Manufacturing & Distribution

The manufacturing and distribution industries face tight margins and fierce competition. Revenue Management Labs helps manufacturing and distribution organizations implement the pricing strategies that give you an edge. This includes strategic price planning, cost control, breakeven analysis, competitive analysis in local and global markets, and consideration for changing customer demands.

 

Unique Pricing Challenges Manufacturers & Distributors Face

  • Commoditization of offerings leading to increasing price sensitivity
  • A larger number of alternatives
  • Customers comparing deals online
  • Low margins

 

Revenue Growth Opportunities for Manufacturers

  • Optimize list price-setting process based on price elasticity and competitive insights
  • Develop a defendable discount structure based on analytical customer and product segmentation
  • Create a service pricing strategy, to drive new relevant revenue streams
  • Pricing process for bid requests based on the following criteria: deal, channel, customer, and portfolio dynamics

 

Manufacturing Pricing Strategies

Selling items wholesale requires specific planning and preparation. If you are a manufacturer or a distributor, you need to establish a set pricing strategy for your business. Distribution pricing strategies can increase your earnings while your pricing guidelines and financial plan ensure you earn as much back on your products as possible while maintaining client loyalty. 

Revenue Management Labs designs custom financial plans for manufacturers. Together, we can create an ideal plan to achieve your financial goals. 

 

What Should You Consider When Designing Manufacturing Pricing Strategies?

The distribution price is the price you set for other vendors who will purchase and redistribute your products. Your company's pricing strategy should account for your distributors' needs as well as your own.

If your prices are too high, your clients will find another supplier with a lower price. If your fees are too low, you might undervalue your products and lose out on profit. It can also be harder to negotiate higher prices if you start with low prices.

An effective manufacturing pricing model considers all sides and helps you adjust as needed to match your inventory status and profit goals.

 

How Do You Collect Manufacturing Data?

Before you develop a pricing model, you should understand how to collect manufacturing data. This data will help you determine your pricing margin scope. You should also know your total costs in terms of production, labor and transportation. With this information, you can better understand what your profit goal should be.

Revenue Management Labs offers data collection as part of our pricing strategies. We consider industry trends and updates when we work to create a financial plan for your business.

 

How Can You Use Data to Set Prices?

After you have gathered your data, you can then break down pricing and costs. There are a few different steps to develop an effective pricing model. 

 

1. Monitor Underselling Products

If you notice a decline in sales or a struggling product, you can use your data to improve the product or price it to remove excess inventory. 

 

2. Capture Value

More goes into pricing than just the cost of manufacturing. You should also consider the value the item brings to the customer. Factors such as increased health, happiness or efficiency can determine the value to the customer and help you develop new and improved products in the future.

 

3. Understand Your Audience

To have a comprehensive strategy, understand that your customers' pricing needs will differ. If you offer multiple payment options and plans for different customers, you can target numerous demographics at once and increase customer satisfaction. 

 

Pricing Strategies for Manufacturers From Revenue Management Labs

At Revenue Management Labs, we work with you to create long-lasting pricing strategies. Our goal is to make you self-sufficient with innovative and applicable financial plans. We provide the tools you need, such as team training and an execution plan, to implement your strategy with ease.

We offer free consultations to help you get started. Fill out our online contact form and meet with us to discuss financial planning options. Contact us with any questions and get started on your distribution pricing strategies.