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September 18, 2007

Written by Bob Meyer, Editor of BarterNews

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From the desk of Bob Meyer...09/18/07

MGM Mirage Barters For 50% Stake In New $1.2 Billion Las Vegas Casino

The MGM Mirage is trading 40 acres of a 78-acre parcel of land that it owns (valued at $20 million an acre) for a 50% stake in a new Las Vegas casino that will be developed by Kerzner International Holdings and Dubai World, a holding company for the Persian Gulf state of Dubai. The latter two organizations will each own a 25% share in the casino, which will be located in the north end of the Las Vegas strip not far from the CircusCircus.

Jeffrey Kaliel, Son of ITEX Superstar Salesman Art Kaliel, Married

In past issues we noted the outstanding success of the San Diego ITEX office and their top-producing salesman Art Kaliel. This past week his 29-year-old son Jeffrey married Debra Cook in New Brunswick, Canada.

Jeffrey is a lawyer with the Department of Homeland Security in Washington, DC. He served in Iraq in 2003 as an Army staff sergeant. A graduate of Amherst, he has a law degree from Yale.

The bride, 29, is a presidential management fellow and project manager for the President’s Emergency Plan for AIDS Relief at the United States Agency for International Development in Washington. She graduated from Amherst and received a master’s degree in public health from Harvard. She served with the Peace Corps in Paraguay from 2001 to 2003.

Millions Of U.S. Entrepreneurs Work From Home

The U.S. Small Business Administration’s Office Of Advocacy reports that more than half of the nation’s 26.8 million small businesses are based at home.

Advertising Pays

Procter & Gamble is spending $7.9 billion, or 9.9% of the company’s $76.5 billion annual sales this year for marketing, according to research by Sanford C. Bernstein & Co.

In-Store Marketing Institute
Reports . . .

Marketers are expected to spend $20.4 billion on in-store and point-of-purchase advertising in 2007, reports Veronis Suhler Stevenson, a New York private equity firm specializing in the media industry.

Quote Of The Week:

“A strong positive mental attitude will create more miracles than any wonder drug.”

—Patricia Neal.

All back issues of "From the Desk...” can be accessed by clicking here.

(Please feel free to forward our newsletter to your friends and colleagues. We have a “box” at the end of the newsletter for your convenience. See you next week. . .)

Mardak Suggests Consumer Electronics Pro’s Consider Trade Leverage

Don Mardak, founder and CEO of New Berlin, Wisconsin-based International Monetary Systems (NYSE:INLM.OB), describes his company’s focus in terms of marketing. “We think of ourselves as an affinity marketing system,” he confirmed, “targeting specific populations that would be likely to do business.”

International Monetary Systems (IMS) is a barter exchange network that makes its money three ways: 1) by assessing a membership fee, 2) by assessing a small monthly fee, and 3) by earning up to 6% of the value of a trade for facilitating it.

“When you think of bartering, you probably think of an even exchange,” Mardak reasoned. Someone says, ‘I have apples and you have oranges...let’s swap.’ Our exchange allows you to trade your excess capital to the exchange for trade dollars.”

This, he says, spares business owners from having to hunt down the guy that has the oranges. “Often, two parties don’t have a common need to trade at the same time,” he added.

Swapping In Your A/V Leftovers

In a brief essay, entitled “Using Barter to Boost Audio/Video Sales,” Mardak makes the point that excess inventory can slow A/V retailers. For example, in an industry that thrives on new technology, having last year’s model taking up space on the shelf can make retailers hesitant to upgrade all of their showroom options.

Mardak explained that by trading the unsold merchandise into IMS, “all the excess capital can be converted into liquid capital that will produce buying power.” Can’t that be done on eBay or Overstock.com? “If you have something you have to sell, you can go to eBay and try to sell it,” he admitted. “But what about selling services?”

With IMS, integrators could provide systems installation to a chain of restaurants in exchange for, say, advertising dollars or display units purchased with trade dollars.

“We believe we’re working very hard to brand IMS in much the same way eBay or Overstock.com has branded themselves,” Mardak stated.

“Right now, we’ve grown to a base of 16,000 exchange members in 44 markets coast-to-coast.”

The IMS exchange is, indeed, growing. Last year they did $72 million in trade volume and revenue was $8.7 million. This year they expect to reach $108 million to $110 million in trade volume (which is computed on one side of each transaction).

For more  information on International Monetary Systems see “Site Sponsors” at top of page for click through.


What’s ahead for the economy? How will it affect YOU personally? How will it affect the BARTER industry? Two noted authorities speak out on the two most important topics facing the world today. Just one of the 532 articles found on the BarternewsBlog. Click here.

There are over 500 articles posted on our blog.
Click here www.barternewsblog.com.


ITEX Holds Successful Regional  Conference

Franchisees, trade directors, staff, and representatives from the ITEX corporate management team converged in Omaha (NE) for three days, from September 14th through the 16th, at the first of their two annual regional conferences.

The annual event drew a strong turnout to network, strategize and learn from professional speakers so as to enhance and grow the franchise network. Sponsored by the ITEX Broker Association Board of Directors, the theme this year is “Building On Net Growth.

Speakers including CEO Steven White, VP of Marketplace Brian Argetsinger, and Director of National Sales Doug Dagenais provided information about the status of various incentives, plans, and programs. The three-day event was hosted by Omaha franchisee Ms. Terri Smieja in a professional setting at the La Quinta Inn & Suites Carter Lake.

The regional conference will be duplicated in San Jose (CA) beginning October 18 for the west coast ITEX offices.

For more information on ITEX go to www.itex.com.


Barter’s Value Questioned

Within the past 10 days I’ve come across two articles, both written by business women, who have voiced their opinions regarding the use of barter. In both cases they suggested it is not the way to go.

