What is corporate barter?

Corporate barter is the process in which a business exchanges goods and services with another business.  Such goods and services, also called assets, can be underperforming services that the business offers but can also be unused inventory or real estate that the business owns. The exchange of assets allows businesses to secure assets from another company while keeping the financial expenses at a minimum. Many businesses, especially small and young businesses, try to keep their financial expenses low. This is why corporate barter is a great way for them to use their existing resources to obtain assets required from another company. 

Why corporate barter?

The main motive for a business to pursue corporate barter is to use unwanted or underperforming internal assets to secure goods and services that they need from another company. However, as mentioned above, this will be an asset for asset barter trade, which reduces the need for financial payments because the payment is carried out in the form of the goods or services that are exchanged. In the case of some barter transactions, it can also be a combination of assets and cash or barter trade coins that will be traded. While corporate barter deals allow businesses to use existing internal resources more efficiently, they also reduce the need for big financial investments or for external financial sources to secure goods and services from other companies. This ultimately increases the businesses’ flexibility and enables them to shift and adapt their business strategies more easily.

How does corporate barter work?

The basic concept of corporate bartering is that two businesses recover value from assets or services that have lost some or most of their value. Many companies have certain unused or unwanted assets. Such assets may be, for example, unused inventory, capital goods or real estate. The assets may be idle because of poor service performance, internal inefficiencies or other external problems faced by the business. In most cases, liquidating the assets would only bring in a fraction of the original value and would therefore mean a major financial loss for the company. In order to prevent that from occurring, pursuing a corporate barter is often the better alternative.

Also, to regain value, businesses that execute corporate bartering offer some of their less well-performing services or unwanted goods in exchange for the assets of another business. This way both businesses avoid financial expenses or at least reduce them. So, in an ideal case of corporate bartering, an underperforming service or unused good would be exchanged for another one. While an asset might be less worthy or entirely worthless to one company, it can be very valuable for another company. It remains to be noted that corporate barter helps to minimise inefficiencies and the waste of assets.

You don’t know how bartering works? Let us explain it to you in our article “How does a bartering system work?“.

Corporate barter platforms

In order to find other businesses that offer goods and services for other goods and services, online platforms such as baggl can be used. These platforms help businesses to showcase their own underperforming and unused assets to other businesses. In addition, businesses can also find the services and goods of other businesses, also interested in an exchange. Corporate bartering platforms, such as baggl, have many different listings in their database and can help with the matchmaking process. Businesses that set up an account can insert their services and goods and offer them to others. At the same time, they can look for the goods and services of other businesses. The platform will take all the information into account in order to find the best match for all parties involved.

Sometimes, corporate barter companies acquire unwanted assets from businesses in exchange for corporate trade credit. This credit can be reused by the business to obtain other goods or services that the business needs and that the corporate barter company offers on its platform. In many cases, corporate barter companies offer different types of media exposure which businesses acquire in exchange for their corporate trade credits. Thus, corporate bartering can be a great way for businesses, especially small businesses, to use their low-value and unwanted assets to increase their media exposure and reach. This way, an asset that seemed almost worthless or lost can still add significant value to the business.

Summary – Why should you consider barter for your business?

• Corporate barter helps your business to keep the financial expenses low
• Corporate barter helps your business to stay flexible by not making big financial investments
• Corporate barter helps your business to make use of unused and unwanted assets
• Corporate barter helps your business to make use of bad performing services
• Corporate barter helps your business to minimise inefficiencies and waste of assets

Learn more about the benefits of barter in our article “What are the Pros and Cons of Bartering?“

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