What Is Corporate Barter
Corporate Barter is no mystery, just smart business.
The strength of our business is our relationships- with clients and with our media and other fulfillment partners. We bring the two together to help clients solve problems, practically and strategically. Our focus is long-term.
Over $1B in Purchasing Power
ICON’s Financial Strength and purchasing collective allows us to deliver unmatched value to our clients
Corporate Barter
ICON’s Corporate Barter Solutions enable companies to recover 100% of lost value from a broad range of underperforming assets.
A corporate barter transaction is an exchange of one asset for another over a span of time, with both parties gaining leverage built into the deal. Both act as partners. ICON is the facilitator; the client continues to do business as it would ordinarily. Every transaction can be customized to the meet the clients needs.
Typically, the asset traded is impaired in some way. ICON acquires it, paying the client substantially more than the market would. In exchange, the client buys media, travel, printing, or other services we offer.
Most companies hold varying levels of unwanted inventory, capital goods, real estate, delinquent receivables, or other assets that aren’t performing or providing ROI. A carefully constructed transaction with ICON can not only improve economic recovery but also allow the clients to shed carrying costs, risk and uncertainty.
Additionally, ICON has expanded our scope into a variety of new applications. Not only can clients solve asset challenges, they can also generate cash funding for new business initiatives or cover existing costs such as leases, or simply generate improved purchasing efficiencies for media and other goods & services.
Corporate Barter Transaction Types
There are three types of corporate- barter transactions (and variations):
Trade Credit
A client receives ICON “trade credit” for an asset. Like a coupon, these are redeemed by the client over time from ICON’s inventory of goods such as media, travel, printing or other services we offer.
Cash
Some of ICON’s clients prefer to receive cash as payment in a barter transaction. In this scenario ICON delivers cash at closing to purchase an asset, finance a new acquisition, fund business initiatives, or improve cash flow.
In a cash-only transaction, the client sells an asset at the typical barter multiple of two to three times market value and receives the proceeds in cash immediately (Vendor Subscription Agreement or VSA). In return, the client agrees to source on a cash basis a predetermined amount of goods and services through ICON.
Building A Deal To Address The Clients’ Needs – A Combination of Trade Credit and Cash
One of the benefits of corporate barter is flexibility. In some cases, the best deal is one that combines trade credit and cash. ICON works closely with our clients to understand specific needs and interests, and then builds a deal to address them.
Undervalued Assets
Through the normal course of business, companies occasionally find themselves with some amount of excess or undervalued assets. ICON purchases all types of underperforming assets.
Excess Inventory
Real Estate
Liabilities Of All Types
Capital Equipment
Non-Strategic Business Units
Aircraft (Even A Blimp)
How Does Icon Create Financial Leverage In Media And Other Services?
ICON creates costs advantages in media and other goods & services beyond the efficiencies our clients normally achieve. We maintain longstanding relationships with the nation’s leading media companies, travel properties and professional services firms and secure large quantities of future inventory at advantageous rates. These partnerships are crucial: the quality of our products and services is essential to the success of a barter transaction.
ICON acquires transaction fulfillment inventory in numerous ways. Our partners often trade media inventory to ICON in exchange for goods and services required to operate their businesses. Other times, ICON solves a financial problem or funds a capital expense for a partner in exchange for access to a large quantity of future media inventory at an advantageous rate. The arbitrage created in this process is the value our clients ultimately receive: When they agree to place media through ICON at their usual costs, clients receive a premium price for challenges assets or funding for business initiatives at the transaction’s onset.
Client Identifies A Need To Recover Value In An Asset Or An Initiative It Wants To Fund
Through the normal course of business, companies occasionally find themselves with some amount of excess or undervalued assets.
Excess inventory
Slow Moving and/or Obsolete
Discontinued
Prior Season
Short-Dated
Returns
Capital Equipment
Delinquent and Under-Valued Receivables
Non-Strategic Business Units
Real Estate
Owned and leased property
Clients Can Use Barter Transactions To Fund Expenses Or Initiatives Such As:
New Product Launches
Sponsorships
Marketing Expenses
Production Expenses
Building Expenses
Corporate Aircraft
Liabilities of All Types
ICON purchases the asset or funds the initiative; transaction type chosen
ICON and the client agree on the purchase price of the asset. Together, ICON and the client determine which of three types of barter transactions best meets goals and objectives. The common elements in each transaction are [1] ICON provides a higher payment to the client than they would receive in the open market and [2] the client makes a counter-commitment to purchase goods and services at market rates through ICON.
Trade Credit: The client receives trade credit as a form of payment for its asset. The credit is applied to future purchases from ICON, typically media such as a broadcast schedule or a digital campaign. This type of transaction is preferred by clients who need flexibility within their spending commitments – for example, companies that have unpredictable business cycles.
Cash: ICON provides cash to purchase an asset or fund a necessary business expense. In exchange, the client purchases a predetermined amount of media (or other goods and services) through ICON on a cash basis for a specific time period.
Blend of Trade Credit and Cash: A client who exchanges an underperforming asset for trade credit may also require a certain amount of cash. ICON works with the client’s internal stakeholders to formulate the right mix of both cash and trade credit as payment.
ICON remarkets the asset to non-channel customers
When ICON buys a client’s asset and remarkets it, ICON does so without harming the client’s brand value or market pricing. We work closely with clients to develop optimal remarketing parameters. This usually means using separate and discrete sales channels pre-approved by the client.
With almost 30 years of remarketing and liquidation experience, ICON tailors programs to address the most challenging business scenarios.
ICON delivers goods and services
In corporate barter, the term “fulfillment” describes what clients purchase from ICON to satisfy a barter transaction. If the fulfillment is media, ICON defers to the client’s advertising agency for plans, specifications and rates. For other goods and services, ICON also delivers the same quality, price and timing the client normally receives — in other words, an ICON client experiences business as usual throughout a barter transaction.
Most important, fulfillment consists of planned, ongoing business expenses: nothing above or beyond what the client would ordinarily purchase.
Finance
ICON has unmatched access to capital reserves which allows ICON to continuously invest in capacity-driven industries.
Media
ICON’s Media department is driven by our diverse and innovative expertise in media trade positions.
Sourcing Procurement Solutions
ICON is ambitious when it comes to our clients’ usage of Trade Credit for goods and services within suppliers.
Real Estate
Our real estate department provides solutions for both owned and leased properties around the world.
The Corporate Barter Handbook For Executives
What is corporate barter? How are companies using barter transactions to improve their business outcomes? ICON’s John P. Kramer, CEO, and Clarence V. Lee III, CFO, explore these and other topics in their book, Unlock Financial Value with Corporate Barter.
In addition to specific strategies, they also discuss case studies and explain the benefits companies can (and should) receive from corporate barter.
This eBook is compatible with the Amazon Kindle, Sony Reader and other readers, as well as mobile devices.
