B2B NewsPet industry news7 Ways to Grow Your Building Materials Business

7 Ways to Grow Your Building Materials Business


- Advertisment -spot_img

Growth in many businesses is about smart purchasing and profitable selling and that is so true in the building materials sector. Of course, on the face of it, this should be relatively easy — were it not for the way that deals are struck with suppliers in this sector. Manufacturers of building materials supplies often use rebates as a mechanism for maintaining their stated price. It is very common to see a trading deal struck with a standard price and negotiated rebates and retrospective discounts which effectively lower the price in return for higher sales volumes. Suppose your head office has negotiated a deal with a supplier for their bathroom suites:

  • The first 1000 bathroom suites are at the standard price.
  • Once you have purchased over 1000, a retrospective discount of 5% is earned.
  • And when you have purchased over 1500 a further 2% discount is earned on all bathroom suites in the future.

If you’ve purchased 981 bathroom suites to date and a builder arrives asking for a further 20, you know that, if you need to, you can offer a slightly better price in order to win the sale as you are close to being able to claim that retrospective discount. But what if you don’t actually know how many bathroom suites have been purchased across the group already? What if calculating that takes too long? Do you take a chance and make a lower offer to win the business, thereby risking your profitability? Or do you stick to the price and risk losing the sale? These are the questions branch managers and sales people in building materials businesses face every day. Distributors with revenues in excess of 100 million often find it difficult to keep a track on the sheer volume of products, types of deals and suppliers. As a result, we typically see two major issues that impact profitability for companies in the building materials industry:

  • Inaccuracies in calculating and claiming rebate income
  • Lack of visibility of actual margin at the point of sale

It is easy to see that one stems from the other. Let me explain: Where tiered discounts are on offer, the sales person or branch manager needs to know exactly where they are in terms of overall volume in order to calculate an accurate current cost. We have seen many situations where this information simply isn’t available at the branch level, because consolidation of purchases against contract happens only at group level. Worse still, where that consolidation is performed in a spreadsheet, there is the high probability that it is not updated with every sale made — which means it can never be an accurate snapshot of actual purchases made. So how do you rectify this situation? Here are three things that will help to improve profitability at the point of sale:

1. Create agreements that can be systemised — in other words deal structures that you can translate into a format against which you can record purchase history. This will set the scene for accurate records and up-to-date pricing information.

2. Put controls in place so that sales / branch managers can see the cost and discount information that they need to see in order to put them in a position where they can judge the competing SKUs that drive the most profit.

3. Create alerts to show when thresholds are about to be missed to give sales / branch managers the opportunity to sell more and make even more profit.

And four further things you can do to promote mutual growth for you and your suppliers:

4. Introduce the ability to model deal scenarios based on actual / forecasted purchasing activity. This will enable you to negotiate deals with suppliers that fuel achievable growth for you both.

5. Use online contract approvals to ensure there are no disagreements about the nature of the deal being struck.

6. Integrate data sources (purchases made) against the contract, and automate claims processing to remove errors and disputes.

7. Provide a supplier portal to review your performance against targets.

In other words, make it easy for suppliers to do business with you. Do that AND sell more means you’ll be putting yourself in the best possible negotiating position with your suppliers. A rebate management system will enable you to do all of this and more. Find out how a rebate management system could work in your business by downloading our eBook: “Putting the merchant in the driving seat“.

Source link


Please enter your comment!
Please enter your name here

Latest news

「贵州日报·教育」聚势赋能 提质扩容——贵州财经大..

2023年11月21日贵州日报16版(点击图片,阅读全文)全省高等教育高质量发展大会对当前和今后一个时期全省高等教育工作作出部署,描绘了新时代贵州高等教育发展的新蓝图,干货满满、令人鼓舞、催人奋进。风 Source link


来源:新华社新华社台北11月6日电(记者刘斐石龙洪)台湾“历史教育新三自运动协会”6日在台北举行记者会,批评民进党当局为达成不可能实现的“去中国化”政治目的,进行不负责任的“去古文化”教育,牺牲学子们 Source link


8月13至16日,受中交疏浚邀约,来自云南怒江崇仁完小的19名师生代表来到上海,参加为期四天的“中交助梦?看世界”暑期访沪交流活动。崇仁完小坐落于海拔2000多米的横断山区。该校师生总共327人,学校 Source link

Bronchitis in Dogs: Signs, Causes, & Treatment (Vet Answer)

The information is current and up-to-date in accordance with the latest veterinarian research. Learn more » In dogs,...
- Advertisement -spot_imgspot_img

Symptoms, Diagnosis and Treatment – Dogster

Astra, the 6-year-old Cocker Spaniel exhibited several vague clinical signs like not eating every few days and occasional...

Ark Naturals Voluntarily Recalls Brushless Toothpaste Value Packs

Ark Naturals voluntarily recalls three of their “Brushless Toothpaste Value Pack” products after learning that one of their...

Must read

Lady Gaga and Cardi B Meet at the Grammys

What was expected of her was the same thing...

Jennifer Aniston’s Ex Justin Theroux Wishes Her Happy Birthday on Instagram

What was expected of her was the same thing...
- Advertisement -spot_imgspot_img

You might also likeRELATED
Recommended to you