Written by Bob Meyer, Editor of BarterNews

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There Are Many Ways To Barter...Here’s Another Example

Last week we reported on how billionaire John Malone’s Liberty Media was pursuing bartering its stake in Sprint for 6,500 cellphone towers. The exchange, as opposed to a sale, would enable both Liberty Media and Sprint to avoid a heavy tax bill.

Now Malone is looking at another deal, this time with Rupert Murdoch’s News Corp. It’s a sophisticated but increasingly popular “exchange” method known as a “cash-rich split-off.” It would involve News Corp.’s putting cash and a business into a company that could be traded for News Corp. shares held by Liberty. The technique once again allows Liberty to avoid paying taxes on the increase in the value of its News Corp. shares.

Interestingly, cash could account for as much as 90% of the value of the company being bartered. But the key to a cash-rich split-off is that the business to be bartered needs to have been operated (by News Corp.) for at least five years.

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Trade Promotion Grows As A Form Of Barter, Exceeding $100 Billion Yearly

Euphemistically referred to as “trade promotion,” paid placements (made in the form of product) by cereal makers and other food purveyors for eye-level shelf positioning, has been practiced for decades. This form of marketing for superior positioning is another example of barter’s use, but has not been identified as such.

Lately, preferential displays or paid placements are appearing on travel sites like Expedia, Travelocity and Orbitz. Yes, coming into vogue are special deals with particular hotels and airlines using trade promotion to have their online offerings listed ahead of competitors. And, thus, making it harder for the Internet purchaser to spot deals.

Trade promotion by consumer goods manufacturers in the U.S. alone now tops $100 billion a year! Food retailers, consumer electronics, and office supply stores have long offered superior product placement in the aisles and on the shelves in their retail establishments across America. With the travel industry now getting into the paid placement business, the $100 billion figure will be even higher!

Barter as a business tool, when looked at realistically and in an expanded view where it’s used in a myriad of places, is an incredibly effective and productive tool!

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From the Archives of BarterNews...

Part III: How A Trade Exchange Can Barter With The Local Media

(By V. Ray Brown)

There are three basic ideas that you need to get across in your presentation to the media. They are selling, record keeping, and procuring.

SELLING: The media company has a sales force in place. It is their responsibility to go out and bring in the cash business that is available. At this job they are professional (we hope). But when they attempt to deal in barter, they are out of their field.

Usually commissioned sales people do not want to handle trades, because either they don’t get paid or get paid much less than normal. And when they are negotiating the trade, they only have one item to negotiate with...their media.

The barter company deals exclusively in trades and can bring a multitude of items to the bargaining table. Why shouldn’t the media be represented by a professional trade salesperson? Why should the media be placed in a position to give 2 or 3 for one?

RECORD KEEPING: If you can get the business manager to join in your presentation meeting, you should get a great response. A major problem with media trades is record keeping. The accounting department hates trades because they are seldom consulted when a trade is made, and have to ask for information about how to keep the books.

Accounting people usually see the salesperson as a guy who tries to make life miserable for them. When you present your record keeping system, look for a bright glow on the business manager’s face. “You mean you will tell us ALL purchases and ALL sales EVERY MONTH!” Believe me, record keeping is a big part of what we can do for you in media presentations.

PROCUREMENT: You need to understand the way the media manager usually enters into trade. One day he will realize that there is a need for carpet or printing or whatever. He calls a sales team together and says, “Go out and find someone who will trade carpet (or whatever) for our media time or space.”

The sales team is not too excited about doing this. However, out they go. They waste a lot of time calling on prospects that are not interested, although they may sooner or later find a trade partner.

If the media was a member of the barter exchange family, the manager could pick up the phone and place an order for the carpet. Not to mention the fact that he is using barter dollars built up in a “barter bank account” from unsold time.

Remember to emphasize these three facts when approaching a media company: selling—add a pro to your sales force; record keeping—don’t strain relationships with accounting; procurement—pick up the phone and place your order.

Yes, a small trade exchange can offer the big media company a valuable service!

Exchange Owners: Want More Mega-Traders In Your Exchange?? Then Resolve To Do Something Different!

You’ve worked extremely hard. Most likely you’ve put everything you had on the line to start your exchange...you’re to be congratulated for your persistence and tenacity. Getting a critical mass of clients together is tedious work, now it’s time to start reaping some of the reward for your efforts!

For twenty-five years I’ve heard it said by many within the trade exchange industry, “It’s only a matter of time before we get the recognition due us and the resulting rewards.”

But it requires more than time and talk. Success comes to those who go out and make things happen by providing extraordinary contributions in the form of fulfillment.

Equally important for maximum success, is to get your community to totally understand and embrace your services by creating a vision for greater trading! And that’s accomplished through constant communication and education within your marketplace as well as your client base...reinforcing both your value and the benefits derived from your services.

Want to know how well you’ve done in inspiring your client base? One way is to take this simple test: Determine the percentage of mega-traders within your trade exchange...clients making sales of $100,000 or more a year.

If you’re not satisfied with what you find, then isn’t it time to resolve to try a new approach this year?

You can take the all-important first step by subscribing to a powerful and inexpensive marketing tool—one that’s ready for you to use right now. It’s called The Competitive Edge, and its use will enable you to be the very best communicator in your market!

It is a 4-page, professionally written and designed, monthly newsletter ready to use...no effort is required whatsoever on your part. And the cost is the same today as 18 years ago when it was first introduced!

Make the decision to use The Competitive Edge today, and we’ll rush you the current issue with an apropos cover story for your clients, titled “Could You Become A Mega Trader? Absolutely!”

For more information call Bob Meyer, publisher of The Competitive Edge newsletter, at (949) 831-0607 or e-mail him at bmeyer@barternews.com.

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

Here & There...

• International Monetary Systems (OTCBB:INLM) reported that its holiday expos transacted more than $1.4 million in trades. Don Mardak, CEO, said the 2004 seasonal shows had the largest number of exhibitors and attendees in the company’s history. “The record-setting transactions were the result of the high client turnout and the exceptional effort put forth by the members of our staff,” he noted.

• Bentley Commerce (OTCBB:BLYC) is launching its first South American trade exchange (http://bnc.vbarter.com) through a joint venture with Bolsa Nacional De Canje in Columbia. It will be joining Bentley’s network of barter exchanges already in the United States, Canada, Malaysia, Thailand, and Turkey. Discussions are underway for additional exchanges in Dubai, UAE, South Africa, Singapore, and China. For more information: www.bentleycommerce.com.

• Next time you’re feeling down in the dumps and a little sorry for yourself you might consider this fact:

  The number of workers earning less than $2 a day and living in abject poverty has reached 1.4 billion people, according to the International Labour Organisation.

• 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!

• It’s happening everywhere...even in Japan where despite strong economic expansion, salaries are falling as part-time labor staffing grows. Since 1997, when just 15% of the workforce was part time, use of non-regular staff has nearly doubled to 30%. The dramatic shift from a principally full-time workforce to more part-time labor helps explain why companies have been able to keep a lid on wage bills.

• Crude oil prices are bouncing around between $42 and $50 a barrel, some 70% higher than a year ago. But they would have to surpass $90 per barrel, adjusted for inflation, to match prices set in 1980. (The world’s daily consumption of oil is now 82.4 million barrels.)