The weekly newsletter for everyone interested in barter--the world's most versatile business tool!

February 11, 2003

Written by Bob Meyer, Editor of BarterNews

A Look At Some Great Barter Deals

From time to time we look back over some of the barter deals we've reported on in BarterNews...here's a sampling that should get your creative juices going!

Barter Made All-Time-Record $50 Million Home Sale Possible!

The highest price ever paid for a private home in the United States was the $50 million sale of the Thunderbird Lodge (the largest private estate on Lake Tahoe, a 140-acre property that included a 16,000-square-foot compound with more than a mile of shoreline) which occurred because of barter.

The Tahoe property was sold by Jack Dreyfus, founder of the Dreyfus Mutual Fund, to the Del Webb Corp (developer of the Sun City communities) in a land exchange.

The developer then traded the land to the Bureau of Land Management for 5,000 acres of property, which became a site for a third Sun City community.

There's Hidden Value In One's Various Assets--As This Trade Illustrates

When trading, always be aware of the hidden value of the asset, and by strategically negotiating you may be able to retain a very valuable portion just for the asking!

That's essentially what Prudential Insurance did when selling its Boston Prudential Center office complex for $700 million.

As part of the deal, the giant insurance company cleverly negotiated that the property forever retain the Prudential name--signage that is worth many millions. (Such value is seen repeatedly, as major corporations willingly and eagerly pay millions to have their names affixed to major sports stadiums.)

GNC Barters For TV Mention

General Nutrition Centers built its exposure on television by negotiating with nutritional supplement maker Twinlab Corp.

Recently they agreed to extend their contract and buy 20% more product if, in return, Twinlab would mention GNC in its television advertisements.

U.S. Government Voracious Barterer!

The Bureau of Land Management, an agency of the Interior Department, is the biggest federal landowner, controlling about 270 million acres.

It isn't widely known, but just about every week on average, some agency of the federal government trades public land for property owned by private interests that the government deems environmentally sensitive.

With little fanfare, the Bureau of Land Management barters tens of millions of dollars worth of land with real estate developers each year. Our first story on the Dreyfus property is one example. That deal pleased the League to Save Lake Tahoe, a conservation group, as they report a tremendous shortage of shoreline land open to the public.

BXI Names New President

The oldest trade exchange in the U.S., founded in 1960 by M.J. McConnell, has announced that John Cooper is being added to its executive management team.

Cooper holds an MBA in finance from Columbia University, and has had an extensive financial career, encompassing corporate lending and services as well as investment and trust services for high deposit holders, with some of the countries largest banking institutions. He was also a navy fighter pilot.

As BXI's new president, Cooper will be heading the development and implementation of specific initiatives to help generate more revenue for the entire BXI organization.

Duncan Banner Changes Roles

BXI also announced that Duncan Banner, VP of Sales and Marketing, resigned recently to devote more time to his San Diego BXI operation as well as his new efforts in handling Hawaii BXI.

900-Pound Gorilla Moves To Level Competition

If you think once you reach a certain size you can overcome the competition consider this. The world's largest company in annual sales, Wal-Mart, is taking some aggressive action in the marketplace to level the playing field with those they see as major competitors--Internet-only rivals.

Their strategy? Voluntarily charging online sales taxes in a move they hope will reshape the way business is done on the Web. In short, they hope to persuade states to mandate online sales taxes.

(Under current laws, catalog companies and pure online retailers only have to charge sales taxes in states where they have operations, such as a warehouse or distribution facility.)

Wal-Mart can expect an assist from the states that are eager to plug their budget shortfalls with help from internet taxes. Last year's internet sales totaled $79 billion, or 3% of all retail sales.

Moral of the story: Be ready for change, it's constant, and seldom what you expect.

ITEX Has New Board Of Directors

The new Board of Directors convened February 5, just days after the January 31, 2003, annual meeting of shareholders. The results of the annual meeting were certified by IVS Associates (independent election inspectors located in Delaware).

The Committee for the Advancement of Stockholder Equity (CASE) nominees won the majority of the votes. 10,880,870 votes were cast, with 7,000,000 in favor of the CASE nominees and between 3,200,000 and 3,700,000 for the incumbent directors.

The Board of Directors nominees receiving the highest number of votes at the annual meeting were: Steven White, Eric Best, John Wade, Alan Zimmelman, Spike Humer, and Jay Abraham. (Abraham removed his candidacy.) Humer will continue as President and CEO.

