Category: Cost Management


By Andrea Allen

The holiday season is a time of giving. We’ll give gifts to our children, our parents, those cousins we see once-a-year, our co-workers, dog walkers, and of course, the odd gift to ourselves (because we deserve it after all). However it’s the season not just of giving gifts to our family and friends, it’s also the time when many of us contribute to our personal charities of choice. The malls just wouldn’t seem the same without a bell-ringer beside a Salvation Army red kettle or giant toy mountains waiting for our additions.  However, charitable donations of all varieties have been in decline over the last couple years due to the economic downtown. Sadly, it’s during these times that donations are most needed by the greatest number of people. In an effort to increase the value of a dollar, one suggestion would be to look for products that are not only great gifts, but also give back to society.

TOMS shoes is a company that will donate a pair of shoes to needy children all over the world for every pair purchased by a customer. You can feel confident that buying your kids a pair of TOMS shoes would put you in the “cool mom or dad” category and you can feel good knowing that your purchase helped someone in need. Similar to TOMS, Warby Parker is a stylish glasses company that for every pair of glasses purchased they will donate a pair to someone in need.

If you’re looking to deck out your special lady in some jewelry this Christmas, why not take a look at a Haitian hand-beaded necklace or a turquoise bracelet from Thailand. Available through World Vision, these and many other gifts can not only put a smile on a loved one’s face this Christmas, but can also contribute to the economic well-being of developing communities. There’s also iSanctuary.org that has a wide variety of beautiful pieces that are sure to impress even those hard-to-shop-for names on your holiday list.

There are even websites that allow consumers to choose the cause they would like to support through their purchase of gift items. Giftsthatgive.com is one such site where $1 for every $5 spent will be donated to the cause of your choice.

But what about the corporate world? Corporate charitable donations can also go the extra mile. As part of the ActiveCares program, Active can contribute funding to an organization’s CSR causes in return for a commitment of a portion of the company’s existing media, freight, or printing spend. Active’s Corporate Trade model allows our clients to leverage our services to benefit a cause without spending incremental dollars. So even if you or your company are strapped for cash and are considering scaling back your charitable contributions this season, consider using more creative ways to stretch those holiday dollars. It will certainly put you on Santa’s “good” list.

By Scott Miles, Client Relationship Associate

Client Solutions Associate

Your business has entered into a Corporate Trade deal. You have exchanged an underperforming asset, perhaps excess inventory, in return for Trade Credit that can be used with cash to pay for routine budgeted business expenses.

To get the most out of your Corporate Trade deal, here are some best practices to consider:

1)       Bring all departments on board: A Corporate Trade deal is a financial solution – enabling the restoration of an asset’s book value where a company may have otherwise realized loss. For this reason, a significant number of Corporate Trade or barter deals may originate with procurement, supply chain or finance. Yet, Trade Credit usage is what delivers value. Anyone involved in the actual redemption of your Trade Credit – primarily marketing folks – should be aligned with all other departments in regard to the internal objectives of the deal. Ideally, leadership of each department should ensure that the necessary steps needed to achieve these objectives are communicated down the chain. It’s important that the parties involved with using the Trade Credit understand the financial benefit and receive incentives to drive it.

2)       Incentives accelerate Trade Credit usage: Even if every department within a company understands the financial benefit of using Trade Credit, sometimes a little nudge is helpful. Placing incentives behind credit usage can produce great results. For example, given the bottom line benefit  of Trade Credit redemption, one customer felt justified in giving an incentive to the person who managed acceleration of credits internally. Incentives don’t have to be centralized or financial. In fact, it is just as effective to connect incentives to pre-existing company activities. One idea is creating an internal rewards and recognition program, where “rewards points” are given to marketing and brand managers with the highest Trade Credit usage rates.

3)       Always involve your media agency: There is a reason that corporate barter and trade specialists like Active International work without taking a media fee. While we do employ experienced media professionals, as a company that offers a financial solution our primary value proposition is not in the planning of your media campaigns. Rather, our value is in the ability to allow you to fund a portion of those campaigns with your Trade Credits. The agency is a key partner when it comes to Corporate Trade. Working hand-in-hand with your Corporate Trade specialist, the agency is your media guru who ensures that the campaigns are tied to your strategic goals.  Your Corporate Trade partner works with your agency on the purchase of media.

