Barter News Magazine

July 1999

Reprinted with permission from Barter News Magazine - July 1999

Reserved, introspective, a creative right-brain thinker, 48-year-old Bruce Kamm is an anomaly in the barter business. Seven years ago he launched, and has subsequently managed, the most successful Itex office in the company’s history. For six successive years his New York City operation has had the highest trade volume of any Itex office in the nation.

He did so by creating an interactive web site, and working with other brokers—leading the company in out-of-area sales. “Clients from other brokerages visiting New York,” he related, “were treated as our own.”

Wanting to be the best, Kamm built trade volume by realizing that 50% of a lot was better than 100% of a little. “I’ve always believed in sharing the wealth, along with knowledge, by helping and teaching other new brokers how to trade.”

Taking his considerable barter experience, while embracing his business philosophies coupled with a unique computer savviness and his out-of-the-box thinking, enabled Kamm to devise a revolutionary new system called TradeBanc. It promises to quickly move the commercial barter industry in a direction that heretofore has been only dreamed of.

Although the barter marketplace is notorious for its fragmentation, all that will change under TradeBanc’s messaging capability, which allows prospective buyers and sellers to barter anonymously in a real-time environment.

Those who choose to, can participate. It is open to virtually everyone—trade exchanges, corporate barter companies, members of trade exchanges, clients of corporate barter companies—even the consumer. Which includes the millions of people who neither own a business, nor have ever heard of barter.

It’s a paradigm shift which will operate by establishing strategic relationships and alliances within the industry. When adopted, it will revolutionize the way barter is conducted—here in the U.S., as well as globally. In the process the commercial barter industry will undergo and experience a needed cooperativeness. Enriching everyone in the system, and ultimately becoming a dominate force in world commerce.

TradeBanc’s purpose is to assist businesses in effectively and profitably using their unutilized capacity—inventories of hard goods, or time for services—by exchanging them for the day-to-day business expense items, which they are now purchasing with cash.


It was an absolutely gorgeous spring day in Manhattan, Friday May 22nd, when I walked the six blocks from my hotel over to the office of InterTrade Technologies, a business-to-business internet electronic commerce company founded by Bruce Kamm just nine months ago.

As Kamm gave me a tour of his offices, which ironically were next door to his previous Itex headquarters, I heard about his timely purchase and subsequent hectic and exhausting five-week total renovation. Much of it personally done by Kamm, one of whose hobbies is building and construction. 

Running up and down numerous flights of stairs, while working from sun-up to sundown to meet a deadline (of vacating his Itex office at lease end) he had dropped almost 30 pounds. It was hardly a diet that would be a big seller these days!

Kamm had arranged our meeting to include his team of valuable contributors who are assisting in the creation of the company. Their goal is to build and manage a new and unique global-trade clearinghouse.

It was 9:30 a.m. when all appeared at Kamm’s six-story brownstone offices on East 37th Street. Together each individual would provide me with their views about the exciting program they’d been working on, known as TradeBanc.

They all agreed that this new online market-maker for the barter industry would be a neutral intermediary, bringing together the many fragmented, multiple groups scattered around the globe. Enthusiastically, they pointed out how the clearinghouse would transform and redefine the commercial barter industry, using InterTrade’s proprietary software services over the internet. This revolutionary new software would allow goods and services, from virtually everywhere, to be found in one place. (Who wouldn’t get excited over this prospect?)

I heard, too, about the profitability of cooperation, as the affiliates (trade exchanges and corporate barter companies) would maintain total control all the while—thus earning much more in service fees. Barter companies would continue to process all of the transactions of their members and clients, who could now trade efficiently anywhere in the world—through TradeBanc.

What was most thrilling to hear was the enormous expansiveness TradeBanc offered. Now, for the first time ever, in the 40-year history of the barter industry, a member of a trade exchange or client of a corporate barter company, would have access to a vast amount of products and services. Conceivably, every trade exchange and corporate barter company’s inventories—if they were an affiliate of TradeBanc.

Could this be the start of barter nirvana? Doesn’t everyone in the barter industry realize that the greater the choices, the more trading will occur? And thus, the greater the value of the network for everyone involved.

TradeBanc promises the aggregation of all goods and services from all the participating affiliates into a single database. One that can be easily searched by category or item.

Amazingly, I realized that we’re now at the point where one click of the mouse would display all the items in a category...and another click would bring up specific catalogs to peruse.

And, as a barter buyer, once I placed my selected items into a shopping basket several things would happen: the seller(s) would be notified, my local trade exchange barter account would be debited (once the exchange OK’d the sale), and the product would then be shipped. Virtually a friction free transaction.

