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New Merger Forms Trade Limited

Australia�s Largest Independently-Owned Exchange Now Encompasses The Length Of The Eastern Seaboard

Trade Limited Milestones:

The 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 Australia.
  • 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.


The 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 Australia!�

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

Car rentals were often quiet�after the morning rentals went out. And Attridge, an ideas man with vision, looked forward to attending the free seminar.

As 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 entrepreneur.

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.�

He 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 first client.

Shortly thereafter, the pair invested $20,000 and in return received 10% of the new barter company, plus the franchise for the Gold Coast.

And 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.

Today, QTE founders Johnstone and Attridge can proudly exclaim that they established, and now have the oldest continuous reciprocal trade exchange in Australia.

The 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.

After 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.�

Upon 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 business.�

He 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 days.�

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 energy.)

Because 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.

As his 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.

Saunig, 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!

Already 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.

�In my 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

One 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.

But 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 400,000.

And the 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 organization!)

The 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.

In 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.

The new 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 Convention.

In the 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. 

Then 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.

�After 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 everyone everything.�

Growth Of Australian Barter Industry Spurred On By Accountability

The 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.

In May 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.

An 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 functions including:

� Establishing, maintaining and dealing with a Debt Reserve Fund.

� 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.

Every 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.

� Six monthly compliance audits in relation to the exemption.

� Six monthly statutory declarations regarding the companies� abilities to pay their debts.

While 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 visible.�

David 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.)

Saunig 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.

�Our 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.

�And 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.�

But a 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.

�I 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 number.�

When 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.�

Pryke 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.

One of 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 area.

�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.�

What�s 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 this year.

They�d 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.

And one 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 barter organization.

How 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.�

�John Saunig

�Consolidation of the industry through mergers.�

�Mark Pryke

�Industry consolidation within countries. And eventually the next step, where the powers of one country make acquisitions worldwide.�

�David Johnstone

�For the 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).�

�John Attridge

What�s The 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 dollar stronger.�

�John Saunig

�The ability to use and facilitate transactions at point of sale, in a seamless way.�

�Mark Pryke

�To counteract the part cash, part trade mentality of the membership. Especially in tighter economic times.�

�David Johnstone

�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.�

�John Attridge


A Quick Look At Trade Limited�s Exciting Future In Real Estate

David 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 dollars.�

The 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.

The 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 commodity.

John 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.

The key 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.

Trade Limited has set-up a separate real estate company�Trade Realty�with Daryl Shepard, a real estate licensee, as its director.

While 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.

�We 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!

�Which 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.

�And 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.�

(Bourke 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.�

The 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.

What�s 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.�

But 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.

Consider that:

1) 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.

2) 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.

3) John 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 residential home.)

When 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.

4) The 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 estate development.

In short, Trade Limited�s future in real estate looks very exciting!


Trade Limited�s Idea To Revolutionize Their Barter Business

This 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 the business.�

He 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.

�Not 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.

Success 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 goal.�


Dealing With Building Subcontractors

When 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 blend.��


Dealing With Building Materials Suppliers

�When 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.

�In 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.�


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