Industrial Distribution

Industrial Distribution

Advanced Pricing and Trade Spend Management for Industrial Wholesale and Distribution

Some of the businesses involved in this sector appear at first to have very simple trade spend management requirements as they have a very limited product range and relatively few customers. But they may well be in a very competitive environment where pricing and volumes moved are king. Other companies in this sector however have very large numbers of products and customers, for example those perhaps selling electrical componentry and plumbing supplies. For these companies a key requirement is the ability to be able to group and categorize their products and customers to enable the effective management of their sales, trade and profitability.

Frequently this sector is a heavy user of Contract Pricing, where negotiations include quite complex quantity and value break based discounting.
In addition, various Rebate arrangements utilising multi-step quantity and value based breaks, but paid out periodically on a retrospective basis (e.g. monthly, quarterly, yearly) will often form part of contractual arrangements with customers. This means that accruing for the commitments that will only be paid for in a future period, is of major importance, as is an efficient means of researching and auditing the makeup of both the accruals and the eventual payments.