2. Introduction –Introduction –
Challenges to modern businessChallenges to modern business
• Initial market entry costs before selling first unit of productInitial market entry costs before selling first unit of product
• Many sellers for same productMany sellers for same product
• Little or limited product differentiationLittle or limited product differentiation
• Cut-throat pricing by competitorsCut-throat pricing by competitors
• Inventory overflow due to excess capacities in industriesInventory overflow due to excess capacities in industries
• Inventory carry over costsInventory carry over costs
• Fickle consumer mentalityFickle consumer mentality
• Difficult trade terms leading to delays in raising operatingDifficult trade terms leading to delays in raising operating
capitalcapital
• Low demand during recession leads to more uncertaintyLow demand during recession leads to more uncertainty
3. History of barter businessHistory of barter business
• Earliest form of businessEarliest form of business
• Exchange of goods and servicesExchange of goods and services
• No cash transactionsNo cash transactions
• Transaction between buyer and seller directlyTransaction between buyer and seller directly
• Limited product portfolioLimited product portfolio
• Limited transactions (in terms of volume and value)Limited transactions (in terms of volume and value)
between each buyer and seller.between each buyer and seller.
4. The modern barterThe modern barter businessbusiness
• Unlimited transactions between or among companiesUnlimited transactions between or among companies
• Institutionalised and regulated transactionsInstitutionalised and regulated transactions aimed ataimed at
creating value by leveraging on inventory, rather than justcreating value by leveraging on inventory, rather than just
liquidating stocks.liquidating stocks.
• SpecialisedSpecialised and professionally run exchanges coveringand professionally run exchanges covering
products across industries.products across industries.
• Over 2,000 barter companies all over the world,Over 2,000 barter companies all over the world,
• Transactions of more than US$40 billion per year.Transactions of more than US$40 billion per year.
• In 2004 the barter industry in North America transactedIn 2004 the barter industry in North America transacted
more than $1 billion.more than $1 billion.
• By the year 2010, the number of companies and turnoverBy the year 2010, the number of companies and turnover
expected to multiply ten times.expected to multiply ten times.
5. Traditional model of marketing productsTraditional model of marketing products
Challenges :Challenges :
• Expenses mount even before selling first unit of productExpenses mount even before selling first unit of product
• Many sellers for same productMany sellers for same product
• Little or limited product differentiationLittle or limited product differentiation
• Cut-throat pricing by competitorsCut-throat pricing by competitors
• Excess capacities in industries leading to inventory overflowExcess capacities in industries leading to inventory overflow
• Inventory carry over costsInventory carry over costs
• Fickle consumer mentalityFickle consumer mentality
• Difficult trade terms leading to delays in raising operatingDifficult trade terms leading to delays in raising operating
capitalcapital
6. • Sourcing of required products/service without spendingSourcing of required products/service without spending
cashcash
• Ease of finding buyers for own product/serviceEase of finding buyers for own product/service
• Spread of product/brand across geographical boundariesSpread of product/brand across geographical boundaries
• Less effort on part of seller to market the productLess effort on part of seller to market the product
• Low marketing costs allowing competitive pricingLow marketing costs allowing competitive pricing
• Possibility of clearing inventory with low costsPossibility of clearing inventory with low costs
• Possibility of expanding production capacityPossibility of expanding production capacity
• Receive uncollected debts through factoringReceive uncollected debts through factoring
Why do barter?Why do barter?
7. Cost benefits of barter over traditional salesCost benefits of barter over traditional sales
Trade
margins
Trade
margins
Advtg & Prom.
Costs
Advtg & Prom.
Costs
Salesforce
costs
Salesforce
costs
Transaction
fee
BarterTraditional sales
• Other benefits fromOther benefits from
barter:barter:
• Zero selling costsZero selling costs
• Reduced inventory costsReduced inventory costs
• No documentation costsNo documentation costs
• Savings in purchasesSavings in purchases
• No interest costsNo interest costs
• Cost optimisationCost optimisation
8. Popular products/services barteredPopular products/services bartered
• Print media, especially vernacular publications & outdoorPrint media, especially vernacular publications & outdoor
mediamedia
• Consumer durables & non-durablesConsumer durables & non-durables
• Industrial consumable products, like paints, etc.Industrial consumable products, like paints, etc.
• Furniture & furnishings, like Venetian blinds, sofas, tables,Furniture & furnishings, like Venetian blinds, sofas, tables,
etc.etc.
• Hospitality, including room reservations, banquet &Hospitality, including room reservations, banquet &
conference facilities.conference facilities.
• Personal care productsPersonal care products
• Apparels, including branded clothing, etc.Apparels, including branded clothing, etc.
• Lifestyle products, including perfumes, etc.Lifestyle products, including perfumes, etc.
9. Barter – how does it work ?Barter – how does it work ?
CROSSTRADE
Rooms &
Restaurant passes
Appliances
Appliances
Ad space
Promotional
materials
Rooms &
Restaurant passes
Promotional
materials
Ad space
The above exhibit is for illustration purposes only. Products and services differ based on client requirements.
Publication
Appliance
manufacturer
Hotel
Gift
manufacturer
10. Benefits to partners from CrosstradeBenefits to partners from Crosstrade
• Fair trading practices in an authentic exchange,Fair trading practices in an authentic exchange,
• Transparent and organised transactions,Transparent and organised transactions,
• Maximising the product/service reach of each businessMaximising the product/service reach of each business
partner,partner,
• Facilitating the growth of each business partner throughFacilitating the growth of each business partner through
sales channelisation,sales channelisation,
• Professional account management,Professional account management,
• Building up of goodwill amongst the business partners,Building up of goodwill amongst the business partners,
• Commitment to national level partner servicing,Commitment to national level partner servicing,
• Large network of partners & product variety.Large network of partners & product variety.
11. How to start using our services?How to start using our services?
• Sign agreement provided to youSign agreement provided to you
• Provide list of products available for barter with rates andProvide list of products available for barter with rates and
quantitiesquantities
• Finalise requirements and issue P.O.Finalise requirements and issue P.O.
• Start bartering !!!Start bartering !!!
