The main aim of pricing and revenue management in a supply chain is to create a balance between supply and demand, while simultaneously optimizing profits. Traditionally, businesses would tweak the availability of their assets. However, in this day in age, revenue management has adopted a different approach. One that focuses more on pricing as the main tool for leveling out supply and demand.
As a more universal approach, this type of pricing and revenue management in a supply chain has proven to boost profits more efficiently. It’s a winning strategy for companies across a number of industries, including manufacturing, food distribution, and wholesale. Let’s dive into how and why you would adopt this approach for your own company.
Balancing supply and demand
Individually, both supply and demand can be adjusted using several different strategies. For supply, this could include changes to your inventory, while demand is usually generated by marketing efforts.
Pricing management is the process that ties supply and demand together by focusing on strategies designed to strike a balance between the two. Working with limited supply chain assets, both in terms of capacity and inventory, pricing and revenue management in a supply chain use pricing as the key tool for optimizing profits.
Increasing the profit margin
There are several revenue management strategies organizations can choose from, depending on your industry and business model. You can choose to focus on the timing of your pricing, targeting different customer segments or adjusting rates based on product or service availability.
Each of these approaches to pricing and revenue management in a supply chain can significantly increase profits. Which one you choose is largely based on the nature of your offering. Perhaps your value proposition is different for different audiences. Or maybe the demand for your products or services spikes during certain seasons. You could even adjust pricing based on individual versus wholesale purchases.
Seasonal pricing and revenue management in a supply chain
Manufacturers and food distribution companies selling season-specific products rely on revenue management tactics to balance out their supply and demand between peak times and the rest of the year. One winning pricing strategy for optimizing profits in this area is fluctuating between higher rates when demand spikes, and reduced prices in off-peak periods. This way you’re encouraging customers to shift their demand, which in turn allows you to maintain the efficiency of your supply chain.
By making this shift as well you are not stuck with a ton of inventory at certain times of the year and you can maintain consistent cash flow for these items.
Revenue management of bulk and spot customers
Most products can be offered individually at a higher price (spot sales) or in bulk at a lower rate. Effective pricing and revenue management in a supply chain strikes the right balance between the two, ensuring wholesale companies are bringing in optimal profit from their offering. You can achieve that through in-depth customer segmentation and strategic inventory management.
It does take an all-hands-on-deck approach. All teams need to be on the same page to be able to execute an effective pricing and revenue management strategy.
Not sure where to start?
The sweeping popularity of digital channels has completely transformed the world of sales. Manufacturers, distributors, and wholesalers can no longer afford to set one rate and let it run in the background. Modern pricing management involves the complex process of juggling multiple pricing strategies and time-consuming processes.
With so many things on their plates, revenue managers face several challenges in making important decisions. Below, we talk about three main struggles everyone in this fast-paced role needs to deal with daily, along with ways a powerful pricing revenue management software can help overcome them.
Understanding the ‘big picture’
The biggest challenge of revenue management is thinking beyond the sales – the most successful pricing strategies outline ways to maximize profits across all business areas. Managing price adjustments can be tricky, but it’s also crucial for the success of any business.
It’s an indisputable truth that prices fluctuate, no matter your industry, so it makes sense that your rates should change. However, many pricing managers struggle to decide when they should make such changes and how often such tweaks are necessary. With the help of powerful pricing revenue management software, you can view performance figures, filter them by customer segments and adjust your rates in real-time.
However, there’s also the added pressure of setting up and managing promotions. Whether you’re dealing with simple discounts and incentives, or more complex alternatives such as rebates, royalties, and commissions, you’ll need a powerful tool to keep your affairs in order.
The right pricing software can allow you to do all that and more. Advanced pricing management tools offer you a user-friendly preview of historical data and forecasts, making the process simpler, quicker, and more efficient for your employees.
Choosing the right strategy
In addition to making your day-to-day life more manageable, a pricing revenue management solution enables you to look to the future. Backed up with an in-depth analysis of your past sales and revenue generated, you can quickly evaluate business performance and adjust your pricing strategy accordingly.
Depending on your business goals, you might want to segment pricing based on customer attributes, specific product or service features, or even create your groups using any documented data category from your audience research.
Similarly, you can use the built-in functionalities of your pricing revenue management software to set up a variety of rebates for both vendors and customers, enabling them to access discounts and collect payments in a manner that’s convenient for them.
Manual vs Automation
Efficient revenue management is about keeping pricing dynamic. Many companies struggle with the day-to-day management of their rates and discounts, primarily because they have data scattered across various documents.
Aside from the potential error that can occur during manual data input and the inefficiency of this method, lack of automation can hinder revenue managers’ work to execute a dynamic pricing strategy successfully.
