Buyback

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.