New Merger Forms Trade
Independently-Owned Exchange Now Encompasses The Length Of
The Eastern Seaboard
Trade Limited Milestones:
merger of the largest trade network in Queensland (QTE) and
the largest trade network in New South Wales (ContraCard)
becomes one �super exchange��Trade Limited� now the largest
independently-owned trade exchange in Australia.
First and oldest continuous reciprocal trade exchange in
First reciprocal trade exchange to accomplish I.R.T.A.(A)
and Australian Securities Commission compliance.
First instigator and founding members of the I.R.T.A.(A)�
International Reciprocal Trade Association /Australasia.
First reciprocal trade exchange in Australia to
represent Australia in the world markets of trade.
First to become the largest independent reciprocal trade
exchange in Australia.
First reciprocal trade exchange that has effectively
consolidated five major exchanges over four years.
advertisement read, �It�s not real estate, it�s not
financial services, nor insurance, tele-marketing or
multi-level marketing�it�s the newest thing to hit
Thirty-one-year-old John Attridge was intrigued. As the
co-owner of a car rental business, along with his
twenty-six-year-old partner David Johnstone, their
afternoons in the operation of Westrent Mazda
rentals were often quiet�after the morning rentals went out.
And Attridge, an ideas man with vision, looked forward to
attending the free seminar.
advertised, �the newest thing to hit Australia� back then in
1988, was Australian Contra-Banc. A newly-formed barter
company on the Gold Coast, which evolved when Gary Feinberg
of the U.S. (who had operational experience with trade
exchanges in Los Angeles) visited Australia and met a local
Together, they felt what was successful and growing in
America could be duplicated on the Gold Coast. To spread the
word as fast as possible they held meetings, to educate the
attendees and get them interested in the new concept.
Attridge was impressed with what he saw, �The penny dropped
immediately� he related. �I thought, wow, this is the best
thing I�ve ever heard of, in terms of how a car rental
company can utilize its unused inventory.�
excitedly told Johnstone, the more analytical and systematic
thinker in the partnership, about the new fantastic concept.
The two of them were in the front row at the next seminar.
�We couldn�t believe that no one had thought of this
earlier,� Johnstone explained.
Attridge added, �We figured our cost to trade would be about
the commission we had to pay the exchange, inasmuch as a
sitting car rental was a wasting asset for us.�
Consequently, their car rental firm became Contra-Banc�s
thereafter, the pair invested $20,000 and in return received
10% of the new barter company, plus the franchise for the
their education in the trade exchange business began. �We
were like sponges, soaking up as much information about this
way of doing business as we could. It was an exciting time,
learning about this unique technique.�
Johnstone continued, �Despite the fact that Contra-Banc
didn�t make it, it was the best investment we�ve ever made
because we were introduced to a viable new business
concept�which enabled us to go it alone.�
Queensland Trade Exchange (QTE) subsequently was established
on the Gold Coast in July 1990, after Contra-Banc�s demise.
In May 1992, an additional office was opened in South
Brisbane (one hour drive to the north) and in May 1997,
continuing north another hour�s drive from Brisbane, a third
office was located on the Sunshine Coast.
QTE founders Johnstone and Attridge can proudly exclaim that
they established, and now have the oldest continuous
reciprocal trade exchange in Australia.
ContraCard operation surfaced one year later in a more round
about way, when Mark Pryke, then 28 years old, was
introduced to the concept. Propitiously, at the time Pryke
learned about the trade exchange business, he had just
finished traveling throughout Asia, having taken six months
off from his currency option position with David Coakley
Ltd. in London.
relocating in Sydney, where he worked for Auspac Securities,
as a registered dealer on the Australian Stock Exchange, Pryke�s
first encounter with barter was through a job interview for
a trade broker.
