Commentary: Use Strategic Pricing to Boost Profitability
Does a 3 percent to 4 percent increase in margins get your attention? Tim Reynolds argues that we will be seeing more about strategic pricing. In a sense, it has to happen. Distributors have to get more strategic about pricing and managing the sales force to compete with the pressures today.
The article notes a fundamental practice at most distribution companies that consistently shaves profitability points. While management sets discounting guidelines, day-to-day pricing decisions are often in the hands of sales. Do you have any savvy customers who funnel orders to their "favorite" salesperson who they discovered consistently quotes the lowest price in your company? What does that cost?
More importantly, some larger distributors have built sophisticated tools ...