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."

If you haven't read the current issue of BarterNews, get yourself a copy now—issue #61 has just been released! Orders are shipped the same day we receive them. (Click on Order Form)

Quote of the Week:

"Success is going from failure to failure without a loss of enthusiasm."

—Winston Churchill

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.

Every barter company in the world is listed on our web site, click through to our Global List of Barter Companies.

Get New Money-Making Ideas And Valuable Contacts!

You can obtain useful, informative ideas and contacts in every available back-issue of BarterNews.

Here And There. . .

• China's new banking regulator announced that the government plans to raise the ceiling on foreign ownership of local banks from 15% to 25%, in a bid to bolster the performance of midsize institutions. The move should encourage foreign banks to become strategic investors in these mid-ranked banks.
  
• Bob Bagga's BizXchange organized a luncheon with former Seattle Mariner's manager Lou Pinella as honoree, when his Tampa Bay team recently visited Seattle. Members of BizXchange enjoyed a fine meal and conversation with one of the top managers in baseball, and the profits benefited Children's Hospital.
  
• Ronnie Graham, Area Director of BXI Raleigh, said an inspiring Regional Conference focusing on building an effective sales team was recently held in Alabama. The event was hosted by Brad & Amanda Howard, who have built one of the most successful offices in the BXI national network. They shared their insights as well as sales techniques with those in attendance.
  
• Delta Airlines is selling frequent-flier miles in bulk to small businesses, and has seen an 80% increase in sales since January. Randy Petersen, editor of InsideFlyer, reports that other airlines have "been trying to sell as many miles as they can," adding that selling miles is an upfront moneymaker for the carriers. (There are now 87 million members of frequent-flier loyalty programs.)
  
• Have you signed up to receive a summary via e-mail of the Tuesday Report every week? If not, go to the top of this issue (right hand corner) and sign up!
  
• Wenner Media, the parent of Rolling Stone magazine, is creating an in-house agency to devise print ads and other projects. The move is seen as a direct affront to the ad industry, and comes at a time when some big-name marketers fume over what they say are lackluster creative efforts from the cream of Madison Avenue. (The move threatens to tarnish the facade ad agencies maintain—that they are irreplaceable.)
  
  Industry executives are concerned, since it jeopardizes the magazine relationship with ad agencies. Historically, magazines have always been vendors for agencies and now they are becoming a competitor.
  
  Robin Steinberg, a vice president at Aegis Group's Carat North America, a media-services firm, says, "This may be a wake-up call for creative agencies to start doing their jobs better."
  
  Ad spending in magazines plummeted 7.7% to $16.5 billion in 2001. The recent rebound has been slow, with ad expenditures rising only 1.8% in 2002.
  
• On September 3, Bentley Communications (OTCBB:BTLY) announced that they've acquired the assets of Crump Barter Systems.
  
• Fax marketers have reacted with relief to the Federal Communication Commission's decision to grant a 16-month delay of the enactment of new fax solicitation rules. The FCC pushed back the August 25 start of new rules governing fax solicitations to January 1, 2005, in response to an outcry from professionals, trade associations, and small businesses. (The new rules would have required faxers to get written permission from consumers and businesses before sending solicitations.)
  
• Furniture Today magazine reported that Wal-Mart sold more furniture than any other retailer in 2002, becoming the first non-conventional furniture store to take the top-spot in a decade.
  
• The "spot price" for grapes, due to a glut in the spot market—which is at a 10-year high—is creating havoc for California's $14-billion wine industry. Example: The price for cabernet sauvignon grapes, the gold standard of the industry, was $3,921 a ton last year. This year on the "spot market" Napa cab is going for $1,500 a ton. (Eighty percent of the grapes grown in California's Central Valley are sold on "spot" or short-term contracts.)
  
  Some of the more creative small growers are disposing of their fruit by harvesting the surplus grapes and crushing them into wine...making deals with small grocery chains, trying to get at least their money back, rather than taking a 50% hit on the reduced price. (This situation looks like an opportunity for some creative bartering efforts.)
  
• Over 150 world leaders and top business executives will convene in Detroit later this month, to set the framework for a positive relationship between the United States and the Arab World at the first ever U.S.-Arab Economic Forum. An impressive list of leaders from around the globe will attend including U.S. Secretary of State Colin Powell, Foreign Minister of Saudi Arabia Prince Saud Al Faisal, and the OPEC Chairman.

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