[MUSIC]

Marcello: First of all, I want to ask you to just clarify how this works because so far I understand I can get into a barter exchange program or association group. There are no costs and like you instructed in the program, contact one of the companies and offer to buy their trade dollars--10-cents or whatever I can negotiate on a dollar and I have a credit with them. And then I _____ another company, either within the organization or outside, to buy that product of theirs.

Michael: There’s a couple different ways you can go about it. Like I said in the course, I’m a member right now of two different trade organizations. It was three. You know how I talked about the two big ones, ITEX and BXI.

Marcello: Yes.

Michael: ITEX and BXI, about two months ago, the one bought out the other. It used to be two competing trade organizations. They were the largest in the United States. One was called Business Exchange and the other one is called ITEX.

Marcello: I noticed that. I looked up on the site and the two…they’re together now.

Michael: They’re now together, so ITEX bought all of BXI. So, now you have one trade exchange, the largest in the US. It’s called ITEX now. They own all the BIX now. So, it’s all one. That just happened. That’s even better because it gives you all the trade organizations under one roof. Now, if you notice, if you go to ITEX.com--did you go to ITEX.com?

Marcello: Yes.

Michael: Did you search around and look at all the different things available for sale?

Marcello: Yes. I saw too many. I looked around and browsed just a little bit.

Michael There’s thousands and thousands. Did you see all the different things? And they let you search. You can even get the customer’s names right there from the site.

Marcello: I noticed that. That was pretty interesting.

Michael: Can you believe that? I didn’t even realize it when I put the course together, but I was just playing around there and you’ve got the entire database with the contact information without even being a member.

Marcello: So, basically without even going to join to get the book for all the…

Michael: Yes, it’s all right there online.

Marcello: Just get it online, now.

Michael: Yes, you don’t even have to join.

Marcello: I just noticed that accidentally when I looked on there.

Michael: Now, I don’t know how long that’s going to last. I don’t know if they realize that that’s a mistake or what. I guess it’s a double-edged sword. What I’m teaching there’s no one else teaching this. So, first of all, there aren’t that many people doing this, number one. And they want to do it because they want to get people to join their trade exchange and they want their people to see all of the different available products and services that are available through this group. They’re whole idea is signing people up and having them pay the up front fee and become a member. It’s in their benefit to do that. So, I don’t think that’s going to change, but what you can do now, like I said in the course, the people who are sitting all the trade dollars are the services like publishing companies, companies who sell advertising. So, if you go to IITEX.com and search advertising and you look at all the different listings who sell classified ads or TV ads or the VAL PAK. Do you know what the VAL PAK is?

Marcello: VAL PAK, no.

Michael: VAL PAK, you get them in your mail. Do you live in a home?

Marcello: Oh yes, like a little packet of business…they’re almost like cards.

Michael: Yes, there’s VAL PAK members who are members of trade because they’re selling advertising. So, these guys…a lot of them are loaded up because they’re a member of ITEX, they’re loaded up on all kinds of trade dollars. And because they’re lazy, they don’t know what to spend it on, so you could approach them. You have their email addresses and their phone numbers. You may want to just call and say my name’s Marcello. I saw you on the ITEX site and are you guys still with ITEX and then you want to find out are you guys sitting on any trade dollars you may be willing to sell for cash. You heard my calls, right.

Marcello: Right.

Michael: It wasn’t brain surgery. So, let’s say you find someone who says yes. Marcello, yes, I’ve got a bunch of trade. I would be willing to sell it to you for 15-cents on the dollar or 20-cents on the dollar or 25-cents on the dollar. And then you say, okay, great. You don’t have to commit right there that second. What’s the most important thing? The most important thing is locating a guy willing to sell you the trade dollars.

Marcello: Yes.

Michael: So, now you know you’ve got a guy who’s willing to sell to you and he’s agreed and everything sounds good. Now, you go shopping. Go search on ITEX for the things you want. Do you have a business right now?

Marcello: Yes.

Michael: What’s your business?

