Corporate Barter Industry Approaches $9.3 Billion in 1998; Largest Barter Companies Had Largest Increases
NEW YORK--(BUSINESS WIRE)--Feb. 22, 1999--"The corporate barter industry experienced a year of dramatic growth in 1998," said
Beatrice B. Lund, executive director of the Corporate Barter Council (CBC), the not-for-profit industry trade association. She
continued, "while the industry as a whole grew 13% over last year, growth in 1998 was most explosive among the larger, well-financed
and long-established corporate barter companies."
The Corporate Barter Council commissioned a study to be performed by an industry expert who has been measuring the industry since
before the 1990 inception of the CBC. The report showed that the corporate barter industry, overall, grew to $9.265 billion in North
America, compared to $8.2 billion in 1997. Simultaneously, the CBC surveyed its members on 1998 volume compared with 1997. Their
responses, when averaged, reflected a 30% growth -- far higher than the corporate barter industry overall. "One strong factor
contributing to this disparity is that the larger corporate barter companies are able to handle larger barter transactions and fulfill larger
volumes of trade credits expeditiously," Lund said.
Lance Lundberg, president of Stamford, Conn.-based ICON International noted an additional reason: "The rapid legitimization of
corporate barter tracks the histories of other formerly out-of-favor industries such as media buying services, sub-prime lenders and
closeout companies which have been, in 1998, Wall Street favorites." Lundberg's comment is borne out by another CBC survey
question to which half of the members said that they had been approached as an acquisition target, in 1998, by one or more
companies. The rest refused to answer the question.
Other Trends
"As well as more repeat business from prior clients, we're seeing more prestigious, well-known companies embracing corporate barter,"
said Michael Suscavage, president of New York-based Global Media Resources. The CBC survey also noted that the members are not
only looking at more inventories (+36%), but also larger-sized inventories
(+35%) and more inventories of upscale goods.
Paul St. Martin, president of the Allan Hackel Organization (Newton Center, Mass.) and also president of the CBC, pointed out that
"not only are more companies embracing corporate barter, but ad budgets have expanded because of the strong economy. Corporate
barter is a way to make those ad budgets stretch even further."
A number of members' survey responses noted that more clients are increasingly seeking partial trade credit fulfillment in goods and
services other than media. "One solution to this is vendor trading," said William Steinberg, president of New York-based Tradewell, Inc.
He continued, "we offer clients the ability to trade with their existing vendors/suppliers without changing the commercial terms.
Working with our client, we convert their payments to vendors from all cash to a mix of cash and trade." Examples of this are ocean
and air freight, corrugated, wine corks, bottles, other packaging, 40' trailers, roofing and tape duplication services.
Alan S. Elkin, CEO of Active International (Pearl River N.Y.) confirmed this trend, saying "We are comfortable working with clients
retiring trade credits with goods and services, as well as with media."
Founded in 1990, the CBC promotes the use of corporate barter as an innovative and effective financial solution to business
challenges, including not only the profitable way to turn excess or obsolete inventories into valuable goods and services, but also to
build business via expanded advertising and marketing budgets, extended geographic distribution and increased incremental sales.
By joining the CBC, members agree to adhere to a strict code of ethics, and to be subject to a peer review system of self-regulation.
In addition to its regular members -- U.S.-headquartered corporate barter companies -- the CBC has associate members that include
media representatives, consolidators and non-U.S.-headquartered corporate barter companies.
Note: A free packet of information on corporate barter can be obtained by calling 1/800/949-5531 or sending a business card to CBC,
244 Madison Ave., Suite 272, New York, NY. Website:www.corporatebarter.com
CONTACT:
The Lund Group, New York
Mike Bruneau, 212/949-1562
Email: LundGroup@aol.com
www.corporatebarter.com
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