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Painless Pricing Improvements for Distributors
Ian Heller and Jonathan Bein discuss their favorite profit-driving hacks for distributors:Learn the power of 1%.A McKinsey study from a number of years ago showed the power of 1% price adjustments. According to their analysis, a 1% increase in price, assuming volume remains steady, would generate an 8% increase or more in operating profits. What’s more, the authors point out that an increase in revenues at the expense of a price cut does not have nearly the same impact: Volumes would have to rise by 18.7% to offset the profit impact of a 5% price cut.Push up prices on C and D items to small…
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