shares of a customer's company. They believe such ownership will push the employee to work harder to nourish and grow the account, while further cementing the business relationship.

  • The Williams Communications Group of Tulsa signed a definitive barter agreement with Montana Power Company's Touch America unit. The companies are bartering unused fiber-optic capacity or "dark fiber" in the central states. The 20-year agreement is valued at $80 million.

  • MyCity.com (America's largest local community portal) is selling franchise rights to 600 metropolitan areas. Under the company's program local franchisees manage local market affiliates, develop regional content and media partners, sell local advertising, and foster local media promotional bartering arrangements.

  • Russian airplane manufacturer Aviastar, builder of the world's largest cargo plane (120 tons), is working on a 5-year barter arrangement with the country's national power utility wherein they will supply airplanes in exchange for their utility needs.

  • BigVine continues with their generic press release efforts, informing the business sector of the ability to move excess inventory and reach new customers. Their most recent effort revolved around the furniture industry.

 

We welcome your comments, questions, and observations.
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