QuickTake: Pricing for Digital Commerce - Modern Distribution Management

Log In

QuickTake: Pricing for Digital Commerce

One of the biggest factors limiting the success of B2B distributor eCommerce is pricing. James Dorn looks at pricing strategy and two schools of thought on how distributors look at the ROI equation for their eCommerce revenue.

Distributors are investing millions of dollars into eCommerce websites, but are they realizing a return on their investment? Accurate pricing could make all the difference.

In the latest QuickTake podcast with MDM CEO Tom Gale, James Dorn of Dorn Group broke down how distributors look at attribution for eCommerce investment into two schools of thought. 

Distributors generally view the eCommerce business in one of two ways:

  • Omnichannel: Distributors view eCommerce as part of a larger corporate omnichannel strategy allowing customers to place orders in a variety of ways.
  • Stand-alone channel: Distributors critically measure the revenue and profit generated from eCommerce alone to ensure ROI exceeds the investment.
James Dorn

In the omnichannel school of thought, distributors focus on revenue growth of all channels combined. In the single channel view, “they’re treating [eCommerce] as simply another revenue channel that’s competing with their other revenue channels,” such as branch, field or inside sales, said Dorn, President and CEO of Dorn Group, a strategic advisory for manufacturers and distributors.

Managing an eCommerce channel as part of a larger omnichannel strategy could mean missing out on critical information about your eCommerce pricing, he added.

“Somebody might start their search for a product on the website and then they find out that the pricing is wrong. So they call their account manager, and they place the order,” Dorn explains.

While distributors still win by getting the order, there is a loss of ROI on the eCommerce website. Accurate pricing at the customer level could increase this ROI by “simply capturing that order and converting that customer,” Dorn adds. 

The Art and Science of eCommerce Pricing Strategy for Distributors

While pricing at the distribution level across all channels is one of the most complex things about the business, Dorn said working toward pricing accurately is critical. Prices on eCommerce websites should be accurate enough that customers don’t need to pick up the phone and place an order through an associate.

His key advice for implementing a successful pricing strategy is to establish segments of customers and then apply custom pricing structures to those segments based on buying trends.

“That way, everybody in the organization can have confidence that this customer is always getting the right price based on the agreements that you have in place,” Dorn said.

He adds: “Make sure you’re using these pricing strategies to help you effectively not only grow revenue, but also reduce the cost to serve your customers, thereby increasing your profitability.”

Listen to the full podcast episode via the audio player above, and check out our full library of MDM Podcasts here.

Related Posts

Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!


articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events



You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.