Pricing Optimization: Striking the Right Balance for Margin Advantage
Pradip Krishnadevarajan, Senthil Gunasekaran, F. Barry Lawrence, Ph.D., Brijesh Rao
- *Quantity discounts:
- 2-15 items: 15%
- 16-30 items: 20%
- 31-100 items: 30%
- 101-250 items: 40%
- 251+ items: 50%
Listen to Barry Lawrence of Texas A&M University discuss a critical issue in wholesale distribution today: Pricing Optimization.
Forward-thinking wholesaler-distributors who strive for above-average returns in the “New Normal” by leveraging pricing optimization best practices that are rooted in sound analytics must read Pricing Optimization: Striking the Right Balance for Margin Advantage!
The time has come for distributors to address their concerns about shrinking margins by upping their game on pricing decisions. If distributors keep doing more with less, they’ll soon find themselves doing everything with nothing! The issue of margin erosion will never end if distributors do not get creative—first with their pricing methods, and second with their value proposition. Issues involving pricing methods are more critical to profitability and so should be tackled right away.
For many distributors, pricing decisions are completely left to individual salespeople to do in their own way. Allowing this kind of flexibility is a distributor’s weakness. Pricing is already quite complex, and inconsistency will only increase complexity and will lead to chaos. Here lies the crux of problem. The solution to this dilemma lies in “complexity management”—providing structure with fewer variables, and “consistency”—doing things the same way every time. This comprehensive study will help you achieve the right pricing solution for your business!
Pricing Optimization is jam-packed with
9 best practices from actual wholesaler-distributors
40 action steps that your firm can implement immediately
73 examples from wholesaler-distributors across many lines of trade!
This book is a collaboration of the NAW Institute and Texas A&M, two leaders in wholesale distribution education and training.
Save 15% when you order together with these other best sellers from the authors at Texas A&M: Sales and Marketing Optimization: Developing Competitive Value Propositions in Distribution, Customer Stratification: Best Practices for Boosting Profitability, and Optimizing Distributor Profitability: Best Practices to a Stronger Bottom Line.
Read Extended Description »
What Readers Have to Say
- "Given the complexity of pricing, it is impossible for a salesperson to mentally juggle all the relevant elements of a pricing decisionósuch as customer segment information, product visibility for the branch and for the customer, historical pricing, target prices, etc. This Pricing Optimization study has gone a long way to specifying these elements and, more importantly, putting them into terms that can be quantified and managed. If you want to be profitable in a competitive market, you must understand where and when you can optimize your pricing. You canít pull your numbers from thin air. This book can help you understand the variables and the math of distribution pricing. Donít get on the phone without reading this study!"
- — Lawrence Mohr, Senior Vice President (retired), F.W. Webb Company
- "This Pricing Optimization study has been an invaluable tool for highlighting opportunities to improve margins. Implementing the principles in a pilot location raised gross margins by over 3% in less than a year. It has been an eye-opening experience for those salespeople using the cost-plus method for determining sales price."
- — Kevin Martin, Vice President of Operations, Pipeline Packaging
- "This Pricing Optimization study brings a unique blend of methodical analytics and real-world experience to pricing optimization. The process is engaging and very well organized. This work is a true partnership between industry and research."
- — Kevin Kampe, President, Womack Machine Supply
After reading Pricing Optimization: Striking the Right Balance for Margin Advantage, you’ll be able to
- adopt a practical—yet scientific and simple—framework
- bring a ”new science” to the “abstract art of pricing”
- choose the key variables that should drive your pricing decisions
- deploy existing and readily available information from your IT systems
- expand your customer stratification results for optimal pricing
- fulfill margin goals systematically
- give meaningful and concise information to your sales force so you can optimize margins
- hit gross margin improvements of 150 basis points or higher within months
- implement pricing best practices with minimal resources for a higher ROI!
About the Authors
Pradip Krishnadevarajaninfo page
Pradip is the co-founder and research lead at the Global Supply Chain Lab at Texas A&M University. As an industry adviser and business manager, he assists distributors across diverse channels with best practices, business decisions, and education. He is an author of five books on quantifying the value of distribution, profitability, and best practices.
Senthil Gunasekaraninfo page
Senthil leads research on the wholesale distribution industry at the the Global Supply Chain Lab at Texas A&M University. Experienced across multiple lines of trade, he designs and directs industry projects and consortia focused on identifying and implementing best practices for wholesaler-distributors. He is an author of four books on distributor profitability and growth and an APICS Certified Supply Chain Professional.
F. Barry Lawrence, Ph.D.info page
Barry is Director of the Industrial Distribution Program and the Global Supply Chain Lab at Texas A&M University. He is a Fellow of the NAW Institute for Distribution Excellence and an author of seven books on distributor competitiveness. Barry serves as an adviser to the distribution channel on supply chain management, and is a frequent speaker for distribution associations, buying groups, and companies on a wide range of supply chain topics.
Brijesh Raoinfo page
Brijesh is a leading operations research professional with 10 years of experience in helping distributors improve processes, optimize operations, and increase margins. From 2004 to 2009, he was a technical lead for several industry projects at the Global Supply Chain Laboratory at Texas A&M University. He played a key development role in the pricing optimization research consortium.
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.
Order Softcover Books or E-Books!
- INNOVATE! How Successful Distributors Lead Change in Disruptive Times Find out more »
- Facing the Forces of Change®: Reimagining Distribution in a Connected World Find out more »
- Getting the Most Out of CRM: Best Practices for Wholesaler-Distributors Find out more »
- 5 Fundamentals for the Wholesale Distribution Branch Manager, Second EditionFind out more »