Written by Bob Meyer, Editor of BarterNews

ITEX's Sacramento Corporate-Owned Office Sold For $800,000

ITEX Corporation (OTCBB:ITEX) has completed the sale of its corporate-owned brokerage office in Sacramento to Direct Business Exchange of California, a newly-formed company owned by Kristen Feuz.

The purchase price was $800,000 with a $100,000 cash down payment. The balance will be payable over seven years. The office will continue operations under a franchise agreement, wherein ITEX retains ownership of the client base and will continue recognizing revenue from the operation.

Ms. Feuz, employed since 1993 with ITEX, has a broad range of knowledge and experience with both the broker network and the clients she will manage. "I look forward to instilling the spirit of entrepreneurship to drive the local trade volume and new member sales." She has offered employment to the existing office workers and will remain in the current office space.

Steven White, Chairman of the Board, stated, "A leading factor in the sale was execution of the ITEX business model, which should support the broker network rather than compete with it. Reduction of corporate overhead was also attained.

For more information on ITEX, see www.itex.com, or contact Alan Zimmelman at (916) 679-1222.

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Growing Infomercials Are Sending Rates Skyward

The Direct Marketing Association estimates that the ad industry spent $23 billion last year buying media time for infomercials. Until relatively recently, most of that was for offbeat products from sellers who did not run a bricks-and-mortar retail network.

All of that is changing, as larger corporations (traditional advertisers such as BMW, Tropicana, Bissell, RadioShack and Dell) are getting into direct response, buying informercials which will drive pricing up due to supply and demand. While the entry of larger companies is good news for local stations and national cable networks, the latest trend is bad news for the smaller entrepreneurs who initially supported the industry.

Did you know that your classified ad gets one full year exposure in the
Tuesday Report archives?!

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Autumn Trade Fairs & Holiday Expo's....

October 25: San Diego BXI Fall Trade Fair will be held at Natural Reflections, 190 Wilshire Road, Oceanside (CA).

October 25: Continental Trade Exchange is staging its 13th Annual Barter Expo Gift Show & Auction at the Milwaukee County Sports Complex, 6000 W. Ryan Road, Franklin (WI).

November 18: CTE Columbus is holding its Holiday Showcase at the Medallion Country Club in Columbus (OH).

December 3: CTE Cincinnati's Holiday Showcase will take place in Columbus (OH).

December 6: ITEX Denver Holiday Trade Fair will be held at 5293 Ward Road, Arvada (CO). For more info: (720) 889-1365.

December 7: CTE's 23rd Annual Holiday Expo is scheduled at Santa Rosa Veterans Memorial Building, 1351 Maple Avenue, Santa Rosa (CA).

December 14: TradeAmericanCard's 2003 Barter & Business Expo will be presented at The Grove of Anaheim. For more info: (714) 532-1610.

(Send your "holiday fair/expo information" to: bmeyer@barternews.com)

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

Nineteen years ago, in issue #8 of BarterNews, we reported on an entrepreneurial California vintner who embraced barter to build his winery...we feel his thinking about barter's applicability is as relevant today as that of two decades ago.

Vintner Finds Answer In Barter For Building Business

BarterNews: What are the start-up costs for a wine business like you've built here?

Vose: Over the first four years an owner will spend $7,000 to $10,000 an acre before there's any cash flow. I started developing Redwood Ridge Ranch in 1970. It took us nearly eight years to get a mature production.

Start-up costs in the wine business are really becoming prohibitive, because it takes such a long time to realize a return on your investment. A study done ten years ago reported that the cost to establish a 10,000 case winery, was one million dollars then. Here at Vose Vineyards we have a
17,000 case winery.

BarterNews: Is your 17,000 case production based on the acres you've personally planted?

Vose: No. Case production of a winery is based on the capacity of the equipment, i.e. the stainless steel tanks, barrels, and other equipment. So it's not necessarily relevant to what's been planted in the vineyard.

We also purchase grapes from others. So although our estate only produces three varieties—Chardonnay, Cabernet and Zinfandel—we also bottle Sauvignon Blanc, White Zinfandel, and Gewurztraminer.

BarterNews: With such an investment in production capabilities, it's obvious that marketing your wine is of major importance to your success. How does an independent vintner like yourself accomplish this?

Vose: Primarily we work through distributors in our state. We also work with wine brokers, paying them a negotiated 10%-15% commission for new business. Then there's mail order sales within California, where we sell to the consumer in case lots. Selling wine outside of California is more
difficult...because of the various state liquor laws, the wine must go to a licensed distributor in the state of destination.

BarterNews: Doesn't selling the majority of your wine within one state make your job more difficult?

Vose: Certainly! And that's not the only obstacle we have to face. Trade barriers limit the U.S. wine industry from exporting American wines, yet our government doesn't have similar trade protection from imports. So we see foreign wines flooding into our state and country, creating massive competition in the form of lower prices.

I'm not saying their product is inferior to ours, although I feel our California wines are equal to or superior to any in the world, but they are extremely competitive here in our marketplace because their governments subsidize them.

For instance, Italian wine can be sold in the U.S. for less than I can bottle my wine. On top of the trade barriers we are faced with another problem, the strength of the U.S. dollar. It greatly affects and restricts our overseas sales.

BarterNews: It sounds like the wine business is faced with numerous obstacles. Did you begin bartering to move your excess production?

Vose: Basically, yes. Even though I've operated two previous successful businesses before becoming a vintner, I'd never thought about barter as a way of merchandising.

Then about two years ago I became intrigued by the concept. Because I had a lot of inventory it certainly made sense to try it. Now I'm very comfortable with trading. In fact, I'm sold on it. I feel it's been extremely beneficial for my business. I'm into trading my wine for color ads in various California city magazines as well as printing for my brochures. I've also picked up a fork lift and computer equipment on trade.

Just yesterday I had a salesman call on me to replace an old labeling machine. I had budgeted $10,000 for the replacement, but he wanted more than that. So I told him, "Look, I really like the labeler, but I don't want to lay out that much cash. How about trading with me? I'll give you $10,000 in cash, and the balance in wine."

My experience when proposing such a trade to someone is usually quite positive. More often they will say, "Hey, I like that concept," rather than, "No, we can't do that."

But I've found that bartering requires both initiative and aggressiveness. Most people don't consider barter, because it's not part of their background of experience.

To be continued next week...

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Here And There. . .

• In this uncertain age it's easy to overlook the blossoming prosperity of China and India. Although locked in communist rigidity and relentless poverty not long ago, they serve as a useful reminder that the world economy is being forged into something brighter and stronger...and is on
  the mend.

  A powerful indicator underscoring the growth of China, India and, yes, Russia too, is the higher price of commodities from copper and nickel to oil. (Russia, incidentally, now produces more crude oil each year than does Saudi Arabia. It expects to supply 10% of U.S. oil imports within five years...double today's current share.)

• 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!

• If you own a small business and are considering whether international trade is right for your firm, you might want to check out a new web site where you can assess your international risk, www.assessyourinternationalrisk.org. The U.S. Chamber of Commerce, American International Group, and the U.S. Small Business Administration sponsor the new site.

• The U.S. now has 277,208 fast-food outlets from coast to coast. That's one for every 1,000 people in the country, up from 1,400 per person in 1990, and 2,000 per person in 1980. Subway Restaurants opens a new store in the U.S. every three hours on average, and Starbucks about every eleven hours.

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