Sitting between manufacturers on one side and wholesalers and retailers on the other, distributors can often get squeezed. Leveraging our fusion of technological capabilities and expertise, INSIGHT2PROFIT works with distributors to reduce losses and maximize profits in a number of ways.
You might sell the same product to hundreds of customers, but those customers value that product differently. Factors like customer industry and location, lead time, order size and patterns, and product application all impact the price sensitivity (or lack thereof) of your customers. INSIGHT can help you uncover how much value a certain product or even a particular order offers your various customers and set target prices and margins for each situation using micro-segmentation based pricing.
Many distributors view a price increase as a pass-through – when their costs rise or a new tariff is imposed, they institute a flat increase across the board to maintain profitability. The problem with this approach is twofold: 1. Passing along an exact increase makes your cost structure transparent to any customer who cares to do the math, and 2. Not all your products and customers are equal – while a 5% increase might be appropriate in one situation, it could be too low in another instance and too high in yet another. INSIGHT’s data-driven approach to pricing allows your business to anticipate potential cost increases and to have a process in place to determine the right price for each customer, product and order as market dynamics shift.
Freight is a major cost driver for distributors, and a highly dynamic one at that, and it can be difficult for distributors to match their freight costs to their freight revenue. INSIGHT can provide visibility into your freight margins at the invoice level, identifying instances in which you’ve priced freight so low that you lost money, or orders where you’ve priced freight so high that you risk becoming non-competitive. Once we can measure the impact freight is having on your profitability, we can work to improve it. INSIGHT helps distributors put processes in place to ensure you not only recover your costs but also profit on freight.