Although he didn�t take the job he sensed an unusual
opportunity, and was enthused about the deal-making
possibilities�his major interest and forte in the business
world. Right from the beginning he thought, �This is going
to be enormous someday.�
further investigation, and after talking with Johnstone and
Attridge (who at the time were barely underway), Pryke
recalled, �They were so excited about it I was just bowled
over, and I knew right then I had to get into this
chose to open a trade exchange in Newcastle (a city about
two hours drive north of Sydney) with a friend of his
wife�s. �We started on a shoestring, and,� he smilingly
admitted, �we did the hard yards, putting in the 18-hour
Meanwhile, John Saunig�then a 35-year-old dynamo�routinely
scheduled one day a week when he�d work 24 hours around the
clock. Squeezing the maximum productivity out of every hour
of the day and night. �Back then,� remarked Saunig, �I
thought sleep was for wusses.� (After contacting pneumonia
several times he�s since learned to harness his enormous
Saunig owned a precious metals refinery as well as a
chemical company, a business friend of Saunig�s who was a
member of a trade exchange, suggested he join an exchange in
Sydney. Seeing an opportunity to make retail sales to
swimming pool owners of his chemicals, which were heretofore
sold only to wholesalers, Saunig signed on.
barter sales grew, Saunig noticed that Mark Pryke, located
in Newcastle, was brokering most of his company�s barter
sales, and a friendship soon developed. Pryke later
approached Saunig about the possibility of buying out his
Newcastle partner, and acquiring another small exchange�
Illawara Trade Exchange.
after a conversation with his wife, who agreed to help out
if needed, took advantage of the offer. The new company was
grouped together under ContraCard. Subsequently, they bought
out the Sydney Trade Exchange in 1995 �the jewel of the
Sydney trade crown. Saunig had come full circle�buying, with
Pryke, the exchange he had joined just a few years earlier!
the owner of two successful corporations, Saunig took to the
barter business, �It was the opportunity to build an empire!
�I believe now, as I did five years ago when I got involved,
that if we do this right, not only will we have the
opportunity to make some real money, but we�ll have the
opportunity of talking and working with some really big boys
to create something massive.
other businesses,� he pointed out, �especially the precious
metals business, you needed a lot of money to make even more
money. Whereas in barter, you can put exciting deals
together for others and earn a commission. Plus you get the
joy of doing the deal!
�Additionally, in the metals business, people always wanted
me to personally handle their silver and gold. In such an
operation one is limited as to what can be done.
�Really,� Saunig emphasized, �this is so creative, and
allows a person to deal, which I love to do. One minute
you�re talking to a client about trading $1,000 of flowers a
month...and the next phone call could be a major property
deal worth $3 or $4 million! �It�s an unbelievable business,
and that is the most exciting thing to me.�
The Most Competitive
Market In The World
would hardly expect to find the �hotbed of competition� in
the barter industry to be located in one of the most
spectacularly-beautiful regions of the world, where
vacations by millions of tourists is a major emphasis.
arguably Australia�s �Gold Coast��where it�s �beautiful one
day and perfect the next!��with its pristine beaches and
high-rise condo�s and world-class five-star hotels, is just
that: the most competitive market for trade exchanges in the
world. Twelve trade exchanges are aggressively competing
with one another in this area that has a population of
battle for market-share will soon be heating up as two major
independent exchanges, Queensland Trade Exchange and
neighboring New South Wales� ContraCard, have merged to form
Trade Limited as of July 1st. The merger is a culmination of
the two companies� remarkable parallel growth, similar
thinking and business operations, plus years of very unique
reciprocal operations. (They were so integrated that clients
of either exchange could buy and sell within the other
merger is just the initial step in an ambitious five-year
expansion program which will see Trade Limited acquiring
outside companies (vendors) and introducing new equity
programs to better service their clients.
addition, an enterprising expansion is planned into other
key Australian states, and ultimately throughout Asia. Trade
Limited is now the largest independently-owned trade
exchange in Australia, with in excess of 5,000 clients and
an annual turnover (sales and purchases) of $120 million.
alliance, which covers all of the east coast�Australia�s
most populated area�also brings four strong directors
together, in an equal shareholding and coordinated
management capacity. It has never been done before in the
Australian barter industry.
