Why Should You Consider Enhancing Your Segmentation Strategy?

Why Should You Consider Enhancing Your Segmentation Strategy? In analyzing the business of hundreds of distribution companies, we’ve found that most distributors rely on very simple segmentation. Some companies even operate without any segmentation, flying blind hoping to come out at a reasonable price based solely on their own instincts and their ability to muscle…

Distribution Customer Segments

In Distribution, Better Segments Lead to Higher Margins

In Distribution, Better Segments Lead to Higher Margins Optimized pricing is one of the best—and often untapped—sources of profit optimization for a distributor. And few strategies can improve pricing in the distribution industry as well as precise, effective application of segmentation principles. In fact, many distributors are adding two to four points of gross margin…

Distribution Pricing is More Complex Than Retail Pricing

Distribution Pricing is More Complex Than Retail Pricing The approach that many experts take to pricing optimization is based on the worlds of retail and manufacturing. Unfortunately, retail pricing is much less complex than distribution pricing. In retail, there is a fairly consistent linear relationship between volume and margin. If I lower my prices, I’m…

What are the Top (3) Organizational or Operational Issues when implementing a Price Optimization Strategy?

#1: Data: The Achilles Heel of Price Optimization Projects… One of the critical ingredients and perhaps the “Achilles Heel” of a price optimization project is the accuracy and completeness (in that order) of the underlying data supporting the effort. I put accuracy before completeness as companies often start with a sub-set of data and focus…