Tuesday Report - August 22, 2000

BarterNet Now Includes 14 U.S. Retail Exchanges

BarterNet Corporation has announced the addition of two trade exchanges with 1,450 businesses to its rapidly growing network of established and profitable exchanges. Alamo Barter Corporation of San Antonio and Tradesource Phoenix of Arizona have both entered into affiliate agreements with BarterNet, with plans to merge at a later date.

San Antonio-based Alamo Barter Corporation, www.alamobarter.com, serves 750 members. Known as Barter Systems and Alamo City Trade until their merger in June of 2000, Alamo is the largest trade exchange in Texas. They are a member of the National Association of Trade Exchanges (NATE) and the Northside Chamber of Commerce.

Tradesource, www.tradesource.net, is the largest trade exchange in Arizona, serving over 700 businesses. It was founded in January 1987 by the mother and daughter team of Sylvia and Mary Ellen Rosinski. Phoenix-based Tradesource is a member of NATE, the International Reciprocal Trade Association (IRTA), the Scottsdale Chamber of Commerce, and the Phoenix Chamber of Commerce.

The BarterNet network has now grown to fourteen trade exchanges representing more than 21,000 businesses.

Don't Start Or Expand Your Business Without It!

Credit cards can act as a bridge to get a new venture over the initial financial hurdles, allowing the new business to pay its suppliers while waiting for receivables to come in.

In fact, even at the prestigious Wharton School of Finance the entrepreneur program suggests to students that they amass as many credit cards as they can, because during the early stages of a growing business one can be inundated with costs...even in the midst of plenty.

Even when orders are booming, an entrepreneur may not have sufficient income to pay suppliers. So credit cards can act as a stop gap or cushion.

There's no argument about the need for cash infusions in the early days of a new or expanding business. However, they should include in the curriculum another proven method of financing for entrepreneurial start-ups...the use of trade dollars.

Unknown to the school, and many others, are the merits of a good trade exchange and the many ways it can assist a fledgling operator. A new owner who provides needed products and services to the exchange's membership, can instantly borrow trade dollars against future sales.

Those trade dollars can then be used to make necessary improvements and selected renovations, purchase a myriad of needed merchandise, acquire valuable advertising, even finance a gala grand opening promotion.

By using trade dollars for needed products and services maximum cash flow is retained for paying those necessities...salaries, utilities, phone bills, rent, and suppliers.

Thanks to the exchange, cash at this critical time can be used to build the new enterprise rather than paying off credit cards of a banker.

The circle is completed when the new owner happily opens the door to exchange members, wanting to earn trade credits to quickly pay off the borrowed trade dollars.

Editor's Note: According to the IRS, credit card interest incurred as a business expense is deductible. So be sure to structure your borrowing accordingly.

Coming Events: IRTA & NATE

The International Reciprocal Trade Association's (IRTA) 21st International Barter Congress, "Mining for Gold," will be held in another month September 14-17 in Phoenix, Arizona. For more details e-mail: sheila@irta.com, or call (312) 461-0236.

And scheduled a week later in Atlanta, September 22-23, is the National Association of Trade Exchanges (NATE) regional conference. For details on this training session contact The Barter Company in Atlanta, by e-mailing tammy@barterco.com, or faxing (770) 591-3602.

Here And There. . .

Tuvalu, a tiny island nation located in the South Pacific, has seen its annual budget doubled since sellingits .tv domain name to Dot.tv, a Southern California startup. They agreed to sell their assigned country code, tv (for Tuvalu), in exchange for $1 million quarterly--adjusted for inflation--with a $50 million cap over 10 years.

In addition, the nation also bartered for a 20% stake in the company. It could be a very sound investment in that "tv" is the most recognizable two-letter symbol in the world. (Half the thousands of registered domain names are international.) Early this summer bidders were battling over a year's use of names such as China.tv, Free.tv, and Net.tv...for around $100,000 each.
Maxim, a men's magazine with a circulation of 2 million has a media barter deal for banner ads with Yahoo for $120,000 worth of ad space in their magazine.
Alan Wolfson, acting Treasurer of the National Association of Trade Exchanges, has accepted the position of President-elect, replacing Johnny Eagle who resigned the post after he joined forces with BarterNet. And Alan Zimmelman, NATE's executive director who resigned to take a position as Senior V.P. of BXI Exchange at their corporate offices in Burbank (CA), reports that he loves his new challenges.
The worldwide acceptance of barter continues onward...a recent availability of outdoor advertising in railway stations in China, was available through Intertradetech.com.
A barter bonus was used by United Air Lines to reward their best clients in acknowledgment of its recent poor performance (canceled flights and late arrivals). According to United the top 9% of their customers--frequent business flyers--generate 46% of their revenue. So frequent flyer "bonus" miles will be rewarded for patronage the rest of the year, in an attempt to restore confidence and win back those who are taking their business elsewhere.
iSolve, b2b marketplace for surplus inventory and corporate barter purchases, has purchased the new products inventory of defunct Zeta Consumer Products (plastic and paper products) for $625,000 from the bankruptcy court.
The online efforts of Ubarter, BarterTrust, and BigVine were inspirational to Lim Kean Beng in developing his online site . The site includes real time account information like current activity and transaction history, as well as online authorization.
5B Technologies, a designer and host for TradeNSwap.com, has taken over the barter site...agreeing to forgive all indebtedness in exchange for 100% site ownership.