4)       Think global: If your company operates globally, consider the possibility of transferring a portion of your Trade Credits to other offices for redemption in international markets. Corporate Trade companies like Active International have operations in 14 countries around the globe, and routinely facilitate this kind of arrangement as part of a given trade deal.

5)       Consider every expense a potential opportunity for Trade Credit redemption: Strong Trade Credit usage drives the success of a Corporate Trade. Active International, for example, has a team dedicated to each customer across a variety of expense areas – media, retail merchandising/print production, freight and travel. A Client Solutions Manager (that’s me!) is your point person, designated to work closely with your agency and all relevant parties on your business to ensure that your Trade Credits are redeemed in an efficient and seamless fashion. Never hesitate to ask your Corporate Trade partner whether you can apply Trade Credits to an upcoming expense. Whether you’re looking to book a sales conference in New York next fiscal, preparing to go to market with an ad campaign, have upcoming production costs for point of sale, your Corporate Trade partner could be a helpful resource.

Your turn: What best practices have you used to implement a Corporate Trade deal in your organization?

Andrew Bulmer

SVP and Managing Director

With the 4thquarter approaching for those companies on a calendar fiscal, financial executives are looking closely at the balance sheet to review inventory turnover. And if you’re in sales or marketing, many executives are looking closely at whether or not they will hit their forecasts.  If results aren’t where they should be, one contributing factor could be excess or obsolete stock.

The big question is how to offload this excess without taking a loss?  Historically, to avoid a complete write-off on inventory, it has been liquidated. However, margins suffer (often to the tune of a third of the asset’s original value for most organizations).

It’s no wonder many Fortune 1000 companies have embraced Corporate Trade as a strategic tool to maximize value on underperforming assets. Corporate Trade businesses, such as Active International in Canada, can offer up to three times the cash value that excess stock is worth on the open market.

With Corporate Trade (also referred to as Corporate Barter) the excess inventory is paid for in Trade Credits which can be spent by businesses on things like media campaigns – anything from television and digital advertising, as well as on conferences, events and corporate hospitality. This approach allows organizations to hit their inventory sales forecast for the year ahead and helps them to perform well in tough trading conditions.

Here are some tips for working with corporate trading organizations:

  • Experience is key – only deal with reputable, established Trade companies who have financial stability and wide breadth of trading relationships. This ensures that your company can get the full value of the Trade Credits, which is how you realize the value. Ask your Corporate Trade firm for Canadian customer references and case studies.
  • Local representation, global reach – if your business operates worldwide, partnLocal representation, global reacher with a Corporate Trade company with similar reach. You’ll be able to generate extra value for your media  spend in the countries in which you operate.  However, it’s important that your Corporate Trade firm also has a local presence, not only to better serve you, but to develop sustainable trade relationships with local media providers and other vendors.
  • Independent from agency-ownership – the value  of a Corporate Trade transaction is only realized once Trade Credits are spent, and only if the credits lower the cash outlay on rates you would have otherwise paid.  For example,  if you wish to spend your Trade Credits on media advertising, and you select a Corporate Barter company owned by a large media buying agency,  there is potential conflict of interest.   The company setting your media rates is also the company telling you  how much of a discount you’ll receive.   Independent Corporate Trade firms such as Active International, working alongside your media agency of record, act as the necessary check  and balance to ensure you’re receiving dollar for dollar value. The agency  sets the rates as they always do, Active applies your Trade Credits against  them.
  • Approved  resellers – it’s vital that a business sells excess inventory to approved buyers, otherwise they risk brand integrity.   Ensure your Corporate Trade partner has the necessary buyer relationships in place and that you sign off on final placement.

  • Reporting – always ask about reporting procedures before making  a deal.  You want to ensure you are  doing business with a Corporate Barter company who can provide you with  regular reporting on your Trade Credit usage.  See also Accounting for  Trade Credits.

As an industry, Corporate Trade has grown enormously in recent years. It is becoming more and more commonplace for financial, sales and marketing professionals to include it in their forecasting – rather than as a last resort. Corporate Trade really is a smart business solution for finance, sales and marketing professionals looking to hit their numbers without sacrificing margins.

For additional tips about using Corporate Trade for your underperforming assets, check out What Is Corporate Trade and The Top 6 Myths About Corporate Trade.

 

Your Turn:  Have you used Corporate Trade as a tool to hit your year-end numbers?  Tell us about it.

Andrew Bulmer

SVP and Managing Director, Active International Canada

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