Why Distribution CEOs Need to Worry
The primary objective for CEOs and owners of distribution companies is to drive shareholder value through consistent growth in profitability. While all aspects of the company play a role in profits, three functional areas have the greatest impact:
Your product and procurement experts need to understand demand and unique market requirements;
Your sales and service teams focus on maximizing revenue by winning new clients and keeping current clients from leaving to buy from a competitor;
Your finance team seeks to efficiently generate profit across the board to improve value and access to capital.
The largest common driver in these three areas is pricing.
Pricing can influence your share of wallet with each client and is probably the most significant driver in your customer relationship. Optimizing pricing can have a 2% to 4% impact on your overall gross profit. But who is in charge of pricing in your organization? Are you certain that all of your teams are mutually accountable for optimizing pricing decision and activities?
The most successful distribution leaders realize that methodical, data-based and consistent strategic pricing is the key to build a consistent and repeatable cross-functional core competency to effectively set prices, capture market demand and maximize gross profit. The leading distribution organizations know precisely what the right price is for a certain customer buying a certain product at a point in time; there is no guesswork involved. Driving shareholder value requires you to develop an optimal pricing strategy, implement effective pricing processes, measure and control pricing and aligning your technology with your pricing strategy.
That’s where epaCUBE comes in.
epaCUBE helps you create new gross profit gains from a single profit optimization dashboard. You can leverage embedded industry best practices, easily and instantly visualize opportunities for gross profit improvement through optimized pricing, validate and adjust the optimized recommendations based on your knowledge of your business, see a what-if impact of analysis of all optimized pricing changes and analyze the effect of a vendor cost change.
We’ve taken industry best practices, input from distribution veterans as well as the top-performing strategies used by hundreds of epaCUBE users to identify new pricing opportunities for gross profit improvement. This means your team doesn’t even need to know exactly what to look for in order to begin because running epaCUBE is like having the world’s smartest pricing expert at your fingertips every hour of every day.