Marcello: I market _____ programs, for example, health programs; the things that you see in _____ advertised on TV and also videos, how to protect yourself videos. I make it online and through TV infomercials. I have a little stock I want to get rid of.

Michael: Do you have a website?

Marcello: Yes, it’s called www.howtoprotectyourselfvideos.com  .

Michael: Are you selling that stuff through TV?

Marcello: No, not this product. I had another product I was about eight and a half years ago called Dr. Morters’s Dynamic Health and snoring, which was hot about a couple of years ago.

Michael: So, you were selling this stuff through direct response?

Marcello: Yes, direct response. That Morter program was on TV. I bought advertising through media that way and the snoring product was radio direct response.

Michael: How many of those things did you sell, the snoring? Is that to stop snoring?

Marcello: Yes. It was hot, but now it’s available retail so the timing’s off already to do that.

Michael: So, were you selling that stuff through radio?

Marcello: Yes, radio. I’d call and negotiate.

Michael: And how did that go? How many were you selling of that stuff?

Marcello: I forgot how many years. It was a couple hundred.

Michael: Just a couple hundred?

Marcello: Yes, I didn’t do it on mass scale because it was just me and I had one assistant.

Michael: How many stations did it take to move a couple hundred?

Marcello: Less than ten.

Michael: Ten stations and how often were they running the spots?

Marcello: They were running just whenever they had available time and randomly throughout the day.

Michael: And you split it with them or something?

Marcello: Yes, only based on sales, I gave them a percentage of the sales.

Michael: And what else were selling? What was the thing you were selling through TV?

Marcello: Before that product, I was doing the Dr. Morter’s Dynamic Health, which was airing about five years ago--Dr. Morter being interviewed by _____ on TV. So, I had a couple of infomercials on that. And I did well with that. I did several thousands of dollars just in one day just on product, but my downfall was the organization. I had to do the accounting, all that myself. My thing…I was good at getting it aired. I wanted to go talk to the station and get it on the air. But with sales coming, I had to be there for the phone calls and I took care of that, too. The shipping, the fulfillment. So, a lot of time consuming with a full time job, too.

Michael: Very interesting. So, all those things, I guarantee there’s fulfillment on trade, there is radio time on trade, there’s probably TV in some markets on trade. Now, on that ITEX thing what you’ve got to understand is there are more things available. When you’re talking media and stuff, that’s when you want to get in touch with a good brokers. You don’t have to do that at first, but there are some benefits by becoming a member. If you can get into an ITEX office or an old BIX office without any up front costs or very little cost, having the availability to a broker is a good idea. But you could also contact some brokers outside of being a member, too.

Marcello: To do trades, right. To get their service.

Michael: Well, the brokers have big listings. Brokers are in the business to know what’s available. There’s large media trade deals done all the time at the corporate level that you’re not going to see on that ITEX exchange.

Marcello: Okay.

Michael: The whole idea is once you locate your person who’s willing to sell you the trade dollars you just go shopping for whatever you want.

Marcello: Without paying them yet money?

Michael: Yes. You go shopping first and confirm that the person you’re buying from has the product you want and make sure you’re getting it at the price they’re advertising and they don’t jack it up on you. You confirm that they’re a willing seller. Then you’ve got your willing buyer. Then you ask your buyer just to pay for the product in your behalf and just deposit it into the sellers account and you just tell the selling I’ve got a friend who owes me some money and I’m going to have them just deposit it into your account. It’ll be coming from this account number. They don’t care. They don’t care where it’s coming from.

Marcello: Do you mean the seller of the trade dollars?

Michael: The seller of the product. Let’s say you’re buying media time. You found your buyers. He’s got $10,000 trade dollars. You want to buy $10,000 in media. He’s says I’ll sell it to you at 20-cents on the dollar. So, you’re going to pay him $2,000 cash and you’re going to have him pay the ITEX dollars to the seller of the media. He’s going to be the buyer in your behalf.

Marcello: So, the media person I found, they’re willing to sell their trade dollars…

Michael: The media person is already a member of the exchange.

