Fluctuating costs, varying customer agreements and sales rep autonomy often result in inconsistencies in pricing that affect profitability.
Many distributors also still rely on an incomplete view of their pricing data, which makes it difficult to identify patterns and optimize pricing strategies. This is especially important today as distributors fight to outpace inflation and plan for tariff-inflicted cost increases.
Without visibility into how decisions are made at the invoice level, distributors struggle to identify where they are leaving money on the table. Building an enriched, augmented pricing data repository can add depth and context to traditional pricing data. It gives distributors a more comprehensive view of pricing behavior, margin performance and customers’ buying behavior.
Distributors’ Pricing Challenges
One of distributors’ biggest challenges is lack of visibility into how prices are determined at the transaction level. Many companies rely on data that capture basic invoice details. This makes it harder to analyze trends and identify where margin leakage occurs. It also makes it harder to ensure consistency across channels.
Sales teams also often have significant pricing autonomy, which can lead to inconsistency in discounting practices that erode profitability. Other challenges include data silos across different departments, which makes it hard to see the big picture.
As a result, distributors are reacting to margin pressures rather than proactively optimizing their pricing for the market.
Enriching Distributors’ Pricing Data Through Data Engineering
Most distributors collect and store basic system pricing data. Our team uses data engineering to go beyond standard invoice line-item details and give distributors attributes that provide deeper insights into pricing decisions.
Instead of focusing on just the final price and margin, enriched pricing data captures pricing type – whether the price came from system-generated matrix pricing, customer contracts or manual overrides. Beyond pricing type, enriched data can give distributors insight into the impact of rebates on an invoice level. Distributors can use enriched pricing data to see how they compare to their peer group.
Data engineering also allows distributors to structure the data into quartiles or indexes to get a better understanding of where sales teams may be underpricing or overriding system prices too frequently.
This granularity allows distributors to move beyond averages and instead develop pricing strategies based on specific customer, product and transaction-level insights.
For one distributor, we ingested unstructured data and used AI to digitize and attribute more than 40,000 contracts. This allowed us to build rules that now empower the client to outpace inflation.
Read more: Expanding Your Margin Through Pricing Optimization
Benefits of Enriched Pricing Data for Distributors
Enriched pricing data empowers distributors to optimize their pricing strategies and protect their margins – no matter the environment.
For example, you can look at the pricing type data to see how your mix is affecting your margins.
Benefits include:
Greater Pricing Accuracy and Control
Identify areas where manual overrides happen too frequently … or not enough. You can also identify when sales teams are offering unnecessarily deep discounts.
Stronger Margin Protection
Identify where pricing can be optimized without losing business and understand where rebate structures affect final margins.
A Better Customer Experience
Enriched pricing data enables sales teams to provide faster, more accurate quotes and reduce the friction that often comes with complex pricing negotiations.
With better insights, sales teams can price more intelligently and confidently. If an individual rep is off the mark, you can provide personalized coaching. If there are more pervasive issues, you can begin overhauling the way you train reps and measure their results.
Improved Decision-Making
With deeper insights into rebate impacts, price sensitivity by product and customer segment, and real-time pricing benchmarks internally and externally, distributors can move beyond reactive pricing strategies and proactively adjust to the market.
Enrich Your Data with ProfitOptics
At ProfitOptics, our experienced data engineering team can build a data warehouse of enriched pricing data separate from your company’s main data environment, where it would have to compete for resources and risk getting lost in the weeds.
With a clean structure, you’re better able to leverage your enriched data for analysis. But we’re not just in the business of building something and dusting off our hands – we collaborate with distributors to ensure that they get the most out of it. We don’t drop a massive, overly complex dashboard in your lap; we point you towards the information you need to know and provide expert guidance on how to use it.
To learn more about how we can help you engineer a robust system of enriched pricing data and analysis, contact us today.