Reported Humer, "I'm pleased with the voting results and the caliber of the individuals serving on the board. Our commitment is to stay focused on increasing revenues, controlling costs, and improving our bottom line performance. Although the costs of the proxy contest will negatively impact earnings for the quarter ending January 31, we expect that the substantial long-term savings from reduced directors fees will greatly benefit ITEX."

Attention Trade Exchange Owners. . .It's GROW OR GO!

The magic bullet for growth is sales, always has been and always will be...yet the industry's overall growth is anemic. Why? Maybe it's because we're not providing on-going education about our unique way of doing business. Knowledge is always a pre-requisite to taking sustained action.

And for those newcomers, the lifeblood of an exchange, awareness of and understanding about the value of trading is even more important.

If you expect prospects to come aboard and your members to be more active traders, but you are perplexed when the results are less than you desire...there's a good reason. You must continually educate and motivate every month--month after month after month!

Such action is necessary because, let's face it, more cash business, not trade, is of paramount importance to your members. You must break through this "cash only" focus and redirect their thinking toward barter. Although most exchanges don't see the importance of doing so, many industry leaders are taking action and so can you.

As the owner of your own operation, there is an easy and inexpensive solution for moving forward...look into using The Competitive Edge newsletter. It's a camera-ready, 4-page, professionally written, informational marketing tool...available in PDF format as well as print. So regardless of how you reach your prospects and clients, you will have the necessary vehicle.

Written especially for you, the busy trade exchange owner, I am certain it will be the best investment you ever make.

For more information about The Competitive Edge, and how it can benefit you click here.

Get New Money-Making Ideas, and Valuable Contacts!

You can obtain these ideas and contacts in every every available back-issue of BarterNews.

• From our contact in Italy we have learned that although commercial barter is something new in Italy, bilateral barter (one-on-one trading) is not unusual in business. Trade exchanges have fees only on the selling side, and every product/service category has a different percentage fee of between 1.5% up to 30%. (At present, there is no tax reporting required by the Italian government.)
  
• The NATE Board of Directors has extended the deadline for taking advantage of the early registration discount to February 17 for the Atlanta convention. For more details contact: BarterTrainer@aol.com.
  
• The U.S. accounts for about 5% of the world's population, but American consumers borrowed about 60% of all debt raised globally--$2.4 trillion.
  
• The Financial Accounting Standards Board (FASB) has ended the public comment period, and will now craft a final proposal on whether stock options should be treated like any other corporate expense.
  
• A sign of the changing times... Mutual funds hold a stock position in a particular company for eleven months on average. A decade ago the average was six years.
  
• "I'm not so sure we (USA) will be the economic powerhouse we once were," was the message from Bill Gross, managing director of the world's largest bond fund, Pimco, which manages about $304 billion in fixed-income securities. That was his monthly comment, wherein he anticipated the perpetual containment costs--monetary and otherwise--of homeland security and involvement in the Middle East will deter investment in the U.S. and seek more attractive ports of call.

  The esteemed financial writer for the Los Angeles Times, James Flanigan, contends Gross's hand-wringing is terribly overstated. And ignores a fundamental lesson of history: the U.S. economy is remarkably resilient, and has successfully worked through tough times before, only to emerge stronger.

• Amtrak is offering college students throughout the Eastern Seaboard of the U.S. an opportunity to attend the Black College Spring Break activities in Daytona Beach (FL) March 28-30. Cinnabar Media Services, the barter division of Cinnabar, will be offering students inexpensive packages to the event. For more information contact Cinnabar Media (843) 722-3700 ext. 144.

• Cost cutting has brought the average break-even hotel occupancy level down to the lowest level it has ever been (47.5%), according to research PricewaterhouseCoopers. Until 1995, hotels needed to fill about 60% of their rooms to break even on average. The cost cutting downsides at many hotels are longer checkout lines, shorter room-service hours, and poorer service.

• The world's fastest-growing advertising market is Russia. Ad spending increased 51% last year, with TV advertising jumping 76%. The expansion reflects the explosive growth of the Russian service sector since the end of communism. A decade ago there was little concept of public relations and marketing, as such disciplines didn't exist in the Soviet command economy. Their learning curve has been remarkable.

• Online fine art auctions have proven to be less than expected...Sotheby's Holdings has ended a three-year partnership with eBay after just one year. Sotheby's reports they had losses of $100 million with online auctions since 1999.

  (For eBay, the move was the latest sign of the problems they've had in entering the high-end art market. They acquired Butterfields auction house in 1999 for $260 million in stock then sold it last year for a tiny fraction of what they paid.)

• 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) to sign up!