Interestingly, after eight months of talking, the
culmination of the merger agreement was finalized in the
United States last September, when Queensland�s David
Johnstone and John Attridge, along with ContraCard�s Mark
Pryke and John Saunig, were in Las Vegas for the
International Reciprocal Trade Association�s Annual
wee small hours of the morning in the Golden Nugget coffee
shop, after jointly winning $26,000 on the Baccarat tables,
they agreed that the time was right to move forward and
finalize their eight-month-old merger talks.
they could get on with their ambitious business endeavor,
which included naming the new organization. �We spent months
on the name of our new entity. We wanted our logo to be our
name�short, sharp and precise. It had to tell what we do,
and that limited us to a few names,� related Johnstone.
exhausting many different avenues we chose Trade Limited. We
trade, so it�s Trade. Limited means it�s a public company. A
good analogy is Rupert Murdoch�s News Limited. He sells
news. What do we do? We trade. That�s the story. It tells
Growth Of Australian
Barter Industry Spurred On By Accountability
rapid growth and development of the Australian barter
industry has evolved because of their entrepreneurs� (trade
exchange owners) vision, and realization that an association
of one�s peers would enhance everyone�s success.
of 1993 the Australian Reciprocal Trade Association was
established�later to become the International Reciprocal
Trade Association, Australasia (I.R.T.A./A). David Johnstone
was voted in as chairman and has continued in that capacity
to this day. John Saunig is a director.
additional impetus, this time from the outside, spurred the
industry onward. It came from the Australian Securities
Commission (ASC). A government body that sought to minimize
the risks to members of a trade exchange, and required every
exchange operating in Australia be a public
company...totally accountable by having a trustee (an
independent outside party) perform various duties and
Establishing, maintaining and dealing with a Debt Reserve
Maintaining proper books of the Cash Debt Reserve.
Maintaining books for the Debt Reserve Fund, and providing a
copy of the Auditor�s Statement to all members.
Reviewing the credit limit as managed by the trade exchange,
and ensuring collateral security for threshold figures.
exchange is also required to meet, and bear the costs of,
the following compliance requirements of the ASC:
Annual audited financial returns as a public company.
monthly compliance audits in relation to the exemption.
monthly statutory declarations regarding the companies�
abilities to pay their debts.
compliance has been expensive, both in time and money, it�s
been partly responsible for the rapid acceleration that�s
taken place. And it�s brought an immense professionalism and
accountability to the Australian trade exchange industry.
John Attridge reinforced this by saying, �I have no doubt
that this type of accountability will spread to other parts
of the world as our industry expands and becomes more
Johnstone and Bartercard�s Wayne Sharpe, represented and
worked on behalf of the trade exchange industry in dealing
with the ASC dictates. It was Johnstone who wrote and
drafted, as well as devoted six months of full-time efforts
to the compliance package. (He actually stepped out of the
day-to-day management of his exchange to draft the package.)
believes all the work and expense to meet the compliance is
invaluable, �We�ve created trading rules and accountability
for ourselves that�s brought a whole level of management and
legitimacy to the trade exchange industry.
guidelines mean facing two compliance audits by a registered
auditor each year, which will then be issued to the ASC.
Each company also must supply a members� information
brochure. This is the law, and it shows we are serious about
offering the security our members need.
frankly,� he admitted, �as an industry we�ll never get to
become the fourth tier of the financial community unless
there�s this type of regulation�totally audited regulated
accounts. Anyone in the public sector can scrutinize our
accounting system, they can request different balance sheets
and ring up (phone) the ASC. We have to be very clean�and
that�s the way it should be.�
barter company, regardless of the industry�s regional
regulations, doesn�t grow and become a leader in the
industry without a passionate servicing of its members.
think we�re unique within Australia,� Johnstone began, �in
that any person, from staff to members, has personal access
to all four directors. There are no barriers here. In our
organization a member is looked upon as a person, not a
asked why he feels Trade Limited is different, Johnstone
quickly added, �We were always a regional operation, until
this merger. And we had to compete against larger, more
national-type organizations. We needed to develop a
competitive edge and it was befriending our members, and
making the extra effort to fulfill their needs�just as one
would do for a friend.�
pointed out that the new merger will operate in the same
manner, by keeping its eye on the three critical areas of
the business� brokering, administration and new sales�with
each operating like an engine room. �Without any one of them
we can�t have a successful company,� he asserted.
