Today's corporate barter is a tool of corporate strategy.
For many firms, even those that have leveraged it successfully multiple times, 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.) is a reactive strategy – a way to get rid of an unwanted asset or escape an underperforming investment.
But consider the case of the fashion house* that sells through nationwide department stores, singled out by a trucking union for a two-week wildcat strike just as it starts to ship its spring line. Unable to pull its magazine ads, the brand disappoints thousands of potential customers and the season is a ﬂop despite critical raves from fashionistas and the press.
With a consistent semiannual ad buy, the house can offer a barter ﬁrm the leverage it needs. As for disposing of the remaindered clothing, the brand has suffered more than enough damage already – having the inventoryWhile this can refer to a client's physical inventory of merchandise (which, if it represents an undervalued asset, could form the basis of a corporate barter transaction), in the corporate barter world, inventory more commonly refers to a supply of advertising time/space purchased in advance by the barter company, which client companies use as fulfillment to complete their side of a corporate barter agreement. show up on discount racks is unacceptable. A barter ﬁrm known for selling high-end assets discretely is hired. It recommends several under-the-radar sales channels, including chains of specialty shops in northern Europe and Japan, invitation-only overrun sales in Manhattan and Beverly Hills and a two-minute, eco-slanted infomercial on an indie-ﬁlm cable channel. Crisis averted. And the fashion house now uses corporate barter as a tool to control excess inventory through out-of-channel sales.
*Names and brands withheld to maintain anonymity.
Want to know more?
We wrote the book on corporate barter, literally. The passages in this section of the site have been excerpted from Unlock Financial Value with Corporate Barter by ICON founders John Kramer and Clarence Lee. To receive a complimentary copy (e-book or hard cover) and jump-start your understanding of how corporate barter creates value, click here now or call 203.328.2300