You’ve just finished your annual Halloween promotion, with your products decked out in suitably spooky packaging. But it looks as if sales this year were not quite where you thought they’d be. The product is still good, but with that seasonal packaging consumers may not bite. Now what do you do with your inventory?
One answer is corporate trade, a strategic business practice designed to mitigate the financial risk involved in inventory and asset management. “We’re in the business of restoring value where it’s diminished and creating value where it’s needed,” explains Andrew Bulmer, senior vice-president and managing director of Toronto-based Active International Canada.
The Canadian division of Pearl River, N.Y.-based Active International offers solutions to brands in a variety of sectors looking to recapture value from under performing assets, including inventory. Bulmer says approximately a third of Active’s Canadian customers are producers or marketers of food products, who typically turn to Active to deal with excess inventory, seasonal products or other promotional items.
Active issues them cash and/or trade credits for the wholesale value of the products, which can be then used to buy media spots in a wide range of media platforms, including digital, TV, radio and print. The products are then marketed to retailers already approved by the manufacturer, often in a discount market.
If products are re-sold outside of Canada, Bulmer says Active works with a co-packer to ensure packaging is properly labelled and meets all regulations.
“Everything we do to remarket products is always with the approval of the customer,” he says. “Once our customers understand our business model they often incorporate it into their annual plans rather than liquidating stock,” he adds. “We do give them a competitive advantage.”
Tony Angelucci, Marketing director for ConAgra Foods, agrees: “Our biggest benefit is that we’re getting good value for the products.”
The company has used Active since 2006, usually once a year for excess or shortcoded products or goods with older labels. Angelucci says the results have been excellent.
“They’re a partner in our business deals — I don’t necessarily want to have to use them but it’s a profitable, safe situation.” Angelucci notes that being able to control where the products end up being retailed is key. “It would normally take me more time to deal with third-party vendors, and I wouldn’t have control of where products end up or know if they’ve been resold or tampered with — but because it has your brand name on it that will hit you two or three years down the road. With Active I’m not going to have that problem.”
As well as offering media buys, Active offers logistics, printing and travel and event planning services, something Bulmer says the company continues to expand on so as to maximize value for its customers.
