Better times are on the way. Will you be ready to take advantage? There’s no shortage of where to focus…how do you decide what comes first?
We’d suggest you prioritize your actions based on:
- What will be the impact on 2020-2021 earnings?
- How fast can you increase your earnings?
It may sound odd at first, but pricing is the fastest and surest path to higher profit.
Start With the Math
What else would match the impact of 1 more point of margin? For most distributors that’s equal to a 25+% increase in EBIT. Think how much you’d have to increase sales to match that.
How Long Will it Take to Get that Point of Margin?
We’ve all spent long periods of time on pricing projects. Profit2 has developed a methodology that will allow you to get in the fast lane on margin improvement. Here’s how:
- We focus on the least price-sensitive sales- the “bottom 30%”
- Identify where you are underpriced
- Make specific recommendations on new pricing
- Provide tools to make it easy and fast for you to review
- Help you get the changes into your system and track results
Can you get away with increasing margin now?
Yes, if you focus on incidental purchases. These are items purchased a couple of times a year with the customer spending a couple of hundred dollars a year. Your customers are busy now catching up. There’s a lot for them to watch and do. This provides the cover you need to gently raise margins on underpriced sales and gain 4 points on 30% of sales.
Learn More in a Free Webinar Specific to Your Industry
We are offering industry specific webinars over two days Aug 18-19. Contact Paul Parsons at paul@profit2.com for the dates/times of your industry specific webinar segment.
