September 9, 2003
Written by Bob Meyer, Editor of BarterNews
Active International Reports Impressive Client Trade Credit Utilization
The largest corporate barter company in the world, Active International of Pearl River (NY), www.activeinternational.com, continues to expand its client spend-down capabilities.
According to CEO Alan Elkin, in the fiscal year ending June 30, 2003, Active assisted its clients in the spending of $180 million trade credits...resulting in a huge cash-flow savings by their clients.
IRTA Convention Concluded
Over the weekend of September 4 - 7, the International Reciprocal Trade Association held its 2003 convention at the Mission Inn Golf and Tennis Resort outside of Orlando, Florida.
A full report on the convention will appear in the next issue of BarterNews. From early reports, comments regarding speakers David Cooper, Scott Hunter, and Mark Stout varied from "outstanding" to "the best we've ever had!"
Wayne Sharpe, founder and Chairman of the Board of Bartercard, and Steve Goldbloom, President of the Global Barter Group, were the Hall-of-Fame inductees. Susan Groenwald received the first-ever Life-Time Achievement award.
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American Entrepreneurial Activity Drops
According to the newest edition of the Global Entrepreneurship Monitor (GEM) from Babson College and the Kauffman Foundation, U.S. entrepreneurial activity declined for the second year in a row following an unprecedented surge from 1998 to 2000.
Slightly more than 10% of Americans were involved in entrepreneurial activity in 2002, compared with 11.7% in 2001 and 16.7% in 2000.
GEM reports the greatest entrepreneurial activity is in Thailand, with India, Chile, Korea, Argentina, New Zealand, Brazil, Mexico, China and Iceland ahead of the United States.
However, the United States has the highest rate of people starting businesses because of opportunity rather than necessity. The U.S. also has the highest entrepreneurial activity among the G7 economies. Lowest is Japan, where less than 2% of the population is launching or running their own business.
"Entrepreneurship impacts the world," the GEM survey states. "The 37 countries involved in GEM represent 62% of the world's population and 92% of the world gross domestic product."
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Quote of the Week:
"Success is going from failure to failure without a loss of enthusiasm."
Ad Spending Strength A Surprise
Advertising spending in the U.S. jumped 6.8% in the first half of 2003, which, after three "down" years, is cause for celebration on Madison Avenue. Ad spending for the first half of the year totaled $61.6 billion, up from $57.7 billion in the year-earlier period.
Cable TV and Spanish-language network TV experienced some of the biggest gains, jumping 17% and 15%, respectively. Consumer magazines, a sector hobbled by the ad recession, showed a gain of 11%, while the much-maligned Internet industry saw ad expenditures climb 15%.
Despite the positive findings, ad agency chiefs aren't ready to reinstate the three-martini lunch, because advertising agencies no longer typically handle the lucrative business of media buying. Today, agencies are being paid set fees for their work, unlike previously when they received commissions based on the amount of ad time a client purchased.
Ad agencies are optimistic about the future, however, because in 2004 a presidential election and the Olympics will lead to a significant upswing in ad spending.
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Budget Airlines Make Major Impact As Low-Fare Networks Expand
Business travel is being "Wal-Marted" by low cost operators. The discounters of air travel—Southwest Airlines and newcomers such as JetBlue Airways—are changing the game, just as Wal-Mart Stores did in retailing. (Low-cost carriers now account for nearly 20% of U.S. domestic air capacity, up from 6% during the downturn of the early 1990s.)
In addition to the increased capacity, the second force behind the fundamental shift in airline economics is the Internet. Travelers, travel agents, and corporate travel managers now have a powerful tool to find and take advantage of deeply discounted fares, even on the big airlines.
The airlines presently are following a strategy of reducing flights, thereby increasing their load factor (seats occupied). Carriers have grounded about 2,000 aircraft, according to the Air Transport Association, and are resisting putting them back into service...despite recovering demand for air travel.
Because flight-inventory has been reduced, the bartering of seats, which is done on a selective basis, is not happening in large numbers.
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"What we have here is a failure to communicate!"
Years ago, one of the most visible people in the barter industry said the #1 reason why the industry wasn't farther along in its development was due to a "failure to communicate" by those in the business.
This realization was the genesis of The Competitive Edge newsletter, now into its 18th year of publication. Trade exchange owners who use this powerful marketing and promotional tool are never guilty of "failing to communicate."
As the owner of a trade exchange you must stay in front of your clients. Informing, educating, and inspiring them, because your clients' bartering is a relatively small percentage of their overall business. So if you don't keep their interest and enthusiasm for trade at a high level, you lose.
Your primary aim, like all other businesses, is to get your clients coming back for more. Every extraordinary business (and every trade exchange owner who wants to be extraordinary) knows that the customer you have, is a lot less expensive to sell than the customer you don't yet have!
Want to take your exchange to a higher level? Use The Competitive Edge newsletter in your operation—it "sells" the many benefits of working through your trade exchange like nothing else!
To learn more about The Competitive Edge newsletter and how it can help build your trade exchange, click here.
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