Corporate trade is key to solving supply chain challenges with minimal risk to inventory
By Andrew Bulmer, President and Managing Director, Active International (Canada)
Unforeseeable disruption, volatility and speed of change are the hallmarks of the What’s Next Economy. With this increased complexity, supply chain professionals are leaving no stone unturned to squeeze costs, gain more control and agility, and deliver new forms of value to their organizations. I’m proud to be leading a business that is an original disruptor. For 35 years, corporate trade has been used as an out-of-the-box tool to solve supply chain challenges and minimize the financial risk of inventory and asset write-downs.
ACHIEVING MORE WITH CORPORATE TRADE
Corporate trading is a modern form of barter for large businesses. Businesses trade in their excess assets (such as surplus inventory and equipment), and in return receive a payment of trade credits that are usually used by the marketing team to offset business expenses such as advertising. Because the trade credits paid are typically the wholesale value of the goods, customers avoid what would otherwise be a costly financial write-down.
Over the years, innovators in supply chain have used corporate trading as a tool to achieve more value for their inventory and other assets, while providing never-found-before value across their organizations. Benefits include:
- An insurance policy for excess/seasonal inventory or other assets
- Less worry about inventory turnover, more focus on business growth and innovation
- Free up warehouse space for higher margin, faster selling product
- Drive business growth with larger advertising budgets
WHAT’S NEXT?
We’ve seen steady growth in the adoption of corporate trade, with a sizable jump in our business in the past three to five years alone in Canada.
Traditionally, this business model is used as a financial tool to solve inventory problems. We’re also seeing a shift as marketers build our business model into their annual planning as a smart strategy to amplify media and boost sales of their products. As CMOs continue to be challenged to bring more to the table and to achieve more (for less) in a fragmented media landscape, trading helps to uncover value across the business where others can’t.
I believe the winners of the What’s Next Economy will be those with the greatest organizational resilience – the ability to navigate volatility, and continue to innovate while they operate. We look forward to helping those businesses find hidden value in their assets, achieve new levels of financial flexibility and ultimately stay prepared for what’s next.
Contact Andrew Bulmer at 416-218-2370. He can be reached by email at andrew.bulmer@activeinternational.com.
Supply Chain Canada is SCMA’s print and digital magazine for its members and the extended Canadian supply chain community. With timely and engaging topics that promote current best practices, the magazine will bring researched, intelligent and forward-thinking editorial features to professionals in supply chain, and provide readers with insight, analysis and continued education in creating and managing an effective and strategic supply chain.
