Strategic Pricing for Distributors: Tools and Rules for Building Higher Margins
Brent R. Grover
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Experience shows that most distributors are leaving at least two percentage points of gross trading margin on the table. This translates into 2% of total sales. Many companies can ultimately achieve more. The improvement is attainable fairly quickly and has proven to be sustainable. Two percent is the difference between mediocre profit results and stellar performance!
For many well-run distributors—those with a good handle on sales growth, expenses, and assets—gaining control over pricing is truly their last “unplowed field.” This book by Brent Grover is a combination of business novel and guidebook with real-world lessons for distribution managers. It will show you how to gain control over your pricing function and turn your customer value proposition into value for your shareholders.
Save 15% when you order together with this other best seller by Brent Grover: In Search of the Perfect Customer: Cost-to-Serve for Distributors.
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What Readers Have to Say
- "I can't put this book down!"
- — Carlos Portillo, Manager, Sales and Pricing Analytics, Hirsch Pipe & Supply Co. Inc.
- "How timely this work is given the background circumstances in the economy! Margin generation will be the number one issue for all distributors during this downturn, as volume increases become harder to achieve. In reading the novel in part I, I was able to draw relevant analogies to my own business and experience, thus increasing the impact of this book. The guidelines in part II served to pull it all together for me."
- — Mark Kramer, President and CEO, Laird Plastics
- "I think this strategic pricing book is very effective. I am sure its readers will be excited to become more proactive about developing a solid pricing strategy."
- — Andre Lacy, Chairman, LDI Ltd
- "I really enjoyed Brent Grover’s approach with both the novel and the guidebook. It’s a real “how-to” book on strategic pricing. The novel not only addressed pricing concepts, but also covered leadership issues as well. It was a FUN read!"
- — Deborah Hamlin, Executive Director, The Irrigation Association
- "I just finished reading Strategic Pricing for Distributors and wanted to thank you for a great book! My company is a cut flower wholesaler/exporter in Australia, and we recently started out on a strategic pricing journey (after 19 years in business and working on a cost plus model). In 2007, we mapped out a 3-year business plan that included a mix of turnover and gross profit objectives. We achieved our turnover target 1 year ahead of schedule courtesy of a trade acquisition, and this year, our focus is on finding the extra 2% gross margin to hit our target. I am working with a pricing consultant, and your book reinforced a lot of our preliminary work on segmenting clients and products. In a short space of time on one of our high-volume products, we added 1% gross margin, which is heartening."
- — Adrian Parsons, Wafex Melbourne
This book can be a real game-changer for you and your wholesale distribution business.
This is a time of economic turbulence and great uncertainly for all businesses, including, of course, wholesaler-distributors. Companies are focused on the short term, and the number-one priority for most leaders right now is to preserve cash and avoid risk. Brent Grover would argue that this is an obvious time to strengthen margin percentages. It may seem like an easier time to build margins when prices are rising rather than falling; however, many distributors actually saw margins slipping when they failed to pass along cost increases from their suppliers.
Today, in some lines of trade, margins are being hammered by inventory losses caused by falling commodity prices. Wholesaler-distributors, unable to generate sales increases in a weak economy, need to “play the cards they have” wisely. Another 200 or more basis points of margin may be just what many distribution managers need to stay profitable and preserve their companies until the economy again is strong. Seize the opportunity that this current economic climate provides, and use this book with your management team to implement a high-impact and sustainable strategic pricing system for your company.
About the Author
Brent R. Groverinfo page
Brent is Managing Partner of Evergreen Consulting, LLC and a Fellow of the NAW Institute for Distribution Excellence. He serves as an adviser to the distribution channel on strategic planning, mergers and acquisitions, and profit improvement. He also serves as a director of several companies and is a popular speaker at wholesale distribution industry gatherings.
Why NAW Institute Publications Are Different
NAW Institute for Distribution Excellence conducts research into strategic management issues affecting the wholesale distribution industry. Our research is conducted with best practice wholesaler-distributors, and we publish leading-edge research studies with practical application for wholesale distribution firms of all sizes and across all lines of trade.
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