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Curtail Price Overrides with epaCUBE Margin Manager

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Case Study from an epaCUBE Margin Manager User

Rusty Wells, State Electric

A two- or three-point improvement in gross profit can translate into a significant increase in sales and net income, as shown  by State Electric Supply Co..

When the firm installed epaCUBE Margin Manager to find opportunities for margin improvement, management realized that account representatives were overriding customer prices on about 20% of sales, said Rusty Wellsof State Electric.

That mattered, because the company’s price matrix already incorporated discounts or special prices negotiated with individual customers.

“Until now we didn’t have the ability to get tough on the order-writers for overriding matrix price, and sometimes we have contract pricing set up to meet competitive situations for a limited time,” Wells said. Without visibility to the detailed information behind a published price, account managers might have sold below cost, or missed opportunities for higher margins.

Within six months of installing Margin Manager, Wells said, the company cut overrides by 40%; reduced customer invoicing errors, and improved sales, margins, and customer service. “If your bottom line is 2%, and you increase your margin by only one point without changing your overhead, you’ve just improved your bottom line by 50%,” said Gary Stone, president and CEO of epaCUBE. “That’s huge!”

Wells stated, “the president of State Electric is very happy.”

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About the Author:

Randy Hughes is Vice President of Sales and Marketing at epaCUBE (a leading supplier of pricing optimization, gross margin modeling and product data synchronization & cleansing software to the supply chain). Mr. Hughes has spent the last 25 years developing and marketing technology solutions for various aspects of automating the supply chain.

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