The weekly newsletter for everyone interested in barter--the world's most versatile business tool!
July 16, 2002
Written by Bob Meyer, Editor of BarterNews
eBay Moves In On Corporate Barter Marketplace
Assisting corporations in the moving of their excess inventory has been the MO for the corporate barter community. Now a major competitor is on the horizon. It's Ebay, the online auctioneer.
Already several dozen big companies, including Home Depot, Dell Financial Services, IBM and Sharper Image, are using Ebay as a market for their excess inventory. And they accounted for over 4% of Ebay's gross merchandise sales in the first quarter.
A year ago these companies didn't make the radar screen. What's the draw? A much better price than liquidation and immediate cash.
Ebay's CEO Margaret Whitman expects to see $30 billion to $40 billion worth of goods sold annually by 2005, up from $9.3 billion in 2001. If Whitman is correct, then even at the present 4% sales figures it would equal what the corporate barter companies are aggregately now doing.
on Ebay as more corporations begin to emulate those already using the
auction site to move excess inventory could mean Ebay surpasses the
corporate barter marketplace in transactional volume in the near future.
Our continuing dialogue on the question "What are your thoughts on why more bartering isn't occurring in the marketplace?" comes from Don Loughnane, President Maritime Barter Associates (Canada).
"I have read with interest many of your Tuesday Reports and enjoy learning the thoughts of other people involved in the barter business.
"I agree that recent bankruptcies and the proliferation of less than sterling brokers is a problem for the industry. But in my opinion, the biggest problem that is holding us back are the trade exchanges who allow members to bump prices.
"As long as people are allowed to ask, and get 3, 5 even 10 times what things are actually worth we will NEVER achieve serious consideration among the major players. Just today I received a solicitation for a computer that would retail for approximately $1,500 and they are asking $6,999 on trade.
"I can think of nothing that denigrates our industry more than people trying to sell barter credits for huge discounts. If the barter dollar was actually able to buy products and services for the same price as cash these people wouldn't be offering the credits for such ridiculous discounts.
"Most trade exchange member contracts have a clause demanding that they charge same price as retail. It's high time they start ignoring the short term benefit of increased commissions on these deals and enforce the rule!
One Person Can (And Does) Make A Difference
We often hear people lament "What can one person do?," when faced with various challenges in life. This story, about the leading Indian industrialist Dhirajlal Hirachand Ambani, shows what a dedicated talented individual can do.
Ambani is credited with transforming the Indian stock market when the company he founded, Reliance Industries, went public in 1977 and created a million shareholders. Until then, India's stock market was largely played by state-run financial institutions and a handful of business enterprises.
Ambani expanded his business from a $2,000 trading firm to a $12 billion Fortune 500 company in three decades, before suffering a recent heart attack at age 69.
Prime Minister Atal Bihari Vajpayee said about Ambani, "the country has lost an iconic proof of what an ordinary Indian, fired by the spirit of enterprise and driven by determination, can achieve in his own lifetime."
Marketers Strike Cross-Promotion Barter Deals
Network television and music companies are bartering with one another in an effort to boost sales for each other. The ad agency for Ford Motor's Jaguar struck such a deal with Sting's manager to use his song "Desert Rose" and part of the video in an ad for the luxury-car maker. The ad showed Sting being chauffeured through the desert in a Jaguar S-Type, and the $19 million in airtime resulted in soaring album sales.
Sheryl Crow is now
the recipient of a deal with American Express, which decided to get
behind her new single, "Soak Up the Sun." The song gets a
plug in an American Express ad which features a woman buying a surf-board
with her Amex card, and then heading off to the beach, as Crow's song
is heard in the background. (In 1999, Crow helped American Express launch
its Blue card with a concert in Central Park.)
Here And There. . .
This Issue's Glossary of Terms:
We welcome your comments, questions, and observations.
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