Today I would like to talk about a topic which is often underestimated by those who distribute products at retail that is concerned with the pricing policy of your company.
But first, let’s take a small step back.
Indeed, to make sure that the final sales price reflects the value of your products and strengthens your brand, in addition to clearly defining your positioning and creating the brand strategy, you have identified which distribution channels to use.
Everything seems perfect, but in addition to these first three steps, it is necessary to add another, a fundamental one.
As a supplier, you have the task of developing a strategy that considers not only your company’s costs to go-to-market but also those that are in charge of the whole supply chain.
The channels pricing that is establishing a correct pricing policy specific to each channel used is, however, one of the less understood and more complex aspects of a manufacturer’s go-to-market strategy.
In fact, to develop an effective strategy, it is necessary to establish price levels for the various customer segments, and also, to the multiple channels that serve each segment.
To make this situation more complicated, there are other factors to consider, such as the “power” of some channels, conflicts and competitions between the channels themselves.
In short, a real dilemma.
Given this complexity, it is not surprising that many manufacturers simply copy the programs of their competitors or remain paralyzed by indecision.
In fact, some companies offer discounts on discounts without any basic logic, destroying the already fragile trade balance of the sector.
Surely you too will have competitors who, not having a global strategy, reduce the profitability of other customers with waves of special offers.
These companies, without a well-considered strategy, are subjected to the continuous erosion of margins and the dissipation of their value, both for their resellers and towards final customers.
The only solution to this “incorrect” way of doing business is to take a leadership position and protect one’s profits, and those of the entire supply chain as well.
Furthermore, as you well know, a leadership position reduces operating costs, improves customer satisfaction and accelerates growth.
If your company does not practice the prices correctly towards the channel, you will only have unsatisfied retailers, and you will never fully realize the value of your offer.
In other words, Channel Pricing determines whether your distributors, retailers or other channels will focus on your brand, or on the contrary, look for alternatives.
But be careful, don’t do like the most of the producers who think that channel prices are little more than volume discounts or sales incentives.
A correct strategy requires additional interventions that motivate them to sell your products. To sell them larger quantities and with better margins.
It does not matter if you have not been able to support the supply chain as you would have liked. I know, it is not an easy thing, and you probably got stuck in front of the economic and organizational resources you assume to be necessary.
Regarding this point, I fully agree with you. Still, if you have a company that believes that leadership, innovation and customer satisfaction are the pillars on which basing the success and the achievement of a company, I am really pleased to get you to learn about a system that will help your business.
It is called “More Sales with No Hassles”, and it is the system that I created specifically for companies that distribute their retail products and want to become true market leaders.
If you want to learn more about the subject, here is the link, where I hope you can find what you were looking for to secure your company – and your job – from the pounding attack of hardened competitors.