Managing complex pricing

Maintaining profitability

Ensuring that every order remains profitable is the key to success in distribution, and managing complex pricing structures is one of the most difficult challenges facing distributors today. This situation is exacerbated by the fact that wholesalers and distributors typically have very complicated pricing and discounting models, so managing complex pricing may involve pricing by; multiple catalogues, according to catalogue and marketing campaigns, by matrix prices, multi-buys and a range of other discount types.

Managing margins

Successfully managing complex pricing can only really be achieved if the operator can see the margin and can then only negotiate within boundaries agreed by the managers of the business. This is especially important in cases where prices are negotiated so that specific customers are either given their own price list (which is typically standard price less a discount) or given a price list linked to a group of customers. Under these circumstances it’s clear that successfully managing complex pricing is essential.

Controlling negotiation

To add to the complexities of managing complex pricing, many distributors also give their sales staff the authority to negotiate price when the customer is on the phone, in which case the price on the price list can be over-ridden. These situations can result in the distributor having to handle many different price lists, which greatly adds to the difficulties of managing complex pricing and can make life difficult when new products are added or a price rise takes place.

Find out more about Maginus' Advanced Distribution Software, powered by Microsoft Dynamics AX and how customers such as Smeg UK, IDS and Inmans Electrical benefit from Maginus Multi Channel Solutions.