International success for Corporate Trade company

Posted by Retail World magazine Around the office
4 1 2015

Twenty years since its inception, Active International has become an established industry leader in Australia and is holding the helm of corporate trade.

Founded in 1984 in New York, Active International is a leading corporate trade company with a client portfolio of some of the world’s largest advertisers.

Traditionally known as barter, corporate trade allows businesses to use their own assets to pay for services including media, marketing, travel, freight and property.

Active launched its business in Australia in 1994 and today has operations across 14 countries. The company has built long-standing relationships with partners from a wide range of industries, including FMCG, manufacturing, pharmaceutical and retail, with Active’s largest clients in Australia including Unilever, Sara Lee, Telstra, Lion Foods, Lindt, Mars, Weight Watchers and Johnson & Johnson.

Active Australia works with more than 50 clients, helping them restore value to underperforming assets through media agencies. “Twenty years ago, Active started with one client,” Active International Australia Managing Director Areef Vohra said. “Today, we trade more than 25 media campaigns a month and work with more than 50 clients.”

In its 30 years in business, Active has created value for its clients of some US$1.7 billion ($1.8 billion) worldwide. In 2013 alone, Active’s annual media turnover reached US$1.3 billion globally.

Active’s key focus is to help clients solve problems with corporate trade, show them how to do it well and make it a success story.

“We believe corporate trade is a smart way of doing business, so our mission is to raise awareness in the market of the true benefits of corporate trade, establish and promote the best practices and encourage businesses to consider it as a strategic tool for their business, making their budgets work harder,” Mr Vohra said.

However, a few myths in the marketplace can put off companies from considering corporate trade.

“We try to educate the market on the benefits of doing business this way and bust those myths one by one,” Mr Vohra said. “Our core objective with all our clients is to restore value where it is diminished and create value where it is needed.” Many companies use corporate trade to maintain book value on slow-moving, returned, or unwanted assets such as perishable food, capital equipment, marketing commitments or last season’s clothing.“

In a typical example of a corporate trade transaction, a client has assets that have a wholesale value of $1 million but, through liquidation, the cash value will drop to only $300,000 and the client will be at a loss of $700, 000,” Mr Vohra said.

“Active International comes to the rescue and buys the unwanted assets, paying the full wholesale value in trade credits. Once the assets are sold, the client can use the trade credits and combine them with cash to purchase the business goods and services that Active has to offer, from media advertising space to travel, property, freight, etc.”

According to Active Commercial Director Cameron Swan, however, companies don’t have to have an excess-stock problem.

“Corporate trade is a strategic tool used by clients who want to make their marketing budget work harder,” he said. “We offer three different business models to companies, each designed to best suit the challenges their businesses face.”

One of the biggest advantages for Active International is that it remains one of the few independent corporate trade companies in the world.

Head of Media Ricki Assenheim pointed to the big difference between being agency-owned and independent.

“Being an independent company allows us the flexibility to make media investments where it can provide greater value for media owners and give us maximum returns for our clients,” he said.

“No other corporate trade company can make continuous investments to the level that Active does.

“Active transparently demonstrates that the value it creates for the company is additional to their media agency.”

Not a new business model, corporate trade is often perceived as being complex and, as a result, is often misunderstood. Yet hundreds of thousands of companies have been using corporate trade to receive extra value. In 2013 alone, more than 400,000 companies worldwide utilised their excess or underperforming assets to earn an estimated US$12 billion in previously lost and wasted revenue*.

Mr Vohra would like to see Active spearheading the corporate trade industry in Australia, keeping clients happy and proving to everyone that this is a smart way of doing business.

“With continued pressure on margins from major supermarket chains and downward pressure on marketing budgets, I think everyone will be looking for a way to squeeze every cent’s worth of value from their marketing dollars,” he said. “Corporate trade will provide more and more clients with smart and cost-effective business solutions for the modern age.”

* www.irta.com (International Reciprocal Trade Association).

Why clients use corporate trade?

• Boosts the bottom line.

• Achieves balance-sheet restoration.

• Delivers higher returns on slow-moving stock.

• Improves cashflow.

• Sustains growth by making assets work harder.

 

Photo of Anna Meaclem

Contact us

If you would like to find out more about our Corporate Trade business models and how this could be beneficial for your business, get in touch with Anna Meaclem, Commercial Manager, Active International by email or phone.

+61 2 9466 9109