As we took our seats around the long, oval conference table on the third floor of Kamm’s offices, I looked forward to learning as much as I could about this operation. I wasn’t disappointed, it was a very stimulating and exhilarating day.

With an ample supply of drinking water on hand, we got down to business. Adjusting the volume on my tape recorder, I looked around the table. To my direct left was Robert Lewis, a cerebral type and the operations manager for InterTrade Technologies. He joined us for the first three hours, as did Paul Levinson, a CPA, who was to my right. Levinson is an Itex client and an avid internet user. Kamm had invited him for his input regarding online trading.

Next to Lewis was the unflappable Bruce Kamm, the president of InterTrade Technologies and founder of TradeBanc.

Investment banker and Managing Director of E-Technologies Associates, Eleanor Haas, was next at the table. Perceptive, articulate and detail-oriented, she took copious notes.

Larry Sashin, the loquacious General Manager of the Itex-New York office, was seated next to Levinson. Periodically, he’d excuse himself to check on the staff and daily operations. Later, after lunch, venture capitalist Alexander von Furstenberg stopped by to share his views on TradeBanc.

To begin the session I asked Paul Levinson about the new online trading system...

Levinson: I’m not up to speed on the specifics of the new effort, but I really enjoy using Itex’s web site for trading. I love to shop online, looking for great deals. It doesn’t take much time, it breaks up my routine, and it’s very relaxing. Recently I purchased $9,000 of office furniture from Itex online.

Kamm: That’s exactly the object of TradeBanc—saving traders time by bringing buyers and sellers together. There’s a corporate barter company that did a trade for skis about two years ago. They tried moving them through their normal channels—independent ski stores, some discounters. But they had such a large quantity they couldn’t move them all, unless they “gave them away” to the big liquidators. And they hesitated to do that. 

It’s now two years later and they’re still holding a good part of that inventory. By using TradeBanc they’ll be able to put a picture of the ski’s online, along with a description and prices, and sell them to a variety of buyers. And do it at close to retail.

Levinson: I can’t even begin to imagine how much will be available if the entire industry participates! I know I’ll certainly be working harder to earn more trade because of the incredible buying opportunities that will open up. 

Whenever I have staff members with not enough work, I’ll immediately send them out to get additional barter business. Feasibly, I think we could even see a lowering of barter prices, as companies compete to earn trade dollars to purchase from this enormous array of inventory.

Lewis: From an “Economics 101” standpoint, even if the prices did drop a bit, as you increase the supply and the demand, and the sales turnover quicker, the income to a selling member will still grow due to the number of units being sold. Consequently, they’ll have more money at the end of the day.

Kamm: Our observation on what the industry needs is substantially different than other barter companies. Many of them are coming online, but only offering their clients an opportunity to buy over the internet from within their organization.

Haas: Really, when you think about it, there’s no reason why any barter company shouldn’t participate in TradeBanc. But admittedly, Bruce’s vision is a “metavision,” in that he sees TradeBanc realigning the barter marketplace. 

By serving as a single point of contact between buyer and seller this system will greatly improve the efficiency and effectiveness of trading. That’s why we believe this company will become the market maker for the online barter industry.

Lewis: We certainly expect to be the first with this market making service. And that’s a big edge because there’s the law of increasing returns which says the value of a network is equal to the square of the number of users.

Haas: Exactly. The more people within the TradeBanc network the more valuable it becomes for everybody, and the more inviting it is to become a part of it! By getting out there first, TradeBanc is going to have a serious competitive advantage.

Meyer: That’s assuming the industry sees the inherent value of TradeBanc and comes aboard.

Lewis: Basically, every product and service has a channel of distribution. Barter has its channels through the trade exchanges and corporate barter companies. But up to now nearly everybody in the industry has operated individually, on their own.

This program allows them to operate as they always have, in their own best interest. And yet it enables their clients to reduce their “buying friction” in a very significant way-via the internet - which we believe will increase the trading activity and volume enormously.

Haas: What we’re not doing is trying to create another association. Every barter company will continue to have their own front end, operating as they do now. This program will be a valuable adjunct-it offers them an additional profit center.

Meyer: Suppose I own a trade exchange with 500 members. How would I interact with TradeBanc? How would I profit?

Kamm: All we’d need from you is some very basic account information on a client, so they could then go online. When you choose to activate them they can then trade with the other existing accounts (trading partners)in the TradeBanc system.

We’re not asking your members to join anything. They will not pay any membership fee, monthly fee, or transaction fee to us. And every time they trade, whether buying or selling from this huge new array of products and services, the transaction service fee is totally - 100% - yours.

Meyer: So you’re not interested in a transaction history, or even what a trading partner has to trade. Why not?

