Wholesale Distributor Pricing ‘Must Haves’

Wholesale Distributor Pricing ‘Must Haves’

With the majority of distributors placing pricing power in the hands of the sales teams it is most important to provide the necessary structure to support price performance. Sales teams are in a unique situation to impact financial performance. Consider the three profit drivers: sales unit volume, price and cost. Sales teams can impact unit volume and price assuming that they have the authority to either set or adjust prices.

With this level of power consider how we are managing the sales force to achieve the highest price performance. Here are three key management tools to measure and control sales team pricing performance.

  •  Include a price performance requirement in the sales team job description. Raise the level of awareness on the importance of better pricing by stating it in job descriptions. Reps will know it is a key measure. And, after all, what gets measured gets managed.
  • Set price performance goals. Set a goal for each rep to achieve that is focused on price level attainment. Create a modest price increase goal that requires action by the rep. This too will raise the overall level of awareness of pricing performance.
  • Measure price performance. Create routine price performance measurements and reporting that provides feedback to the sales rep. Monthly, quarterly and annual reports send a strong message on the importance of strategic pricing.

These are the most fundamental tools to better pricing management through the sales team. However, we find few companies that take these important steps.

About the Author

Ralph Zuponcic

President, PricePoint Partners

Ralph is a national authority on strategic pricing. He has been featured in publications including The Wall Street Journal, Fortune Small Business, CFO Magazine and Marketing News.

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