Written by Bob Meyer, Editor of BarterNews

IRS Encourages Barter Companies To File Electronically

A recent letter from the Small Business/Self-Employed Division of the Department of the Treasury, Internal Revenue Service, to barter companies contained the following information:

"Bartering exchanges are required to file Form 1099-B for each person who exchanged property or services through a barter exchange including payments to corporations.

"Generally, Code Section 6045 and Treasury Regulation 1.6045-1(e)-(k) require that bartering exchanges file Form 1099-B with limited exceptions. The Form 1099-B reflects the gross amounts received by each member of the exchange, which includes cash received, the fair market value (FMV) of goods and services received, and the FMV of trade credits or bartering dollars credited to the member's account.

"You may obtain general information and answers to questions about filing information returns by visiting your local IRS office, viewing our website at www.irs.gov or calling (800) 829-0115. Publication 1220, Specifications for Filing Forms 1098, 1099, 5498 and W-2G Magnetically or Electronically, contains detailed information regarding information filing requirements. To
obtain a copy of Publication 1220, you may call (800) 829-3676 or visit us on the web at www.irs.gov.

"The IRS encourages you to file electronically. Electronic submissions are filed using the File Information Returns Electronically (FIRE) System, which operates 24 hours a day, 7 days a week. You may access FIRE by calling (304) 262-2400 or at www.irs.gov."

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Aspen Conference Shows Differences In Thinking

Recently, 225 international deep-thinkers met in Aspen to debate the state of the world. Included in the group were business people, scientists, government officials, and ex-presidents.

And other than the optimism of some American entrepreneurs (inventor Dean Kamen showed a new device that can provide electricity and clean water to the world's poor, while Idealab's Bill Gross introduced a little solar-powered generator that could become a Third World staple), pessimism was especially thick this year, according to host Fortune magazine.

Examples include a comment made by marketing guru Seth Godin, "What's getting worse is our pessimism, our addiction to bad-news media and our nerves." One of the Arab world's most prominent businesswomen, Lubna al Qasimi, of Dubai, said, "Poverty is on the increase. Illiteracy is on the rise."

Charles Schwab CEO Dave Pottruck embodied as well as anyone the conference's mix of gloominess shot through with shafts of optimism. In a brief speech on the opening night he declared that he was "horrified" by the growing gap between "haves and have-nots" in the U.S.

The next day, during a panel on CEO power, he complained that executive compensation "has run completely amok." But he also cited the Internet, the mapping of the genome, and the fall of communism as evidence that life on earth is getting better.

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Reader Shares Story, Reinforces Barter's Versatility

We received an interesting letter last week which we have reprinted below. Following it is the article that appeared in the Tuesday Report to which the writer referred. If you'd like to read many such interesting stories, please refer to our archives—four years of back issues—found at the bottom of the current report.

Hi Bob,

I went to a fifty member Seventh-Day Adventist Church on Orcas Island in the San Juans yesterday. Next to the church was a eighty student SDA school. I serve on a school board here in Portland, and was curious how they subsidized such a large school with so few church members.

We had lunch with one of the teachers, so I asked about this issue. The teacher pointed out that several of the members were affluent such as one of the people I met in a small prayer group, Mike Parnell.

The pastor I went up to Orcas Island with, later said Mike was likely a billionaire. So when I just did an internet search for "Parnell oakley sunglasses" your Tuesday Report of 5/29/03 popped up. If I thought I could trade with them today I'd contact Mike but I know Oakley is very protective of the brand value. If they had a slight imperfection on a pair of sunglasses they would scrap them rather than trade or discount them.

—Carl Buchanan

(The following is the article to which Buchanan is referring.)

Oakley Sunglasses Founder Used Barter To Get Started

Jannard's Savvy Use Of Barter Reinforces The Amazing
Versatility Of Barter—A Premier Marketing Tool

In 1979, when he was 30, Californian James Jannard designed his first protective eyewear. It was a high-impact part goggles, part sunglasses product for skiers and bicyclists.

Demand for the hybrid goggles/sunglasses got a huge boost in the summers of 1985 and 1986, when Greg LeMond wore a pair on his way to becoming the first American ever to win the Tour de France bicycle race.

But what lifted Oakley sunglasses from being a specialty product to becoming a mass-market smash was Jannard's use of barter. He and his salesmen provided many pairs to top athletes during the late '80s and early '90s.

At a golf tournament Oakley glasses were put in the hands of a young basketball player—Michael Jordan. The Chicago Bulls star later struck a deal before Oakley went public, wherein Jordan would receive stock for his endorsement.

Businessman/celebrity Philip Knight of Nike was rarely photographed without his Oakley sunglasses. Tennis star Andre Agassi charged his friend nothing for wearing Oakleys. And baseball star Cal Ripken, Jr., garnered Oakley reams of notoriety by being seen in its distinctive-looking shades.

As he understood barter and promotion, so did Jannard grasp the principles of smart marketing. He sold mainly through specialty shops and deliberately limited the number of outlets that could sell his gear.

When he took Oakley public in 1995, Jannard and his chief lieutenant Michael Parnell took out $154 million in cash...and they still held 72% of the company's stock.

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

November 16: BXI Ventura-Santa Barbara 3rd Annual Holiday Trade Fair will take place from 10 a.m. to 4 p.m. at the Oxnard Radisson Hotel. For more info: (805) 376-9466.

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

November 23: Barter Systems Inc. has scheduled its Holiday Gift Show at Martin's Crosswinds in Greenbelt (MD).

December 2: New England Trade's 7th Annual Barter Expo will be held at the Danversport Yacht Club in Danvers (MA). For more info: (781) 388-9200.

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' 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.

Here & There...

• International Monetary Systems (OTCBB:INLM) announced that it enrolled 170 new member/clients in the third quarter of 2003, the highest quarterly total of client sign-ups in the company's history.
  
  "We are very pleased with the record-setting results of our outside sales staff in the third quarter," commented John Strabley, executive vice president. "This makes a strong statement about our ability to grow internally, and not just through acquisitions."

• 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!
  
  
• China's demand for raw materials to feed its booming economy has pushed up freight shipping rates-into uncharted territory-as the world's oceangoing bulk carriers are filled near to capacity. (Shipping rates are at levels never seen before.)
  
  Freight charges show no sign of declining, as China's consumption of raw materials is forecast to keep growing at breakneck speed, putting further pressure on capacity. The number of new carriers, with capacity expected to rise 2.5% this year and 3% next year, is not expected to match a predicted increase in demand of 10%.
  
  Further fueling the growth will be China's auto sales, which are expected to be an engine of growth for the automotive industry. In five years it is expected to replace Japan as Asia's largest auto market.

• If you've missed any of our weekly Tuesday Reports the past three years we have an archive of issues for you at the bottom of this week's letter...check it out!

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