In no other sector does pricing so significantly affect profits as it does in the distributor sector. A price improvement of only 0.5% has the potential to boost a distributor’s profits by an average of 50%. Utilizing our extensive international project experience, Simon-Kucher supports distributors and wholesalers to grow profitably. Our analytical methods and solutions that were developed specifically for this industry, assist our clients to gain a margin improvement of one to three percentage points. Especially taking into account the typical high transactional volumes involving millions of both products and customers.
Typical challenges we encounter are historically grown price structures, strong cost focus instead of value to the customer, price setting based on gut-feeling and limited insights in profitability and price realization. Many wholesalers are undergoing a difficult phase. Rising competition and increasing price transparency put already low margins under additional pressure. Products and services often lack competitive advantages – it's just too easy to compare offers nowadays. What's more, physical proximity to the customer is becoming less important with rising online trade. At the same time, manufacturers are trying to reach out to customers directly using new media.
Customers are changing, too: They are becoming more aggressive and price-savvy buyers and their expectations and requirements are growing. Wholesalers have to offer the broadest assortment, deliver at any time and accept longer payment terms – all at the lowest price!
The Simon-Kucher experts know the challenges of your industry. Benefit from our innovative and implementable solutions.
Typical solutions include the following (non-exhaustive): Pricing strategy
- Assortment strategy
- Price positioning and sales push of private label brands
- Needs-based customer segmentation and price differentiation
- Fair price image
- Product (list) price optimization
- Communicating and pricing the service portfolio
- Performance-oriented discount systems
- Target price systems in standard and project business
- Tender management
- KPIs and monitoring dashboard
- Price recommendation tooling
- Peer pricing
- Alliance Healthcare
- Andrew Page
- Cardinal Health
- DT Group
- Kemmler Baustoffe