Corporate Counter Trade: IPO or Expansion
By Anthony G. Ziagos, Sr

It has been reported that most of the Fortune 500 companies engage in corporate counter trade, or barter, in one form or another. Whether you are an IPO or a firmly established company barter may be the key to enhance your bottom line by funding expansion, moving inventory, eliminating idle capacity, or filling empty seats, hotel rooms, airplane seats or anything that is about to expire. Some industries and professions are more conducive than others to corporate counter trade, but all firms can benefit from this strategy. There are several important factors that need to be addressed if you want to succeed in corporate counter trade --Understand the Concept, Inventory, and Company Strategy.

Understand the Concept. Ask questions. Learn about the market. If you stop and think about it money as a medium of exchange is a recent development compared to barter. Assign a key employee to monitor the activities and develop this new profit center. If you do not have a key employee or would rather not add new responsibilities to someone in house to guide you through the maze, GET HELP! Do not go in blind or like any other business concept you may waste time and money or worse, swallowed up or hustled. If you cannot spend the time to learn retain the services of a professional trade advisor or trade broker to help you acquire or dispose of your identified goods and services.

Inventory. Develop a list of what you have to offer and another list of what you want to acquire. Your key person should keep an eye out for opportunities that will help you save cash by obtaining goods and services on trade. As you become more experienced and more knowledgeable you will become aware of the real value of different goods and services in the open market. Most state of the art electronics, some hard goods, and low profit margin items are usually more difficult to obtain. Labor intensive services and high profit margin items are more readily available. There are exceptions to every rule and knowledge is the key to being successful at corporate counter trade. Idle inventory or unsold seats are costly to hold and even more costly if they remain unsold beyond their useful life.

Company Strategy. Establishing a company strategy on trade is important to your success. Too much trade and not enough cash will cause major problems for your company. Determine in advance what your limit is and determine your acquisition priorities. Identify your goals and objectives and monitor them carefully. If you use your trade strategically, you can deduct all of your trade as a company expense. It is not our intention to dispense legal or tax advise here so consult with your accountant and/or tax advisor before you engage in large scale trade and do not forget, the Internal Revenue Service has a form for reporting aggregate barter transactions on an annual basis.

There are several national and local trade organizations. For a fee, they act as a clearinghouse or "trade exchange." They represent members and groups who actively engage in corporate counter trade. The Internet has recently become a haven for the exchange of goods and services on a national level between individuals and companies. I would caution you strongly to do your homework and be very careful. You may never know who is on the other end and your goods may be long gone before you can find them. There are advantages and disadvantages to joining these organizations. You will have to experience them for yourself to understand the complexities of this profit center. Both publicly traded companies and privately held firms engage in corporate counter trade transactions on a regular basis. Take advantage of your profit margin to acquire goods and services in exchange for what you produce or have in inventory. Check with a trade broker for corporate counter trade opportunities.

© 2001 Middlesex Media Exchange

Anthony G. Ziagos, Sr. has over 20 years of experience in the corporate counter trade industry. He maintains active accounts with several national trade exchanges and is available for consultation or participation in your trade activities. He can be reached at Lowell Trade Exchange (978) 452-1031 or: