The weekly newsletter for everyone interested in barter--the world's most versatile business tool!
September 3, 2002
Written by Bob Meyer, Editor of BarterNews
International Monetary Systems Acquires Tradecorp
On August 30th International Monetary Systems, Ltd. (IMS) announced the acquisition of Tradecorp, a privately held Ohio-based trade exchange, in a stock-exchange merger agreement. (Tradecorp was featured in the current issue of BarterNews.)
Tradecorp is based in Westerville, Ohio, and services Columbus, Cincinnati and Dayton. Art Goehring, who founded the company in 1976, will continue to work with IMS management in an advisory position; Barbara Martin, Tradecorp's Chief Operating Officer, will serve IMS in the lead operational role for the Ohio region.
This was IMS' (OTCBB: INLM) ninth acquisition, and the third in the last 12 months. Tradecorp's $6 million in barter transactions last year will be accretive to IMS' annual processed transactions, forecasted to be more than $22 million in 2002.
With the addition of Tradecorp's 1,200 clients, IMS' primary subsidiary, Continental Trade Exchange, now boasts a membership roster of more than 5,000 clients who are served out of eight cities in the U.S. and two internationally.
"The acquisition of Tradecorp accelerates our current growth strategy of being a leading consolidator in the barter industry," exclaimed Don Mardak, IMS President and CEO. "Tradecorp is one of the largest and finest independent commercial barter exchanges in the nation, and we look forward to enhancing our revenue potential by integrating and expanding our business in this key geographic region.
"Furthermore," Mardak added, "the addition of Art Goehring as an advisor to our board of directors will have a strong impact on our future operations. Art is one of the most-respected figures in the barter industry, and we value his participation and input."
For more information on International Monetary Systems see www.internationalmonetary.com.
Europe's Unusual Experiment In Globalization Lacks Promise
Europeans are well known for a more balanced lifestyle than workaholic Americans. But these days, Europe has never worked so little. On average Europeans work 1,400 hours a year, a 17% decrease from 1980. Whereas Americans work on average 1,800 hours per year, the same as they did in 1980.
While the Continent worked as much as the rest of the developed world 20 years ago, it has steadily cut back on work weeks while lengthening vacations--a trend that has gathered steam in recent years.
Their unusual experiment of trying to become more competitive while working less in this era of globalization doesn't appear to be working, if you look at the economic results.
Two years ago, at a summit in Lisbon, European Union government leaders set the goal of becoming the most competitive economy in the world by the end of this decade. But with unemployment rising and nearly no growth in consumption, Europe's fortunes appear tied to a U.S. turnaround more than ever.
Europe is on track to grow by about 1% in the first half of the year--well below the U.S.'s 3% rate--and nearly all of their growth is coming from exports. U.S. growth per capita, a common measure of standard of living, grew at twice the rate of Europe's largest economies in the 1990s.
Consequently, Europe hasn't become as attractive a home for foreign investment as the United States. From 1991 to 1998, the amount of revenue of foreign manufacturers in the U.S. more than doubled to $883 billion, accounting for 42% of all revenue of foreign subsidiaries in the 30 industrialized countries that constitute the OECD's membership. The equivalent numbers shrank, both by volume and in percentage terms, in the three largest European countries in that time.
Even though fewer work hours undercut Europe in its economic drive, reforms are tough to implement and the trend is unlikely to be reversed anytime soon, as resistance stems in part from Europeans growing accustomed to their new found leisure...especially among younger workers. Michael Burda, a professor of labor economics at the Humboldt University in Berlin, stated the obvious, "you have to work to grow."
Editor's Note: Because of its size and culture, the U.S. has other advantages: a deeper pool of investment capital, more mobile workers, a developed entrepreneurial culture, and faster adaptation of new technologies.
Valuable Contacts For You. . .541 Barter Company Listings
Now available, listings of every barter company in the USA. Retailers, manufacturers, wholesalers, travel & media companies, you can move your products and services through these 541 barter companies. Listings include addresses plus phone, fax, e-mail and URL as available.
Further Input On The Workings Of Barter. . .
I was inspired to sign up for your Tuesday Report when I saw some of the conversations going on. The conversation about why PCs and other "hard goods" are offered for 2, 5, even 10 times the cash price struck home.
I operate a computer store and repair shop. We want more sales just like everybody else, and naturally so. That said, I have not accepted several [trade] orders even though the customers have offered as much as 8 times my normal cash price.
Why? I simply must replace my inventory to stay in business, and there is no one offering the stuff on trade (at least not regularly nor reliably). I'd be out of business in two days if I filled all the orders I have waiting. No inventory left, no cash to buy some, and a ton of barter dollars to buy advertising with!
I have promised one customer to get him a computer just as soon as I can let the inventory go without replacing it, but I don't know when that will be! His is a standing offer of 10,000 trade dollars for a computer I would normally sell for less than 2,000.00 cash. The reason for the conflict? He earned tens of thousands of trade dollars buying and selling within the barter community using little or no cash, selling services and other "soft goods" with very low cash overhead, and I offer something with a high cash cost and thin margins.
What does a component manufacturer want? I'd say MEDIA! (And that is available.) What a deal for them! Factories going, product moving, advertising budget busting at the seams and the competition wondering what happened. What a pretty barter picture!
Another (related) topic was the inflation of pricing in trade exchanges and how to deal with it. One thing is to lower the flippin' taxes! (The fees.) The next is get rid of the regulations. There are enough laws in place without the exchanges adding more limits to our ability to make deals. The exchange should manage the currency, but not the deals.
Most of the inflation is the fault of the exchange management, though. Too much currency in circulation, not enough members and variety, or, more likely, both. (Lower the fees, loosen the regs, and get more members. That will always help.)
I see the barter industry as a bit of a revolution against limiting government and other bureaucracies, so when my exchanges add rules I feel somewhat betrayed. When my exchange says I can't (or must) have a cash component in my sell offer, I go looking for a way around the (stupid) rule, or I leave.
And in closing, keep an eye on Barter-Bay, also mentioned in one of your recent issues. That is an interesting experiment. The old exchanges that went cashless on their fees had a different cost structure. This one might well have a very different outcome. I, for one, think it will.
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