Managing Special Pricing Agreements is linked to higher margins

Posted by Craig Flynn on 04-Dec-2018 09:55:00

 

SPAs (Special Pricing Agreements) are a common vendor program in many industry sectors. The program gives a special product discount for verified sales to an ultra-competitive event where in-stock discounts can’t secure the order.

SPAs trace their roots back to the 1970’s but have shown significant growth in the past decade. As B2B e-commerce now counts for an estimated 15% of all orders and grows at 8% per year, SPAs have grown significantly as price and availability are easily and quickly researched.

SPAs are now used by 77% of all distribution firms in North America; second only to volume rebates which are used by 90% of distributors.

US based research has found that software dedicated to tracking, remittance, and attribution of vendor monies is a significant factor in the sales success with SPAs.

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Topics: Special Price Agreements SPAs, Rebate Management System, Industry Sector: Buying Groups, Industry Sector: Wholesale Distribution, Industry Sector: Building Materials, Industry Sector: Retail, Rebate Accounting, Rebate Management

From counting to measuring and managing vendor funds

Posted by Craig Flynn on 20-Nov-2018 18:22:21

Vendor monies that support reseller sales are big business. US-based research conducted in October 2018 estimates that, at top performance levels, distributors, dealers, and retailers use $600+ Billion (USD) in vendor funds. Projections from the EU find that approximately €500 Billion (EU) in vendor funds are similarly spent.

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Topics: Supplier collaboration, Rebate Management & Growth, Rebate Management

Managing rebates, SPAs, ship and debit claims, claimbacks, contract support, MDFs and Co-op funds for wholesale distribution businesses

Posted by Andrew Butt on 07-Nov-2018 09:22:42


Rebates, SPAs, claim-backs, contract support are all very similar and at the same time quite different to each other. In essence they are all terms for the money that wholesalers claim from suppliers and manufacturers for selling their products. Some of the key differences lie in how the agreements are formed, whether goods are actually ever handled by the wholesaler, and how the claims are made.

Collectively, they are sometimes referred to as “vendor monies”. It is estimated that, annually, these amount to $600bn in North America and perhaps as much as $500bn in Europe.

In a world where margins are tight, wholesale distributors across nearly 50 sectors rely so much on vendor monies that their absence would be a serious dent in their profit margin.

Where margins are as low as 4%, a 2% change in price means a whopping 50% more profit!

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Topics: Rebate Management

Buyers' guide to rebate program management systems

Posted by Andrew Butt on 29-Oct-2018 16:01:21

Whilst many core business systems have some functionality to help monitor trading agreements that involve vendor rebates, most have neither the flexibility nor the extensive range of functionality that is needed to support the increasingly complex
world of rebate management.

For many, that lack of functionality has resulted in missed rebates and poor accrual accounting.

But worse than that, if your business systems don’t support rebate management fully, then the whole purpose behind creating deals involving rebates – a means to influence business growth – is missed.

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Topics: Rebate Management System, Rebate Management, Rebate Accounting

Why building materials wholesalers should invest in a specialist rebate management system

Posted by Andrew Butt on 17-Oct-2018 16:07:29

Companies tend to look for specialist rebate management software when they reach a point where their core business systems are proven to be inadequate. 

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Topics: Rebate Management System, Industry Sector: Building Materials, Rebate Management

4 things to STOP DOING in order to maximise your rebate earnings

Posted by Andrew Butt on 27-Sep-2018 17:22:05

Whilst working with a number of organisations across industry sectors such as building materials, buying groups and wholesale and distribution, we have seen a large variety of very complex supplier rebates and trading agreements.  These very often involve incredibly complicated performance-based calculations with seemingly endless permutations, and on top of that agreements are subject to periodic review and change.

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Topics: Rebate Management

Making every penny count: suppliers to the building industry

Posted by Andrew Butt on 20-Sep-2018 14:26:19

If you’re a builders merchant in 2018 you’ll know how essential it is to ensure every penny counts in terms of your bottom line. So, it’s even more crucial than ever that you don’t miss out on any of the, often significant, sums due to you through rebates.

Indeed, profitability for suppliers to the building industry is often very closely dependent on the amount of rebate they can negotiate and claim and many businesses across this sector tell us that the sheer volume of categories and the complexity of rebate deals means that administering rebate claims is a mission critical element of their business which can be the difference between a decent year and a great one.

100% of our customers have identified previously missed rebate claims after implementing our Dealtrack system and we have even seen cases of missed rebate claims amounting to 7 or even 8 figure sums.

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Topics: Industry Sector: Building Materials, Rebate Accounting, Rebate Management, Rebate Management System

Rebate management explained

Posted by Andrew Butt on 19-Sep-2018 14:23:32

Rebate management is the process of recording supplier agreements, tracking purchases and sales against those agreements, and managing accruals and rebate claims in a timely manner.  This blog and animation cover:

  • What is rebate management?

  • What is a rebate management system?

  • What are the benefits of having a rebate management system?

  • What types of company use rebate management systems?

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Topics: Rebate Management, Rebate Management System, Rebate Accounting

10 reasons rebate accountants fail to claim 100% of rebate due

Posted by Andrew Butt on 06-Sep-2018 10:42:00

Failing to claim 100% of rebate due can have a large negative impact on the bottom line for businesses in industries where rebate agreements are commonplace.  Finding out why that happens and how to stop missing vendor rebate claims is at the forefront of the minds of rebate accountants and financial leads the world over.

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Topics: Rebate Management, Rebate Accounting, Rebate Management System

Managing complex trading agreements — 7 keys to success

Posted by Andrew Butt on 04-Sep-2018 11:07:00

With increasing global competition, ever-more complex trading agreements are being created.

Effective management and control of complex trading agreements that include supplier rebates is notoriously difficult. Most standard accounting and purchasing software packages will not cope with the variety and complexity of pricing strategies and rebate agreements.

But a solution that is disjointed or based on spreadsheets introduces the possibility of missing data, human error and inaccurate reporting.

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Topics: Rebate Management