To Moreton Binn, Sultan of Swap, Cash Is Nice, but Barter Is Better
Barter is the world's oldest form of commercial exchange, long predating the invention of money. In modern economies, however, barter was a nickel-and-dime operation until about 30 years ago when the U.S. broadcasting industry found a new use for it. Radio and TV stations needed a lot of new, expensive equipment, but didn't have the cash to buy it themselves. Filling the vacuum, up sprang a number of cash-rich barter firms that would purchase whatever was required in return for airtime, of which the stations had plenty. The barterers then sold the time to companies that wanted it for plugging their products.
But it is Binn who is generally credited with transforming barter into a dizzyingly complex global game worth an estimated $300 billion a year to the U.S. economy. After earning a finance degree from New York University in 1958, Binn worked in advertising and ran a promotional services agency before buying Atwood Richards in 1974. By relieving corporate clients of huge quantities of unsold goods ranging from Lotus cars to hockey pucks to bat manure, and giving them other goods and services in return, Binn became known as the Baron of Barter. Sounds good, but where did he find a market for bat manure?
"Someone came to me about 10 years ago and said they had $2 million worth of extra guano that they wanted to trade," recalls Binn, 51. "It's supposed to be the finest fertilizer in the world. These workers in Jamaica would go into the bat caves at night and scrape the stuff off the walls. It must be a terrible job." In any case, Atwood Richards took the fertilizer in return for trucking services that it had bargained for elsewhere. Binn, in turn, sold the guano to plant nurseries in the U.S. "It went like crazy," he says.
Consider a 1982 example of his firm's usefulness. A sporting goods company, faced with the prospect of having to sell millions of dollars worth of tennis rackets, baseball gloves and gym bags at a punishing discount, traded them to Atwood Richards at full wholesale value. The firm then combed through Atwood Richards' vast rotating inventory—recently valued at $150 million—and ordered rental-car privileges and thousands of hotel rooms for its sales meetings. Atwood Richards then traded the rackets and gloves to companies that used them as promotional prizes. The trading continued until Binn ended up with one million pairs of Keds sneakers, which he sold for $10 million.
Atwood Richards earns no commission and converts merchandise to cash only as often as necessary to pay overhead and salaries for Binn and his staff of 58. He won't say how much he or the company makes in a year, but Atwood Richards handles about 350 deals a month. Visitors to the company's Park Avenue offices are greeted by a huge red macaw named Cracker that was thrown into a trade five years ago, and down the hall a display case holds a treasure trove of trading memorabilia—garden hoses, bubble gum, batteries, burglar alarm systems. "We've also got these Halley's Comet telescopes," says Binn. "After the comet goes, what do you do with them then? They're still usable. And when there are chocolates left over after Mother's Day, if you take them out of the box you can trade them to hotels to put on guests' night tables. Bartering is really like an insurance policy when a company's marketing plan doesn't work."
Growing up in the Bronx, Binn realized early that he had a knack for wheeling and dealing. "Kids buy comic books, but when they're through with them, they're still good," he says. "So I'd say, 'Give me your Batman and I'll give you a Superman. Or how about a Batman and a Superman for one Spiderman?' At the ripe old age of 10, I took all my books, sold them and liquidated my position."
Binn laughs as he tells the story, but at the time it was no laughing matter. When he was nine his mother died of pneumonia. His father, a grocer, suffered a brain hemorrhage and died eight years later. "I had to bring myself up," is all he will say about that time, but he has obviously worked tirelessly to build a more secure life today. The father of three grown sons, Binn lives with Penny, his wife of 27 years, in a 12-room colonial house on Long Island, near an 80-acre farm where he breeds and raises Thoroughbred horses. But it is bartering that keeps him content. "It's great when you can come to work in the morning and not see the same widgets over and over again," he says happily. Apart from his family, it is his job, finally, that may be the one thing Moreton Binn wouldn't trade.