Marcello: Yes.

Michael: And the seller that you found the trade dollars is a member of the exchange. So, they’re going to do the deal, but the product is going to go to you in your name.

Marcello: Which one is the example you’re talking about that I’m getting the trade dollars and the customer I found to buy the product?

Michael: I’ll start over. Let’s say you found a guy willing to sell trade dollars.

Marcello: Yes.

Michael: Let’s say he was a guy who sold display advertising in the newspaper and he says okay Marcello, I’ll sell you $10,000 worth of my trade dollars for $2,000 cash. So, then you go look for something you want to buy for your business to help grow your business. So, you find a guy who’s selling radio spots and you want to sell your snore excess. So, you negotiate with the radio spot and you say I’d like to buy X amount of time on your radio and then he says okay and he gives you a price and you confirm that it’s a trade price. Then you go back to your advertising guy and say I’m going to send you $2,000 for your $10,000 in trade. I want you to deposit the $10,000 in trade directly into this account and you give him the account number of the radio guy.

Marcello: I see.

Michael: You see?

Marcello: Yes.

Michael: Now, I want to say something that’s real important because there was something people misunderstood and it has to do with the taxes. It’s not a tax loophole. Now, when this transactions occurs, some people could think that well I’m not even on the books and because I was out of the deal, I kind of brokered the deal, I don’t have to claim. But you do have to claim. See, what you just did is according to the government because you have to file, that was a barter deal. Since you bought $10,000 in trade for $2,000, you just earned $8,000. Do you see what I’m saying as far as your taxes?

Marcello: Okay.

Michael: But, if you use that radio time within a year, you’ve already written it off. You’ve expensed it out. So, just so you know. I wanted to bring that point up.

Marcello: So, this example, like if I found a radio company that I want to buy advertising in, where did the $2,000 come from to pay the first…

Michael: You found a radio company who wants to sell you spots. He’s a member of the ITEX. Now, remember the guy who you found the trade dollars who has $10,000 trade dollars, he’s a member of ITEX, too. And he wants to get rid of his trade dollars. You’re going to pay him $2,000 in cash for his $10,000 trade dollars.

Marcello: Okay.

Michael: Are you with me?

Marcello: So, I pay the $2,000 first and get the $10,000.

Michael: Yes, you’re buying his trade dollars at a discount. You’ve bought his $10,000 of trade for 20-cents on the dollar.

Marcello: Right.

Michael: I want to make sure you totally understand this.

Marcello: This part, yes.

Michael: This is the whole thing. So, you just bought $10,000 at 20-cents on the dollar. Now, when you go buy that radio time, you’ve bought the radio at 20-cents on the dollar. Do you see?

Marcello: So, the $10,000 in trade dollars goes where?

Michael: It goes directly to your radio guy because you’ve already agreed to buy $10,000 in radio spots from the radio guy.

Marcello: Okay, I’ve got it. I kind of wasn’t clear, but yes, okay, I’ve got it.

Michael: So, let me give you an example. Let’s say before you even found the trade dollars let’s say you went to your radio guy. He’s selling radio spots. They’re $100 trade per spot. That’s what he charges to anyone else in the ITEX organization. Well, when you go buy that $10,000 in trade, you’re going to get 100 spots; 100 X 100 is $10,000.

Marcello: Yes.

Michael: But you’re getting it 20-cents on the dollar. So, your $100 spot that used to be $100 on ITEX is only $20.00.

Marcello: Yes, I get it.

Michael: Are you with me?

Marcello: When I tell the radio station this example, where it comes from, I just tell them to contact this other company where I have credit.

Michael: No, you’re going to handle everything. Let’s say you agree to purchase the trade. You made a deal and say okay, send me a purchase order. Send me an agreement that you’ll sell me X amount of spots for X amount of dollars. Fax it to me. So, once he faxes that to you and you have a written agreement, then you just take care of the details, you take care of the payment. You call the advertising guy who’s going to sell you the $10,000 in trade and you do a purchase with him. I’m buying your $10,000 in trade for $2,000 cash. I’m going to pay you the $2,000 in cash. You’re going to deposit the $10,000 in trade into this IDEX account. Now, you’re going to get the ITEX account from the radio guy. You just say what’s your ITEX account number.

