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Bartering on a large scale

As procurement, we often have to deal with payment issues. The vendor is following up on his payment. Finance is telling that sales still did not collect the funds, so they can’t do anything. And there we are, sitting in the middle.

How often did you think about paying the invoice for products or services your company is providing?

The Merriam-Webster dictionary defines Barter as:

“to trade by exchanging one commodity for another: to trade goods or services in exchange for other goods or services”

In my career I had a chance to witness a bartering exercise on a large scale that made all stakeholders very happy:

  1. Make wooden pallets and crates. Send to the vegetable farm
  2. Send the vegetables to the wholesaler. The wholesaler sells the goods to the shops
  3. Shops will return the pallets and crates to the wholesaler
  4. The wholesaler pays the 1st company: 

– in used pallets. They will be refurbished and reused or turned into heating wood for the factory

– in fruits and vegetables for the staff canteen

– in money, for the remaining dues

Everyone in this trade was very happy, as the money was safe. You could always take the goods in any of those steps and turn them into quick money if needed. And, if you look from an ESG perspective, it can be as well presented as a great example of a circular and sustainable Supply chain.

Now, how and where to start? Next time in a meeting with your vendor ask if they are aware of the products or services your company is offering. You may be surprised by the outcome of this discussion.

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