Regardless of their arguments, which were rather weak (showing they weren’t entirely conversant on how to ascertain the value of a direct trade or how a trade exchange functions providing value to a member), the commercial barter industry should take such writings into account.

Why? Because many, if not most, of the readers of such stories will not have any prior barter experience, and therefore will accept unquestioningly as true what they read.

Below we have printed parts of the article (published in the Herald Sun, Australia’s largest selling daily newspaper), written by Ms. Karen Morath...a speaker, consultant and writer:

Is It Good To Barter?

“It is tempting to exchange business services. It can be seen as a way to preserve cash flow and get all the legal/accounting/marketing help we need. But is a contra deal (an exchange or a trade) more trouble than it is worth? I think so.”

BN rebuttal: The headline of her article should more appropriately have been, "Is Barter More Trouble Than It’s Worth?" Obviously she feels it is. Of course what we don’t know are some important facts...like how often she has actually traded and in what amounts? (Nor do we know if the reason for the article was actually to get some valuable coverage for her business. If this was the case, I say congratulations to her. To this end she was certainly successful.)

But now let’s look at her reasons why she says barteror more specifically, contra or direct tradingis more trouble than it’s worth.

“One big problem is that the various service providers almost certainly use different methods to calculate their fees. Some have hourly fees, others charge all-up for the job. This complicates the trading process. But that is nothing compared with having to tell your would-be accountant that he or she needs to work three hours at their rate of $85 per hour as a trade for one hour of your time at $275 per hour. 

BN rebuttal: Fees and different pricing structures for services/products become an impediment in a direct trade only when both parties are rigidly-focused on a price, rather than on the value they are obtaining. Fees are a starting point, an area of reference, but not a deal killer.

(In the BarterNews FastStart Program we devote 26 pages to the subject of direct trade, also known as one-to-one, back to back, and reciprocal trading.)

More often the experienced trading individual looks at the merits of the transaction...is it beneficial? Does it further the building of the business, or meet other goals? The answer to those questions will be answered by looking at one’s variable cost of making the trade and the value received. (Additionally, the sophisticated trader will have ascertained the other party’s variable costs as well.)

For example, in the FastStart Barter Program is an example of a trade that illustrates how easy it was to turn a $5,600 trade into $11,200 retail value simply because the trader knew the other party’s variable cost to make the trade and that they desired what was offered.

In a nano-second by asking the right question, the value of the trade was doubled...without an additional cost to the trader. That is the power and significance of barter.

“And then there are products, another complicating factor. If you seek to exchange your products for someone else’s services or your services for someone else’s products, should the product price be at retail or wholesale? And what will be the wholesale cost of your service provision?”

BN rebuttal: Morath’s concern in the entire article revolves around pricing issues, rather than the more important consideration (the value one obtains in an exchange)"which revolves around the cost of one’s bartered goods or services. She feels the effort to resolve these issues are more trouble than it’s worth. Her perception is her reality, and it is summed up in her closing comments...

“If you want to support other businesses, use and recommend their products and services, just do it. Engage them commercially and hope they will support your business too. In my opinion it is cash that fuels businesses, not bartering.”

BN rebuttal: Cash may fuel businesses, but barter (new incremental business) enables you to move well beyond the constraints of the cash world. Your wealth is not tied to just the cash you or your company earns. Nor is your financial success governed solely by the dollars (or lack thereof) in your pocket...because you’re changing the method of payment.

With knowledge and commitment you can harness and utilize a powerful multiplier. One ruled by ingenuity, creativeness, and the ability to perform. Barter, when used intelligently, is a powerful adjunct to a company’s operation.

Contra deals, direct trades or exchanges can be the most profitable ones undertaken because there are so few limiting parameters, plus one’s negotiating abilities and business acumen play such an important role.

Direct barter transactions do take more time, normally, to both find and negotiate. But the potential profits derived are more than worth the added effort.

For another look at this subject see “Twelve Steps To A successful Barter Negotiation.” Click here.

Coming soon: we will look at the second article that revolves around bartering through a trade exchange. The author contends there are five reasons NOT to join a trade exchange. You won’t want to miss this story.


Hotel General Managers

Here’s The Easiest $100,000 You’ll Ever
Bring To The Bottomline!

Collect cash, as usual, from the guest accounts staying at your facility that require the use of professional AV services. And rather than shouldering your ongoing employee costs, or your current vendor’s cash agreement for AV services, here’s a much better alternative:

Work with a proven national vendor (a sterling 25-year track record) who will provide all of the AV services for your hotel on a 100% TRADE BASIS! (Payment to be in the form of hotel rooms and/or trade dollars.)

Your hotel’s annual AV billings must be a minimum of $200,000, and this offer is available only in the continental United States.

For a confidential introduction contact Bob Meyer via e-mail: bmeyer@barternews.com. (Please type in AV Services On Trade in the subject line of your e-mail.)

Attention Trade Exchange Owners:

If your member hotel(s) have a minimum of 10,000 sq. feet of meeting space and annual billings of at least $200,000 for AV services this is a great opportunity to earn substantial cash service fees on the hundreds of thousands of trade dollars your hotel member will be paying the vendor. Contact Bob Meyer at the above e-mail.

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The Growth and Use of Secondary Capital (New Money) Creates Unprecedented Wealth In Today’s New Age Of Possibility

There are many forms of secondary capital—which can be defined as any financial instrument that measures and communicates value in a common language. Would you like to see and learn more about the many forms of secondary capital?

 We have 70 free, informative and inspiring, articles for you in our “Secondary Capital Section.” Check it out... www.barternews.com/secondary_capital.htm.

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