Marcello: Who’s using the account number I ask for, for the first--the second party I’m going to…

Michael: It’s just like a bank account. You need his ITEX account number. It all works like a credit card. It works through the phone.

Marcello: You don’t need to know what the account number, the name…

Michael: No, they don’t care. You just say deposit it into this account.

Marcello: Okay.

Michael: And then you confirm with your radio guy because he can go online and confirm that the payment’s been made.

Marcello: They do these payment on the trade online?

Michael: What will happen is the advertising guy will fax a trade draft, it’s like a check, to his broker and the broker does it or you can just have the advertising guy fax his trade draft, which is a copy of the check written out for $10,000. They don’t even have to say what it’s for. And then the radio guy, he gets it into his account by doing an authorization through his keypad on the phone. Just like if you ran a credit card through with a keypad, it’s all set up through the phone.

Marcello: It’s called trade draft.

Michael: Yes, it’s called a trade draft, that’s right. See, when you sign up as a member of ITEX, you get a checkbook and it has your account number just like a regular checkbook. And you can write checks for things you want to buy and you fax them.

Marcello: Can I ask you a question, another thing before we through is that’s an example of how if I want to get something for myself at a discount. But how do I do it if I want to earn extra money on the side. This was my main reason.

Michael: Well, if you want to earn extra money on the side, whatever you can buy at a discount, you can resell at a discount.

Marcello: And they don’t have to be trade members.

Michael: No, it could be to anyone. If there’s a member selling radio spots to trade members, he would be willing to sell it to cash members, too, wouldn’t he.

Marcello: Yes.

Michael: Any member of the trade exchange is also selling to the general public, as well. They’re only a member of the trade exchange to enhance their business. It doesn’t mean that’s their only business. They’re selling to the public just as any other business.

Marcello: So, if I find that example of this advertising agency that has these trade dollars and want to sell me $10,000 for $2,000…

Michael: You could go to a cash buyer. You could find someone who’s advertising with that station or find someone who is looking for potential advertising and say how would you like advertising at 50% off the normal rate card.

Marcello: Now, the easiest way to find out is like through the other members there or besides going door to door. I don’t want to go door-to-door.

Michael: How to find your buyers?

Marcello: Yes.

Michael: You have thousands of different products and services. If you were selling radio advertising, I would find out a little information on the radio company and I’d find out who some of their customers are. Let’s say you found a local pizza restaurant in that market. I would maybe call their competitor and say you’re competitor Domino’s is advertising on WKBC and they’re also spending full price on their advertising. How would you like to compete with them on the same radio station within the same market, but pay only half the amount of money for advertising?

Marcello: Yes.

Michael: And then you go sell them the advertising. That’s one idea. I mean radio stations have all kinds of clients advertising. Just go to their competition and say how would you like to compete on radio with your number one competitor and be able to out advertise them for the same cost.

Marcello: So, then in this example, let’s say I would go into a place that wants to do that. Have them pay cash directly to the person I secure…

Michael: No, let’s say you have the guy sitting there with the $10,000 in trade. And you know he’s willing to sell it. No one else is going to come to him, I assure you. You go sell your advertising and get paid for it before you buy it from him.

Marcello: Okay.

Michael: So, let’s say you approach me and I’m that other pizza guy and I say yes I’ll take advertising at 50% off.

Marcello: Cut me a check for that amount.

Michael: Yes, you get paid first. Then you go to him and do the deal.

Marcello: Okay.

Michael: Does that make sense?

Marcello: Yes, that does.

Michael: This is not hard. It’s a pretty unique concept and it’s very powerful.

Marcello: Now, as far as unloading some of my inventory, the product I do have, these videos, I could just be a member and pretty much you say I can get easily someone to buy my product once I’m a member.