the strategies Trade Limited uses to assure customer service
is the forging of close relationships�even making
investments�with tangent businesses that are very important
to the membership-base. In addition to their real estate
efforts (see side story) Johnstone disclosed, �We provided
financial assistance to a company, enabling them to get into
the travel agency business, which helps our members in this
�However, our most recent investment, which is currently
under negotiation, is the complete ownership of a
fully-operational printing company. We believe that by using
the first shift wisely, and putting on a second shift
devoted entirely to barter, we will be able to additionally
provide a million dollars�or more�worth of valuable printing
services, to our members annually.�
most important to the future of the organization? Where will
they put their money? All four directors were questioned
separately, but had very similar thinking�money will be used
for expansion, such as opening a new office in Melbourne
also put their money into training additional staff, which
they believe is their most valuable asset. Pryke declared
that they will invest it in their people so they can build a
better infrastructure. Attridge, having a strong sales
mentality, believes supporting a larger sales staff would be
of major importance.
message was abundantly clear in all of the conversations
with these four young, but experienced and aggressive
directors. They expect to build a world-class, premier
competitive are these guys? When asked how many trade
exchanges Australia can ultimately handle, Saunig grinningly
replied, �Only one�Trade Limited!�
What�s The Biggest
Change On The Horizon?
�In Australia it
will be the inclusion (or embracement) of barter in
the corporate sector�which is virtually nil now.�
the industry through mergers.�
consolidation within countries. And eventually the
next step, where the powers of one country make
professionalism of the industry to grow�there�s the
need for accountability. I have no doubt that this
accountability will spread. I think the present
I.R.T.A. guidelines in the U.S. on deficit spending
is a recipe for disaster, because it�s ridiculously
high. The formulas we must adhere to in Australia
are workable, and provide enough trade dollars to
stimulate turnover (trading).�
Biggest Challenge For Trade Limited?
�Making our trade
dollar more competitive than a cash dollar, due to
its leveraging ability. The key to do so will be for
our company to get into the real estate development
business. By eliminating the middleman and providing
real estate on a trade/cash basis we�ll have our
members investing their trade dollars into equities.
�When they can�t get
enough trade dollars, or need more for a purchase,
they�ll lower their prices�which makes our trade
�The ability to use
and facilitate transactions at point of sale, in a
�To counteract the
part cash, part trade mentality of the membership.
Especially in tighter economic times.�
�Fulfillment of our
clients� needs. Having an economics background. I
see the barter marketplace as a purchase-driven
economy. Therefore, we must satisfy the purchasing
requirement of our members. It�s not enough to
promote sales�we must direct purchases.�
A Quick Look At Trade
Limited�s Exciting Future In Real Estate
Johnstone expects the merger to result in a huge demand of
Gold Coast property investments from Sydney. �Trade Limited
will open the floodgates for investment in Queensland,� he
declared, �with some 5,000 members able to partly fund the
purchase of investment properties with Trade Limited
company anticipates doing $75 million turnover in real
estate (sales) this year. Members are typically able to buy
property with the down payment�30%�paid on trade.
real estate expertise exemplified in Australia came about
because media availabilities, a big part of the barter
industry in the U.S., is closely controlled in Australia.
It�s, therefore, not nearly as accessible as a tradable
Attridge, the company�s real estate director, works closely
with three other real estate specialists within the
organization. �It�s taken us considerable time to develop
solid, trusting relationships with various developers
(builders). They now understand the barter system and want
to work with us,� he explained.
to Trade Limited�s success was developing these
relationships, so they could move beyond the now-and-then
selling of an individual home. Instead, they�ve become an
integral part of the entire builder�s development, which
enables Trade Limited to obtain substantial blocks of
inventory for their clients.
Limited has set-up a separate real estate company�Trade
Realty�with Daryl Shepard, a real estate licensee, as its
Philip Brown, working out of the Newcastle office, handles
the company�s real estate and property development efforts
in that region of the country.
According to Attridge, Shepard and Brown, Trade Limited acts
as the real estate agent for approximately 10% of what a
developer will build�on an on-going basis. If, for example,
a developer is putting in 40 units, Trade Limited knows that
it will get the first four to sell. A cash commission is
paid by the developer to Trade Limited on the total purchase
price of the property.
Sub-contractors and materials suppliers pay the normal
commission on all the trade business they do through Trade
Limited. When a developer sells on a 50% basis, under the
example given, the developer only has 5% invested in trade.
How far the relationships grow with developers revolves
around the spending opportunities, and Attridge says Trade
Limited leaves nothing to chance.
know the construction manager on the site is not going to
focus on spending trade.� Rather, their thinking said
Attridge is, �Hey look, my job is to get these buildings up.
