Challenge:

Our client forecasted higher sales of a new product than they were able to achieve in the Canadian marketplace, and were forced to deal with excess inventory approaching its “best before” date. This problem was leading the company to realize a loss of over $700,000.

Solution:

Active purchased the inventory at full wholesale value using Trade Credits. Active negotiated the sale of the goods to a retailer that was approved by the manufacturer, and had the goods shipped directly to the buyer’s warehouse. The retailer then sold the goods at a reasonable discount to ensure the product was consumed prior to the best before date.

Execution:

Working with their agency, Active placed pre-budgeted agency planned television and radio advertising. Media was purchased per existing guidelines, specifications, pricing and added value, and the manufacturer was able to use their Trade Credits as partial payment for the media. 

Benefits:

• Client realized full wholesale value for excess inventory and short-coded products.
• Media placement according to established media plans without alteration.
• Client used up 100% of their Trade Credits over two years.
• Client generated $1 million of incremental cash flow.