Streamlining Distribution Price List Updates with Pricefx

In today’s distribution landscape, businesses are challenged by factors like fluctuating demand, rising costs, inflationary forces beyond their control and market volatility. It is essential for distributors to stay agile and responsive to maintain competitiveness. Imagine if market prices are changing month , but your team is stuck in the mire of a two-month-long price list update process. It is like painting the Golden Gate or Brooklyn Bridge. By the time you have finished you have to start again, and when you started, the market has already shifted, and you are already behind, leaking margin as you go. If that sounds familiar, your organization is already struggling to swiftly adjust price lists in response to supplier cost changes or pricing strategy adjustments. It is time to explore Pricefx’s streamlined pricelist update approach.

At Pricefx, we have spent the last decade and more assisting our friends and customers in in the distribution industry set automated and real-time customer-specific price list processes, optimize their pricing strategies and overall, become more profitable and future-proofed businesses.

In this article, we will examine how at Pricefx we how we enable quick calculations and the publication of new price lists based on supplier cost changes or changes to pricing strategy, empowering distributors to navigate market fluctuations with ease and be more profitable.

Unlocking Growth in Distribution: The Pricefx Superpower of Swift Pricing Adjustments

Whether prompted by changes in market conditions, shifts in overall business strategy, or fluctuations in supplier costs, the ability to swiftly implement pricing changes is paramount, particularly in multifaceted business sectors like distribution. However, the challenge lies in the frequency and complexity of these changes, which can occur daily, weekly, or monthly across diverse market segments and applying a system that can go ahead with automated price list updates as often as your organization requires them.

Navigating Pricing Complexity with Pricefx

The intricacy of recalculating and communicating these updates in a timely manner poses significant challenges for distributors. However, Pricefx offers a robust capability that enables real-time pricing updates triggered by new input variables and recalculation logic. This capability seamlessly integrates with existing ERP (Enterprise Resource Planning) systems, ensuring an efficient loopback mechanism for accurate pricing implementation.

The Benefits of Agile Pricing with Pricefx

With Pricefx’s solutions, distributors experience substantial benefits, including increased margins through more frequent and faster price updates. This approach addresses the challenge of margin compression by reducing manual errors and ensuring timely pricing adjustments.

Key performance indicators (KPIs) for success lie in margin improvement and enhanced price realization resulting from more frequent and agile pricing changes.

Important Note on the Following Michelin Mini-Case Study

 

While it is important to note that while of course Michelin is a manufacturing company, the time-saving benefits of Pricefx’s price list update technology extend far beyond manufacturing to distribution companies (or indeed chemical or other industry sectors) as well.

 

Whether a company needs to update price lists more frequently due to market dynamics or other factors, Pricefx’s adaptable technology caters to customized business requirements and your required price list update cadence.

 

This flexibility ensures that businesses across various sectors (including distribution) can leverage Pricefx’s innovative pricing solutions to streamline operations, enhance efficiency, and drive profitability.

Mini-Case study: Michelin, a leading European tire manufacturer, approached Pricefx with a pressing challenge: keeping pace with rapidly increasing costs of raw materials like rubber, steel, and carbon black. Struggling to track these fluctuations, Michelin found their pricing updates taking up to 2 months, causing profit margins to erode amidst escalating prices. Seeking a solution, Michelin turned to Pricefx for assistance.

With Pricefx’s Price Setting functionality, Michelin experienced a dramatic transformation, reducing their price list recalculation time from 2 months to just 20 minutes.

This remarkable timesaving enabled Michelin to efficiently set, manage, and optimize prices across their entire product portfolio, streamlining complex pricing activities in a single platform. By leveraging Pricefx’s price-setting and optimization tools, Michelin maximized their pricing strategy effectiveness while minimizing margin leakage, resulting in a significant increase in bottom-line profit.

What that also meant for Michelin with those kind of time savings, their pricing teams could be repurposed to go and discover additional pockets of value. Instead of preparing price lists for 2 months, Michelin’s pricing team went out and discovered other points of value for 2 months. So, during that time, they went about discovering approximately 1 million euros worth of value from underpriced products – additions to their bottom line they never knew they had.

Embracing the Formula for Success with Pricefx

The formula for success is straightforward: Margin improvement equals the new margin minus the old margin.

By embracing Pricefx’s innovative solutions, distributors can protect their margins and capitalize on revenue opportunities in a rapidly evolving market like never before.

Bridging the Gap Between Expectation and Reality with Pricefx

In the pursuit of maintaining or surpassing planned gross margins, distributors often face challenges stemming from dynamic factors such as supplier cost increases, transportation constraints, and supply and demand imbalances.

Pricefx addresses these challenges by providing distributors with the ability to evaluate options for price changes swiftly and simulate the impact of mass price changes across various dimensions like product, customer segment, and geography.

View The Impacts of Your Price List Updates Before They Occur with Pricefx – Price List Impact Simulation

Pricefx’s Price List Impact Simulation feature, a powerful tool that allows distribution businesses to assess the potential impact of price list updates before their implementation. This feature offers a comprehensive simulation, considering all elements of the related price waterfall, including special price agreements. By providing a visual comparison between the current status quo and the simulated scenario, along with relevant calculation outputs, businesses can effectively evaluate the intended changes.

Let’s delve into an illustrative example to understand how this feature works. Suppose we have an existing price list that we want to update, either by manually adjusting prices for selected products or by applying more sophisticated updates such as changing the price strategy or modifying attributes like the minimal required margin. Once the update is completed, the Price List Impact Simulation feature allows us to simulate the impact of these changes.

Before initiating the simulation, users can apply additional filters such as historical transaction data or specific sales territories to enhance the relevance of the simulation results. Once the simulation is complete, users are presented with an executive summary of the business impact, complemented by a visual comparison between the simulated scenario and the current status quo. This comparison includes various views on revenue and margin, providing insights into how the changes impact different elements of the overall price waterfall. Detailed calculation outputs per product, customer, or their combination further enrich the visual comparison, empowering users to make informed decisions on price changes before they are implemented in the market.

The Price List Impact Simulation feature is available for both price lists and live price grids, enabling businesses to anticipate and understand the consequences of price adjustments thoroughly.

By leveraging this feature, distributors can make proactive decisions that align with their strategic objectives and drive positive outcomes in the market.

Unlocking Multifaceted Benefits for Your Distribution Business with Pricefx

Now you have seen that Pricefx’s solutions encompass improved margins through frequent and strategic price revisions, reduced margin compression by minimizing manual errors and ensuring timely pricing updates, and increased margin with decision support and simulation capacity.

If you would like to discover a diverse range of methods (other than streamlining your price list management) to give your distribution company the revenue bump you have been looking for, check out my recent article below to learn more:

Meanwhile, Happy Distribution Pricing!