Corporate barter works because the barter firm sells to its clients what it bought using futures contracts—that is, made forward investments in widely used goods and services. In other words, it engaged in successful “arbitrage”—taking advantage of a difference in the price of a commodity over time.

The farther into the future you buy something, the less you have to pay for it, generally speaking. Corollary: the closer to the present you buy something, the more likely you will pay the going price, the fair market value. In a nutshell, this is why corporate barter firms can pay clients two to three times fair market value for an asset and provide them with fulfillment at a price they typically pay, and yet still turn a profit.

The common thread among the investments used for corporate barter is the perishability of these commodities. Their industries have excess capacity from time to time, perhaps as the very nature of their business model. It tends to be built in as a kind of cushion, because if companies in these industries ever lack capacity, the cost can be severe—particularly when the cost is new competition.

Industries in which barter firms typically buy futures are broadcast media (radio and television), publishing companies (magazine and newspaper ad pages), hotel chains (rooms), printers (press time), and trucking firms (cargo space). Their inventories are indeed perishable: Once a product’s “sell date” has passed, its value literally drops to zero. Some other industries that routinely have excess capacity include waste management, water treatment and a variety of corporate services. These are also feasible for corporate barter. All of these industries have pliable inventories, and it is easy for their companies to accept that their products and services can be used as a financing tool. After all, once their costs are covered, any additional sales are pure profit for them.

Such businesses are often described as high fixed cost, low variable cost: a high fixed cost to enter the business as a bona fide player; a low variable cost to do business, such as selling radio spots or room nights or print runs. Everything is in place to deliver the service: what these businesses are potentially short of is customers, up to their capacity to serve them.

When a corporate-barter firm engages in arbitrage in these perishable commodities, the profit its makes reselling them later at current market price is the leverage it uses to buy underperforming assets. Why this all works is that, in effect, the barter firm passes on much of its arbitrage profit to its clients.