Michael: Yes, you probably could. I don’t know for sure. I don’t know what your product is and all the benefits of it, but there’s a good chance you’d have an easier time of selling it on trade. That’s very possible. You may want to search on ITEX health products and maybe just call some of these people direct and say I know you’re a member of the trade exchange, I’m not, but I’m sitting on a bunch of trade dollars. You may be able to get them to buy those things for you and just have them maintain a credit of trade dollars without you even signing up for the organization. Or just say, look, if I sell you 10 cases of this Snorex, will you buy me something on ITEX under your account.

Marcello: Oh, I see.

Michael: So, you could do that, too, without signing.

Marcello: Use their account to buy something I want.

Michael: Yes, you just make a deal with them. Say, I’m going to send you this Snorex, you’re going to give me a credit of trade dollars and buy me some stuff that I want. Is that fair?

Marcello: Right. Yes, that’s good. The video I’m selling is how to protect yourself videos for normally $40, so I could increase it a little bit more, you’re saying…

Michael: A lot of people do inflate stuff. It’s frowned upon, but it’s a reality that it happens. So, it’s up to you. You can do it.

Marcello: I was just thinking maybe to raise it to $50 rather than $40.

Michael: Yes, try it. How many of those videos do you have?

Marcello: One hundred.

Michael: I don’t want you to become disillusioned because there are a lot of people on trade who inflate stuff where you’re going to see stuff really jacked up, but don’t let that discourage you because they are a lot of people who do that. But there’s still a large amount who don’t inflate items. So, only focus on the items that aren’t inflated.

Marcello: Things I want to buy myself, right.

Michael: Yes, things you want to buy yourself. You can tell what’s inflated and what’s not.

Marcello: Yes, I think I can get an idea.

Michael: But I’m talking about legal services. Legal services are rarely inflated. Things you’re going to find inflated are hard products.

Marcello: I just remembered. You mentioned you said you incorporated through trade, is that right.

Michael: That’s right.

Marcello: I’d like to do that myself. I haven’t yet and now I’d like to do that.

Michael: When I did that, my accountant, who’s a member of Intagio, you’ll hear the interview, he got everything set up for me for my corporation.

Marcello: I mentioned the listing and that’s one of the things I looked at on ITEX like incorporating service.

Michael: Did you find anything?

Marcello: No, I didn’t.

Michael: I’ve got your email. I’ll email you my accountant’s number. Now, he’s a member of Intagio, which is a different trade organization.

Marcello: Okay.

Michael: But see if you can find an attorney to help you do that. That’s possible. I can send you my guy’s name, but he’s a member of Intagio.

Marcello: He’s willing to accept a trade?

Michael: Yes, he accepts trade.

Marcello: Okay.

Michael: But Intagio is a different organization, I-n-t-a-g-i-o. They’re another trade organization.

Marcello: Would that be available for the members to list to buy trade off, too?

Michael: Yes. I’ve done deals on Intagio, as well. That’s right. Now, I’m a member of them, but I’ve been a member for a long time.

Marcello: Would I have to be a member to go in there?

Michael: Yes, on that one, unfortunately, they don’t have the database open to everybody.

Marcello: Okay.

Michael: Go in there and check it out. Go see what you can find.

Marcello: Yes, I will. Could you send me that, by the way, for backup in case I don’t find any?

Michael: Yes. Intagio, I-n-t-a-g-i-o. Yes, I’ll send you that.

Marcello: Thanks. I might use that especially if you’ve worked with them before.

Michael: Yes, I can send you his name. Sure.

Marcello: Thank you.

Michael: Okay.

Marcello: Yes, I appreciate the information and stuff.

Michael: Call me back if you have any other questions and I’ll walk you through it. Enjoy and good luck with it. Call me if you need anything.

Marcello: Okay, thanks.

Michael: Bye.

Marcello: Take care. Bye.

Michael: That’s the end of this consult with Marcello on the Secret Loophole. I hope this has been helpful. By all means, please contact me if you have any specific questions that we haven’t covered in this short session. Thank you.