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The Tuesday Report

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November 29, 2005

Written by Bob Meyer, Editor of BarterNews

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Dear Bob,

Your article, �Technology, Cash Discounts May Become Barter Industry�s Major Challenges,� in last week's Tuesday Report inspired me to write the following.

Sincerely,

Thomas H. Greco, Jr.
www.reinventingmoney.com

(Editor�s note: Mr. Greco has, for more than 25 years, been working at the leading edge of economic and financial restructuring. He is the author of Money: Understanding and Creating Alternatives to Legal Tender. Chelsea Green Publishing Company, 2001.)

Technology�s Effect On Future Of Barter Industry

The Tuesday Report of November 22 warned that technology is becoming �another growing competitor� of the barter industry. This is a warning that must be taken seriously. Fortunately, technology is available to all (to be used) and the barter industry is better positioned than anyone to take advantage of the new technologies. How is that so?

The key lies in understanding that the financial advantages that can be offered to trade exchange members are ultimately far more valuable than the marketing advantages that (the barter industry has) heretofore been emphasizing.

Your article noted that �today's typical exchange has a preponderance of service businesses as members.� The geographical limitations upon the delivery of services has up to now enabled trade exchanges, with their focus on local markets, to ignore the development of online markets, but that is about to change.

Citing technological and market developments such as Craigslist, eBay, and Google Base, with their new focus on local markets and the service sector, the article argues that �a major shift is underway in how consumers and small business owners shop for local services.� The truth of that observation is undeniable, and in fact, understates the case, which is further supported by considering such other market entrants as Matchbin.

One essential feature of Matchbin is its attention to local markets that are managed online and networked together. The Matchbin motto is, �locally focused while globally connected.� Another distinguishing feature of Matchbin is its strategy of building customer base by soliciting groups that are already connected. Its �Buddybin� feature enables participants to create networking connections similar to Linkedin or Friendster. Matchbin describes itself as �a dating service for your stuff.�

Their recent partnering agreement with eBay gives Matchbin a reach into eBay's huge established market, plus the credibility that goes with associating with a major recognized brand. In return, Matchbin promises to provide eBay with the localization that it has lacked up to now.

Clearly the future of marketing is online, and any trade exchange that does not soon extend its own marketplace into cyberspace will be left in the dust. But the most important point is this. Not only is technology changing �the way consumers and small business owners shop for local services,� it's changing the way they PAY for both services and products, not just locally, but globally.

We've already seen the emergence of payment options like PayPal, but that is just a minor shift compared to what's coming.

What's coming is the use of trade credits that will be internally cleared within the exchange network itself. Credit clearing within their own realms is what barter companies have each been doing from the beginning, so they are well positioned to take cashless trading to the next level.

The Universal Currency utility that has been established by IRTA (International Reciprocal Trade Association) is a step in that direction in that it provides a means by which exchanges can trade with one another. The ultimate step, however, is to provide a means by which a member of one exchange can trade directly with a member of another exchange. What will it take to accomplish that?

The basic requirements are for each exchange to establish an open line of credit for each of its members. Those credit lines will be adequately secured and insured. Further, it is necessary for participating exchanges to expand their membership to include all levels of the supply chain from retailers to wholesalers to manufacturers to basic commodity producers to consumers and workers, so that every member is able to pay their suppliers with trade credit.

Finally, each participating exchange must agree to adhere to an appropriate set of standard procedures and protocols relating to the allocation of credit lines and the management of internal operations. A small fee collected on each transaction will provide huge profits for those that can efficiently clear account balances and quickly ramp up the scale of their operations.

Editor�s note: A set of standards (standard procedures & protocols) as alluded to by Greco has been a topic of discussion at the last two International Reciprocal Trade Association conventions.

Trade Exchange Owners...

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Mardak Enthusiastic About Growing Revenues & Profits 

International Monetary Systems Ltd. (OTCBB:INLM) has announced its third-quarter earnings which ended September 30, 2005. Gross revenue increased 43% to $1,674,526 compared to $1,169,918 for the third quarter of 2004. The increased revenue was a result of five acquisitions and the internal growth of Continental Trade Exchange (CTE).

IMS�s year-to-date consolidated gross revenue for the nine-month period ending September 30, 2005, totaled $4,415,165 compared to $3,347,528 for the same period in 2004, an increase of 32%.

Total expenses for the nine-month period were $4,254,309 compared to $3,267,479 for the same period in 2004. Year-to-date net income for the first nine months of 2005 was $120,656, compared to $61,686 for the same period ending September 30, 2004, an increase of 96%.

CEO Don Mardak affirmed, �With year-to-date earnings up 96%, we are on target to hit all of our projected numbers. These continuing good results validate our growth-through-acquisition strategy.�

Get New Money-Making Ideas And Valuable Contacts!

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


�Applebucks� Used To Motivate Restaurant Employees

In a bid to reduce high turnover rates among their restaurant employees, Applebee�s International is following the management strategy of General Electric Co. (Applebee�s is the U.S.�s biggest casual-dining chain by number of restaurants�1,786.)

They�re doing it by ranking their hourly employees, and then rewarding managers for retaining the better workers. Managers get rewarded on how well they retain the top 80% of their staff, the �A� workers (top 20%) and �B� workers (the middle 60%).

To win employees� loyalty, managers award them �Applebucks� points, the company�s currency, which can be used to acquire various goods and services.

The system is working, having reduced the annual turnover rate among hourly employees by almost half in four years.

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


Angel Investors Pull Back From Betting On Start-Up Businesses

According to a recent study by the University of New Hampshire�s Center for Venture Research, �angels� are getting cold feet! (An angel is a wealthy individual willing to invest in a new business before anyone else does.)

Less than half (48%) of these investors are betting on new start-up businesses, a drop from 59% a year ago. And for years prior the figure was around 75%. Where are the �angels� investing? In later-stage companies, as their business plans appear better prepared and fleshed out. 

Venture-Capitalists Also Prefer Later-Stage Companies

�Big� is in, in the venture capital world these days. Industry data shows they�re putting bigger chunks of cash into larger, more-established companies and easing up on earlier-stage investments.

The VCs are opting for bigger investments in more mature companies because these firms might go public or be purchased more quickly than newer firms. The goal of any venture-capital investment is an �exit,� usually in the form of an IPO or an acquisition.

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Here & There...

  • The art-and-culture industry in Santa Fe, New Mexico, generates one out of every six jobs and $1 billion annually. Nationally, Santa Fe ranks second in art sales to New York.
     

  • Dubai Hotel will be getting Trump�s name, according to top Emirates developer firm Nakheel. The deal brings together two of the world�s flashiest developers, and marks Trump�s first foray into the Middle East. Trump isn�t required to invest any money, instead trading on his name to provide its brand to projects that could be entirely financed and built by Nakheel.

    Dubai is one of the world�s fastest-growing cities, and is emerging as a hub for business and tourism which last year doubled to 5.4 million.
     
  • 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!
     
  • American Express is launching a new type of insurance for frequent flier miles. The product, called Air Miles Protection, starts at $5.40 a month for 60,000-mile or 100,000-mile plans at seven airlines, including Delta Air Lines, United Airlines, and Northwest Airlines. If an airline ends its frequent-flier program and no other airline continues it, American Express will insure the miles that are lost.

    The program will give travelers cash value for unusable miles, i.e. $50 for every 3,500 miles they redeem. The money is good only for buying airline tickets with the American Express card, and is presently available in 38 states.
We welcome your comments, questions, and observations.
� Copyright BarterNews 2005. Redistribution of BarterNews content expressly prohibited without the prior written permission of BarterNews.

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