The weekly newsletter for everyone interested in barter--the world's most versatile business tool!
July 30, 2002
Written by Bob Meyer, Editor of BarterNews
Present Era Favors Toughest Competitors
Alan Greenspan, apart from lamenting the threat of corruption in corporate America during congressional testimony earlier this month, also defined this era as one of increasing competition at home and in the global marketplace dampening pricing power across developed and developing nations alike.
Information technology will be the cornerstone of U.S. companies' efforts to become efficient and competitive. Productivity, Greenspan noted, has continued to rise at a remarkably strong 7% pace this year.
The recovering economy is being greeted with more determination than enthusiasm across most of the U.S. and global industry. Which, Greenspan believes, is just about the right perspective for this new era.
Meanwhile technological advances continue onward: IBM's advanced super computer (code name: Blue Gene) will have the processing capability to theoretically download every page on the Web in less than a second! When finished in 2004 it will be far faster than today's fastest 500 computers in the world combined.
It will have the
circuitry (hardware) necessary to monitor itself, and a primitive form
of self-awareness (software) to understand how it is performing and
identify failures. Plus it will have the problem-solving ability and
physical components to reroute work and internal communications when
things aren't working right, or as processors fail.
Our continuing dialogue on the question, "What are your thoughts on why more bartering isn't occurring in the marketplace?," comes from Annette Riggs, Access Trade Management, Mill Valley (CA).
"I have worked in the barter industry for over 20 years in retail, media, corporate, and most recently dot-coms and new technologies. I just caught up on the Tuesday Reports and decided to put my two-cents in.
"Herbert Teichmann addressed the core issues of deficit spending and the lack of industry leadership. I would like to address this in a more specific way... Why are trade credit prices too high and too difficult to spend? And why is the industry in worse shape now than before almost $300 million in venture capital was poured into it?
national currencies like the US dollar, we are creating currencies.
We call it barter, because it is supposedly backed by the products and
services in the system - a direct measure of the exchange of those goods.
When the Federal Reserve issues (by way of loans to the government)
too much currency in relation to actual goods and services
"In a trade exchange, the owners/operators are the 'government' and if they 'borrow' goods and services from members, they have issued additional currency (by way of a loan to themselves) and have now created inflation. If they don't pay it back timely (or ever), in extreme examples these micro-economies collapse. In the same way this occurs in larger economies like Mexico, Argentina, Russia, Chile and others.
"My point is that enforcing pricing rules has never, and will never, have any significant effect. The market finds its own pricing according to real and perceived value of the currency - PERIOD!
"The 'real' value seems to be what is missing in our conversation. One particular exchange over-emphasized the value of a currency as being 90% perception. "If we only had better marketing, smarter customers, more money," etc., indicates that as an industry we may be operating under this distorted view.
"It's true that you can operate for a long time on perceived, rather than real, value as long as you are growing rapidly - and it doesn't catch up with you.
"The venture capital infusion of 'dumb' money (into our industry) is just too vast a topic to get into here, I just want to offer a couple of ideas for further discussion:
"Many of us saw an opportunity to expand the client base and hoped to build greater value, awareness and credibility. Instead, most of the money was wasted - there are not more customers and credibility has suffered. Short-term thinking folded the industry in on itself, and in an economy that would normally create a boom for the industry we are languishing. The same problems, including poor liquidity, low standards, and high transaction costs still exist.
"What if the currency was not the product? What if we standardized trade currencies and everyone used the same one? What would our role be then? What creativity and energy for expansion would be unleashed?
"There are many new currencies emerging and getting wide-scale adoption that don't have the inherent value that a fiscally sound, product and service backed currency could provide. As long as we keep thinking inside this 40-year-old box we will continue to miss an opportunity that has never been greater.
"Dee Hock, CEO Emeritus of Visa, worked hard to get the banking industry to get this - and it paid off pretty well. Another example is the food industry collaborating to standardize bar codes - a huge financial and managerial benefit to that industry.
"Similarly, the barter industry could operate from a neutral clearinghouse that is transparent with a fully distributed financial model. If an increase in clients occurred just in relative terms to the current size of the industry market, it would be a great benefit to everyone."
(Next week we will
have comments from Jack Schacht of Illinois Trade Association.)
Valuable Contacts For You. . .541 Barter Company Listings
Now available, listings
of every barter company in the USA...manufacturers, wholesalers, retailers,
travel & media companies move your products and services through
these 541 barter companies. Listings include addresses plus phone, fax,
e-mail and URL as available. Click
Pork-For-Tuition Program Shows Creativity!
Carl Bearden (R), a member of the Missouri House of Representatives and a consultant to Lindenwood University, helped devise an innovative bartering program for the college with 2,500 residential-students and 3,500 commuter-students. Bearden was concerned about the tight state funding for public higher-education institutions, and he contends such barter arrangements should be more widely considered.
Lindenwood's school president actually came up with the idea of trading hogs for tuition after mulling over how the school might help cash-strapped farm families afford tuition. The school is working with the Missouri Pork Producers Association to spread awareness of its willingness to barter.
The bartered hogs are butchered at a USDA-approved processing plant in Troy, Missouri...becoming bacon, sausage, and pork steaks for Linderwood's cafeteria.
The question is
how many empty classroom seats across the country (at the nation's 4,000
colleges) are now unoccupied, but could be filled with the tuition paid
in the form of needed goods and services...
you read the interview with Tradecorp's Art Goehring? Click
Offsets: US Perspective
Drink reception sponsored by: Summit Corporate Services
Attend this event to examine the variety of available offset agreements, the requirements, challenges and alternatives. This 2 day conference will also scrutinise the American market, the legal and economic requirements and constraints to enable you to best manage your agreements. With offset packages becoming the key factor in winning large overseas contracts, this event is a must-attend for those wishing to secure new contracts.
This event will also offer you an excellent opportunity to network. Confirmed attendees already include representatives from:
So register now to avoid your competitors gaining the advantage.
Here And There. . .
This Issue's Glossary of Terms:
We welcome your comments, questions, and observations.
© Copyright BarterNews 2003. Redistribution of BarterNews content expressly prohibited without the prior written permission of BarterNews.