Renovation 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 He figured Radio Shack’s greatest asset was its 7,000 stores—even if some were outdated.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 stores.

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 service revenue.

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 This
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 borrowing.

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 discovered barter.

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 exchange?”

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