[Modern Distribution Management] The Power of Strategic Pricing in Industrial Distribution
By Modern Distribution Management
Apr 11, 2023
Zilliant SVP of Products & Science Pete Eppele advises on how to re-consider cost-plus pricing models, examine customer-specific pricing, and reduce over-discounting.
Industrial products distributors have faced significant challenges in recent years: spikes in demand, inflation and supply chain bottlenecks have each wreaked havoc. In 2023 a new challenge is emerging: downward pricing pressure as the construction market cools and wholesale price inflation slows.
Consider this quote from Webb Analytics President Craig Webb from a recent episode of the B2B Reimagined podcast focused on the 2023 forecast for building materials and construction: “The topline matters a lot less in stagflation or recession than the bottom line. It’s in your interest to do every little minimal thing you can that gets you an extra penny here or an extra dime there.”
Taking a thoughtful look at the impact that pricing strategies have on the bottom line will be critical during the rest of 2023 and beyond. Industrial distributors should re-consider cost-plus pricing models, look closely at how much of their system pricing is customer-specific, and reduce over-discounting in the field by providing optimized discount guidance. Let’s dig in.
Ditch the Cost-Plus Pricing Model