A corporate trade company generally will purchase surplus inventory, capital equipment, real estate or even receivables from a client for up to full original value with cash and/or a trade credit. These assets are sold by the corporate trade company under client-specified guidelines. The client then uses the trade credit to offset operational costs. By using the trade credit to pay in part for purchases, value is restored to the client's assets.

Trade credits can be used to purchase a wide range of goods and services available through the corporate barter company that the client may routinely acquires for its daily operations. However, many companies utilize corporate trade companies to exchange excess, slow moving, current, outdated, or even obsolete inventory primarily for media. It is estimated that most corporate trade companies see an average of 80 percent of their trades involving media. They are usually extremely adept at acquiring advertising time and space and placing the media. These buys, however, are not placed without client and agency approval.

The size of a single transaction with a corporate trade company will vary from between $50,000 and $4 million and sometimes even more. Corporate trade can be a profitable alternative to traditional markdown and liquidation activities. Manufacturers who consider corporate trade are wisely seeking to convert inventory that is under-performing into partial funding of future overhead costs. Not to mention that it is also a safe and effective marketing strategy.

Some of the key advantages that corporate trading provide:

• Leveraging doubtful assets. Use trade credits to obtain needed goods and services, thereby reducing cost of capital

• Protect your distribution chain, while opening new distribution channels

• Increase your return on investment

• Improve cash flow by saving cash expenses

• Increase capacity utilization and spread overhead costs

• Reduce or eliminate carrying (warehouse) costs

• Maintain present product pricing integrity

• Focus more time on marketing efforts for more profitable objectives.

Corporate trade may also be referred to as Corporate Barter.