Kamm: Because we’re just the facilitator, it doesn’t matter to us. The clients themselves will go online and look around at what’s available, and they’ll place what they have to sell online. They’ll administer all of this themselves.

Meyer: So, as a trade exchange owner, there’s very little extra work involved, only additional commissions on the trades?

Kamm: Our model is designed so the seller can go online and list all items for sale, either in an auction, or in electronic commerce with a shopping basket. 

Let’s say our fictitious seller has bicycles to list.

Meyer: O.K.

Kamm: When a buyer comes online searching for bicycles, our model brings up all the bicycles that are available within the system.

But the buyer doesn’t find out the name or address of the sellers. Everything is done anonymously. So the buyer picks out the desired bicycle and puts it in the shopping basket. The transaction is completed between the buyer and seller by using their existing, respective trade exchange’s trade dollars.

Meyer: In other words, under your model, both buyer and seller will simply continue to buy and sell as if the bicycle were located within their local exchange?

Kamm: Exactly. The existing clients’ relationships are never threatened. And the purchase, or sale, will appear on their next month’s statement—just as it does today.

Let’s say, the buyer is a member of Chicago Barter and buys a bicycle from The Exchange in Orlando, we’d see the member’s purchase on his Chicago Barter statement, payable in Chicago Barter’s trade dollars, along with the usual cash service fees.

On the seller’s side, we’d see a sale was made through The Exchange, and he was paid (account credited) in Exchange trade dollars. (And if The Exchange collects a commission on the sale side of the transaction, then the appropriate service fees would be there as well.)

Meyer: Then the exchanges themselves have no real involvement in this trade, except to collect service fees?

Kamm: We’re not creating any extra work for the exchanges. As I’ve explained, they don’t even have to input any of the listings online, because the clients themselves will do this.

Meyer: Will clients take the time to do this?

Sashin: Our clients have been doing this here in New York for two years. We’ve found it’s the really active traders—around 5 to 10% of the exchange’s members—who will do it.

Kamm: Interest grows in an online service with the expansion of trading availabilities. Initially, you’ll find traders going online to see what’s available. They’re not so quick to list items for sale until they need trade dollars to buy.

But this is a whole new universe and the availabilities of products and services that they can buy—never available to them before in such numbers—will drive them to list their products so they can make sales. The income from these sales is which are then used for the desired purchases.

Meyer: As a market maker, TradeBanc is a facilitator or clearinghouse rather than a third party record-keeper. So all of these trades are essentially recorded through trade exchanges or corporate barter companies. What mechanism is used by TradeBanc to facilitate and interact with the exchanges and corporate barter companies?

Kamm: Initially we plan on using IRTA’s Universal Currency. So our clients, which we refer to as our affiliates, are the trade exchanges and corporate barter companies.

And while their clients, which we refer to as trading partners, are trading seamlessly through the TradeBanc system, it will be the trade exchanges and corporate barter companies’ job to have sufficient Universal Currency (UC) available for trading.

Meyer: Walk me through this one time.

Kamm: Let’s go back to Chicago Barter as an example. We’ll say they have a $50,000 credit line with IRTA’s Universal Currency. Every day Chicago Barter would be able to monitor how much of their UC credit line is being spent “seamlessly” by their members.

Remember only those Chicago Barter members who have been registered (by Chicago Barter) can actually make purchases. So the trade exchange itself is in complete control, all the time. Initially, we expect only 200 or so members of an exchange (probably their best clients) to be given the privilege of trading online.

Getting back to our example, let’s say that after three days only $10,000 of the $50,000 is left. Then Chicago Barter, and/or its clients, must go online and sell goods into the system. Every sale made goes back into their “credit available,” which, in turn, supports the additional purchases clients will be making. It’s a dynamic and on-going circle, not unlike a trade exchange.

Meyer: Therefore, as a client of a trade exchange buying through TradeBanc, my buying power basically revolves around two conditions. First, the amount of trade dollars I have in my account. But in addition, I’m relying on my trade exchange having sufficient UC credit which supports (or allows) my purchases to clear through TradeBanc?

Kamm: That’s right.

Meyer: And what happens if I have sufficient trade dollars in my account and I go to make my “seamless buy” through the TradeBanc network and the purchase doesn’t go through? I can’t get a clearance, because my trade exchange doesn’t have enough Universal Currency.

Kamm: You’ll probably be upset—and make a call to your exchange! But in reality, until additional sales are made by the trade exchange itself or any of the exchange’s clients (trading partners), additional purchases couldn’t be made.

Meyer: Doesn’t this retard, or slow down, trading?

