Using special pricing agreements to increase your profit margins | Enable

▤ Summary

‍US based research has found that software dedicated to tracking, remittance, and attribution of vendor monies is a significant factor in the sales success with special pricing agreements. In the bracketed differential, there is a 6.1% difference in cost of goods sold between top and below average special pricing agreement performance. This includes type of competitive situation, size of the order, segment of customers, competitors, and a host of other market variables that, if analyzed, can help management control their usage for greater sales success. We found no difference in special pricing agreement performance for distributors who said they “measured and managed funds carefully” versus those who “. . .have no overall strategy for their use.” However, we found a significant difference in special pricing agreement performance, as a percent of cost of goods sold, for firms based on their tracking/remittance systems. Our review of tracking/remittance software is not part of our research, however, specialized bolt-on software in distribution is growing and has distinct advantages including: 1) Centralize processes for quality, through-put, and improved financial performance 2) Create a repository of transactions for analysis and managerial action 3) Increase visibility across the supply chain for better negotiation and internal usage of available funds.

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$50M to $100M