Highly Aggressive Credit Policies With Top Traders Key To Success
July 11th, 2007 · by Bob Meyer · 3 Comments This is the seventh in a series of interviews with Jack Schacht…To read the others see right-hand column “Categories” then “Jack Schacht.”
Questions; When you found the company hitting a rut and was stagnating, what did you do? What actions did you take?
2. Do feel mentoring is an underutilized resource in the business? 3. Would more formal mentoring programs be practical, or is this wishful thininking?
Bob:
As I mentioned before, it took over 5 years for Joan and I to start paying ourselves a decent income. I think we got out of our rut primarily through some very aggressive credit policies that, even to this day, seem to amaze my peers.
Not only did we get our radio stations in the hole by over a million dollars before we began selling their radio time but we also stepped out on a limb by putting some of our most aggressive buyers in the hole by over two million dollars.
Circle Fine Art alone owed us a million dollars in trade before we made any serious art sales. Their purchases, however, along with the other aggressive players in our exchange made a huge difference in our volume.
Our highly aggressive credit policies took our volume from a paltry $150,000 a month in our second year to over a million a month in our fifth year. Once we reached that level, I was encouraged to continue the same policy with our national accounts when we started that division a few more years down the road.
The other significant thing we did to get out of our rut was to essentially rip up the trade rules and regulations which, to this day, I believe only hamper an exchange’s volume. The market place, not our exchanges, should determine pricing. The one rule we did retain, of course, that members who wish to be promoted must always do full trade.
Mentoring is always useful. I had several help me get started in the business and I may not have made it without them. We still, however, all have to chart our own course and do it our own way in this business.
As far as formal mentoring programs go, I think that’s the job of NATE and IRTA, our industry’s trade associations—to provide the best counsel we can to our fellow members as we also accept good counsel from them. Over the years, NATE did some excellent work in providing good, practical education to its members.
Jack
This entry was posted on Wednesday, July 11th, 2007 at 1:18 am and is filed under Jack Schacht. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
July 19th, 2007 at 1:04 am
“The other significant thing we did to get out of our rut was to essentially rip up the trade rules and regulations which, to this day, I believe only hamper an exchange’s volume. The market place, not our exchanges, should determine pricing.”
—————–
Bob, that quote above troubles me. Many or most exchanges already deal with relative degrees of inflation. Schacht has said as much in your series, placing the blame on greedy operators.
When members are not restrained from charging (”gouging”?) higher than normal cash prices it exacerbates the situation and further reduces member confidence and satisfaction.
I will temper my opinion, above, by confessing that I am not an experienced exchange operator… BUT I am fairly well versed in using exchanges as a member and investor and promoter.
Our investors have invested over two million dollars in US barter exchanges, to date, including a million dollars in the failed Bartercard USA licensee.
By the way, when, if ever, are you going to report on the great failure of confidence that has befallen Bartercard International here in America when they refused to protect members of their US licensee when that licensee collapsed? Many traders and members, large and small, novice and experienced have apparently lost significant trade credits, in the millions I estimate.
Is this the industry bugaboo that no one wants to talk about?
IRTA isn’t talking about it, presumably because Bartercard is its biggest member. And , you aren’t talking about it… because they are your advertiser?
I would like to see you along with prominent adversely affected traders weigh in on the Bartercard America debacle. If Barter News is not the appropriate forum, then none exists.
Regards,
Lynnea Bylund
Presient/CEO
Catalyst House
www.catalysthouse.com
catalysthouse@cox.net
July 19th, 2007 at 5:36 am
Dear Lynnea,
As an investor with over $1 million in the Bartercard USA licensee (as well as being a member) you know as much as I do about the Bartercard USA failure…which appeared to me as mismanagement by the licensee.
You and other prominent affected traders have a forum here to voice your observations.
In my conversations with Bartercard International management I was told they have a desire to reopen in the U.S. They did not share with me their game plan or any specific date.
July 19th, 2007 at 7:37 pm
Yes, clearly the licensee was at fault…UNTIL the BK filing, but Bartercard International has been unwilling to stand good for the currency. They have essentially stated that “according to the license agreement, its not our problem, yada yada.”
To my knowledge, the US members only ever got one notice from International, indicating that things would be “back to normal within 90-days,” and that was 18-months ago!
Imagine my shock - long before my investors began to invest in the US licensee, I joined when the Aussies still owned and ran it. We were quite enthusiastic to join the new (Aussie-owned) outpost even though there were bigger, more populated competitor systems available.
Never then nor later was a Bartercard membership presented as anything less than the full backing and confidence of “Bartercard.”
And my premium-priced ($2500) corporate membership, sold to me by Aussie ian Jones, included a $T20,000 credit-line which we never tapped.
Needless to say, I became an insider, and received perks and T$ commissions/bonuses far in excess of a typical member, but I am aware of at least several hundred typical (non-insider) members, dentists and ad agencies and restaurants, the full standard array of members who bought the Bartercard membership in faith and trust and who feel they have been left high and dry without any meaningful action or communication.
And, I can attest that some of our investors were given sober verbal assurances by key executives of Bartercard International that “corporate” would absolutely stand behind the currency in the “unlikely event” of a licensee default.
Now, even I can’t get a return phone call or email and my communication has always been polite.
Perhaps we should start a new discussion here at the industry blog and other dissatisfied BC members, like West End Media, can weigh in on this.
Perhaps even IRTA’s president will weigh in.
Eventually BC might enter the discussion, and hopefully with more than just a smartly articulated lawyer letter.
What do you say, Bob? Lets restart the thread specifically on this subject.
Wayne Sharpe, are you out there?
Cheers mate! LB