Kamm: It’s really no different than when you as a client have used up your credit line, and wish to make another purchase through your local exchange. What do you do? You quickly call the exchange and tell them to get you more business, help you achieve more sales. You send out faxes about what you have to sell, you ask to be included in the monthly brochure mailings, etc.

Let me add that for our customers (the trade exchanges and corporate barter companies) we’re talking with insurance companies about insuring credit lines beyond those of what the Universal Currency offers. This insurance would also provide protection in case a trade exchange goes out of business, or in the event they didn’t pay off their credit line.

Meyer: Are there plans for other types of insurance?

Kamm: We’re going to insure the integrity of the data.

Meyer: What does that mean?

Kamm: This will insure that no trade exchange, or client of an exchange, can find out any information (data) about any trade exchange or client. We’re looking at $1 million policy. We want to eliminate any fears or concerns, by the trade exchange owners, that their client list is in jeopardy.

Meyer: How would an exchange owner know that your system is secure?

Lewis: Our system would be reviewed by an outside tech company. And they would provide a security certificate assuring and guaranteeing, to our insurance underwriter, that TradeBanc is a secured system. We’re also going to insure the spendibility of the trade credits, so our trading partners have confidence in the system.

Meyer: How does that work?

Kamm: There would be certain guidelines based on the clients best efforts to spend. For example, the client (trading partner) applies and fills out the questionnaire indicating they’re interested in real estate or travel, for instance, and that they will want to spend X amount of trade per year for this. (And they also state that they’re willing to sell X amount of their goods and services into the system annually.)

We will guarantee that there will be more than enough real estate or travel in our system—50 to 100 times as much as requested—for them to select from. If they then choose not to buy any of the inventory, that’s their decision—not ours.

Meyer: What will be the cost to a trade exchange or corporate barter company to interact with TradeBanc?

Kamm: We’re charging a minimal 1/2 of 1% cash and 1/2 of 1% trade on the sale, and the same on the buy side. And remember, all of the new business the exchanges and corporate barter companies’ clients do, through the TradeBanc system, is fully commissionable for them.

Meyer: What’s needed for TradeBanc to take off?

Kamm: We’re projecting 40 trade exchanges and up to 5 corporate barter companies by December 1999.

Meyer: Will Itex Corporate be a client?

Kamm: Not the corporate office itself. It’ll be up to each individual office whether or not to get involved, but we don’t wish to have more than 15% of the affiliates being Itex. We anticipate being extremely successful if we get half the industry. And as it grows I think most everyone will see the benefits, and eventually want to get involved.

I just don’t see each exchange, individually, spending hundreds of thousands of dollars to create something like this.

Haas: That’s why we think the considerable investment we’re making will enable us to be the portal for the barter world.

Meyer: When can trade exchanges sign on as affiliates?

Kamm: Right now. As an incentive we’ll be offering stock options to the earliest participants, and will have an affiliates board of directors.

Levinson: I would think the smaller exchanges would especially find this worthwhile, because these trading alliances would enable them to better serve their clients.

Sashin: Paul’s right. I know of several fast-moving small exchanges that are working very hard. TradeBanc can provide that little push that puts them over the top. It’s a great tool for them. By going online they’ll be able to use this tool to acquire all kinds of additional goods and services.

Kamm: I’ve had an internet site here at Itex for over two years now. We had companies from all over go online and sign on, but in many cases there wasn’t a local Itex office to serve them, even though Itex had offices scattered around the country. And this is the problem all of the other online barter systems are going to face.

I firmly believe for online barter to work you must have total, massive coverage—which means having affiliates all around the country. That’s what our model is based upon.

Meyer: Is there a way for a company to trade direct, one-to-one, with another company through the system?

Kamm: No. All trading activity must be done through an affiliate trade exchange or corporate barter company. We have absolutely no desire to be in competition with any barter company.

Meyer: With the online trading floor and an auction site, plus your trade finance—the online procurement system for corporate trade purchasing—it looks like you’ve covered all the bases.

Kamm: There’s one other thing. We’re also introducing a co-branded Visa credit card that will facilitate trades between members of different trade exchanges and clients of corporate barter companies.

We feel this effort along with our BancPoints program will push the huge consumer base into interacting with the barter industry in several subtle ways.

Meyer: Will there be any other information services available through TradeBanc?

Kamm: Yes. There will be a directory of products and services that will be available through participating companies. And an interactive data base, TradeFlash!, will help locate the latest trade availabilities.

Also provided will be online conferences and seminars, as well as updates and news affecting the barter industry through message boards, chat events, and newsletters for both affiliates and trading partners.

Meyer: Any last comment or thought to share with our readers?

Kamm: I’d just like everyone to look into what we have to offer - TradeBanc is a beautiful thing!

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