Pricing Strategy

Are you seeing revenue climb while margins get squeezed? Your distribution business is likely caught in the “Portfolio Trap,” where high-volume but unprofitable SKUs secretly drain your bottom line. This article diagnoses the problem, revealing how a lack of granular data and reliance on outdated pricing models hide the true costs eroding your profits. Discover how to fix this by focusing on SKU profitability, enabling you to identify and manage these hidden drags to drive real financial growth.

Many businesses unknowingly lose significant profit through complex discounts and a failure to base prices on customer value, a phenomenon known as the “Leaky Pricing Waterfall.”

A mere 1% improvement in price realization can increase operating profit by a median of 6.4%, yet most companies only achieve half of their planned price increases. By building an in-house capability with a causal data foundation and a price customization framework, companies can transform this profit leakage into a powerful engine for growth.