Exchanged For Exclusivity & Advertising
Radio Shack, an electronics retailer with 7,000 locations, is getting
down to the basics and using barter for its surprising turnaround.
When they tapped the former chairman and chief executive at the
Shoney’s restaurant chain to be president of Radio Shack,
he led a new focus on retailing.
Leonard Roberts did what every smart business-owner does, he focused
on “using what he had to get what he wanted.” He figured
Radio Shack’s greatest asset was its 7,000 stores—even
if some were outdated.
With visionary insight Roberts decided he would refurbish the stores,
having suppliers pay for it in exchange for exclusivity within those
The three suppliers he worked with were Sprint, Compaq Computer,
and Northpoint Communications Group.
When Sprint Corporation was looking for a retail base from which
to sell its new wireless phone network, Radio Shack and Roberts
offered to make Sprint its exclusive national wireless provider
for ten years.
In exchange Sprint would provide tens of millions of dollars in
new store fixtures and advertising support, plus about 5% of the
revenue generated by their shared customers.
Radio Shack cut a similar distribution deal with Compaq Computer.
Compaq would refurbish a portion of Radio Shack stores, controlling
the look and merchandising of the space, and sharing some of its
Likewise, Radio Shack struck a deal with broadband internet service
provider Northpoint Communications Group in which the stores sell
high-speed web-access contracts.
Barter’s Role for Entrepreneur
Who Built Country
Club For The Rich
Timothy Blixseth, 54, the founder of Yellowstone Club in Big Sky
(MT), is the only private resort community in the U.S. with its
own ski mountain and world-class golf course. Mostly wilderness,
it’s a haven for the super rich who pay an initiation fee
of $250,000, and are required to purchase property of $1 million
to $10 million plus pay annual dues of $16,000.
The Yellowstone Club has 200 members, and exists because of two
barter deals that Blixseth executed in the 1990s, when he and his
timber business partner made a trade with federal officials. They
provided 164,000 acres adjacent to Yellowstone National Park in
exchange receiving 100,000 acres in the Bozeman/Big Sky area.
Of the 100,000 acres the partner took the timberland, leaving Blixseth
and his wife with a stretch of undeveloped land they originally
intended to turn into a family compound. After the newly built cabins
and chalets became wildly popular with their friends, they decided
to create a country club for millionaires looking for an alternative
to pricey, pretentious and over-crowded destinations such as Aspen.
Thus, the development of Yellowstone Club occupying 22 square miles.
With an eye toward natural beauty, only 20% of its acreage is slated
for development...with the rest remaining untouched.
When In Doubt Call Your Broker Like
Happy Entrepreneur Did
Recently we talked with a client of a trade exchange, who, admittedly,
is a staunch proponent of barter credit as a way to reduce his bank
He explained that at one time he was a veteran of the banking scene,
with lines of credit as high as $250,000. No longer. Now he’s
Asked to compare the borrowing from a bank to that of his trade
exchange, he smiled and replied, “There’s no comparison
between the two in my opinion.
“With the barter company, all they wanted was a current business
financial report and a commitment that we would provide $75,000
worth of our services to members of the barter network.
“To get that same $75,000 from a banker is an entirely different
story! I’d be spending considerably more time completing numerous
forms...not to mention the collateral that would be required.”
The client summed it up best: “Why would anyone want to go
through the aggravation of dealing with a bank, when the same thing
can be accomplished more easily and quickly through their trade
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