I�m not going to worry whether your plumbers, or building
materials, will be here on time!
is why,� Attridge reasoned, �pre-planning is a must. We have
a building specialist (Laurie Bourke) working directly with
the developer as soon as we sign the contract.
it�s his sole job,� he disclosed, �to get with the developer
and construction manager, letting them know they�ll have
$100,000 or $200,000 coming within a month�and it�s time to
start spending it.�
talks the talk, having been a tradesman all of his life.)
Basically, Trade Limited assists a developer in two ways. By
helping them make pre-sales as soon as possible. Which
enables the developer to go to his banker, as well as the
valuer�s (appraisers) and say, �I�ve got four already sold
at this price.�
Secondly, when the time comes to move on to the next
development, there are sometimes a few unsold units. And
Trade Limited assists in these sales, as well.
Attridge succinctly summed up his company�s objectives,
�It�s our job to make it obvious that we are a problem
solver.� Adding, �Pre-sales are most important, because they
set the values.�
company is happy with their progress. Although, admittedly,
it�s been a real educational process. Sometimes it�s rather
slow going, having to teach and build credibility with each
new banker or finance provider. �We�ve had to show them how
the system works,� Attridge claimed.
the potential of this segment of Trade Limited? Shepard,
raising his eyebrows, exclaimed, �We have a huge potential
right here in Australia, for the next five years.�
it�s no secret that Asia�s huge, growing population is going
to face an unprecedented demand for real estate. So,
projecting into the future and considering the many
advantages the company has on its side, dynamic growth in
this area is almost a given.
Trade Limited is the longest established barter company in
Australia, having compiled a stellar track record, in
addition to having a base of some 5,000 potential investors.
Barter, through the use of trade dollars, will play an
important part in real estate acquisition for their growing
membership base. Investing trade dollars into an asset
accumulation program is a proven way to build wealth.
Saunig has a background in real estate development, having
developed a number of projects, in addition to the
construction of his million dollar home on Bonnet Bay, in
Sydney, a decade ago. (He was recognized for his creativity
by winning three national building awards: Best Use of
Timber, Best Workmanship, Best Design�for a multi-level
Trade Limited decides to become a developer, in addition to
their existing real estate services, think of the additional
leverage they will have in the marketplace.
company�s merger plan included the desire to float (become a
publicly-traded company) by its fifth year. That way
additional money would be available for aggressive real
short, Trade Limited�s future in real estate looks very
Trade Limited�s Idea To
Revolutionize Their Barter Business
year�s anticipated sales of $75 million in real estate will
only be the first step in Trade Limited�s enterprising real
estate plans. According to John Saunig, �Someday we will be
going into the real estate development business. I�ve
personally done a number of developments and I understand
continued, �When you mix trade with real estate you get a
fantastic explosion! We have plans which will put together a
package for our entire membership�so that everyone can own a
little piece (a percentage) of a property. We will manage it
for them, plus rent out the property.
only will that generate a little monthly cash flow, but
after five or ten years, when the building is sold, they
will be converting their trade to cash,� Saunig beamed.
with such an adventurous effort could well mean that Trade
Limited may create a currency that would be more valuable to
the client than cash. Because, in their desire to earn more
trade for investment purposes, members would lower their
prices to generate trade dollars!
�Imagine a currency,� enthused Saunig, �that enables one to
buy below prevailing cash prices�plus it�s done at the
company�s variable cost of doing business! Well, that�s our
Dealing With Building
working with sub-contractors (plumbers, plasterers, etc.)
Trade Limited has a work contract that requires a bid for
the job. It includes a trade component.
Attridge clarified, ��Look,� we tell them, �there�s 150
houses to build. This is the price we�re willing to pay.
Come back with a bid�either full trade or on a cash/trade
Dealing With Building
working with building materials suppliers,� Attridge pointed
out, �we explain how we operate. Giving the prices the
developer has been quoted for materials, and the number of
houses the developer is building. We also tell them that the
developer is willing to pay mostly cash, but a percentage of
the sale must be in trade dollars.
other words,� he added, �we�re saying these are the plans,
these are the requirements. Come back to us with a matching
price, including a trade component. If you can do that�and
supply on time�then you can win the contract.