What Types of Companies Can Benefit from Corporate Barter?
Companies that put products or services into the marketplace and have a consistent advertising budget benefit most from corporate barterThe creation of value by exchanging a client's unwanted or undervalued asset for the promise to purchase over a period of time from the corporate-barter company a defined set of goods and/or services, called fulfillment. (Sometimes mistakenly referred to as Corporate Trade.).
Consumer-goods companies are especially good candidates. So are original equipment manufacturers, processors and packagers. These types of companies need to differentiate themselves and tend to rely heavily on advertising, giving them an expenditure that can be leveraged through corporate barter.
The questions that must be answered to ensure that barter is a viable solution are:
- What are your routine purchases?
- Are any of them perishable commodities?
- Are the quantities purchased large enough to support a corporate-barter transaction? (Rule of thumb: the quantities purchased should be five to six times larger than the purchase price of the asset sold to the barter firm.)
To learn more about getting started, review the "Maximize Your Benefits" section in the CFO Corner.