This is a form of countertrade where the principal supplies equipment to the customer at little or no charge and the customer ‘pays’ for the equipment by supplying the principal with the output of the equipment. An example might be a jeans company that buys and supplies knitting equipment to a supplier at no charge. The supplier uses the equipment to manufacture jeans that are then supplied back to the jeans company that on-sells the jeans. The jeans company may buy the jeans at a lower cost than if the supplier had bought the equipment themselves. This involves both barter and technology transfer. See also Countertrade.

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Discover the world’s largest Glossary of Procurement terms

With over 800 Procurement specific terms (and growing) you will find everything you need to know or thought you knew about the Procurement function. Our aim is to provide you with a comprehensive list collated from the Comprara Groups hub of training and consulting source materials.The Procurement Glossary has been compiled by industry expert Paul Rogers.