Instead of going through the tedium of manually implementing all pricing updates, copying price lists, and combing through data for the information you need, you can automate the entire process with the help of pricing revenue management software and leave all that in the past!
Besides, when you invest in a pricing management tool, you take advantage of its advanced functionalities to measure customer loyalty levels, quickly set up exceptions to your main price list, and efficiently convert sales data to a unit of measure.
Discover the power of pricing revenue management software.
Duplication of pricing, price adjustments, date-driven pricing, and promotions can be a daunting task.
Is it a manual process for you? Do you have to keep track of a million spreadsheets? How about a pricing strategy, what does yours look like?
When you think about your pricing strategies and offering discounts or promotions, it can be time-consuming and painful? Acumatica does have some pricing functionality like discounts and special promotions, but it may not meet all your pricing needs. Maybe you need to rethink your strategy, start here with this checklist.
How can you end the duplication process with pricing? Here are 4 ways:
1. Automate different pricing strategies
Whether those strategies involve running promotional discounts, offer VIP client discounts, rebates for vendors, and more. There really is no limit to the different price adjustments you can use or how many you can offer.
2. Don’t forget the accounting side of things
If you are using a variety of promotions or campaigns (as described above) and you want to put dollars to each of those accounts, you can post adjustments to multiple GL accounts for a single line item.
3. SQL Based Engine
Rockton Pricing Management (RPM) is the pricing engine sitting outside of your ERP system. It is the little engine that could or can do any type of price calculation. Once the price is calculated based on certain criteria it will then push that price back into Acumatica.
We push all of those:
4. How flexible is Rockton Pricing Management?
You can set up a few different promotions that apply specifically to a date range, for a particular customer.
Change a percentage at any time. Give your VIP customer a 3% discount when they are ordering regularly and then when they’re not ordering as much you can easily remove them from VIP status. This can help increase your bottom line knowing you have the flexibility to change which customers get which discounts.
This is all done behind the scenes which means no more duplication of efforts. When you’re setting up these different price calculations, RPM will do the rest and tell the system to just remove that customer from the VIP status filter.
Now, let’s take it a step further. If you have these types of pricing scenarios, then you’re obviously selling goods or services. Wouldn’t it be nice to connect all of your channels from EDI and storefronts to inventory, shipping, and fulfillment?
Here are 3 ways to say goodbye to data duplication
1. One platform is all you need
TrueCommerce can help you streamline processes including eCommerce, marketplaces, and EDI with one single, unified solution. It is a true multi-tenant, cloud-based technology, so you can run it anywhere.
2. All Your Orders in 1 Place
You don’t realize how many places pricing can touch – EDI, Amazon, storefront, an email pdf. It doesn’t matter where the orders are coming from they all end up in 1 central place.
Where is your pricing coming from?
- EDI orders with the negotiated price
- eCommerce with the promotional pricing for your web store or your website
With all of your orders in one central place, there is no more duplication and you never have to re-enter orders or re-type them in.
3. Product Management to the Rescue
Selling on these different platforms and marketplaces is a great way to make money, build your business, and sell your products but each one is different.
Rockton Pricing Management handles all the different pricing scenarios and attributes, TrueCommerce can also enhance those products to have all the different attributes required by doing digital commerce.
The information Amazon wants is different than what Shopify might need to know, this includes product descriptions, packaging, size of your product, and shipping info. With product management in place, you don’t need to keep track of all of that.
With everything integrated and working together with your storefront (Amazon, Shopify, WooCommerce, Magento) you can keep things running smoothly and seamlessly with Acumatica.
End the duplication of pricing, inputting orders, and tracking your entire supply chain process. It is nice to know there are tools out there to not only manage your pricing but your shopping platforms as well.
Check out this webinar to see how Rockton Software and TrueCommerce can help:
- Automate complex and obscure pricing scenarios and calculations
- Enable date-driven pricing with all historical pricing tracked
- Add multiple price adjustments on 1 item
- Gain access to more than 92,000 pre-connected retailers, marketplaces, distributors, vendors, and logistic providers.
Meet John, he’s the Pricing Manager. He wants to do something extra special for his customers, like multiple discounts.
What’s his struggle?
He wishes he could offer:
- a standard 30-day promo
- key customer discount
- a bonus discount for those who buy more than 1 item
- anything else he can dream up🤔
Right now he can’t offer any extra discounts for his customers. It’s pretty much a one-and-done scenario.
All he can do is apply:
- one discount
- one item at a time
With RPM for Acumatica he now can:
- give the VIP treatment
- create as many discounts for one item as he wants
- incentivize those loyal customers
You now have the flexibility to offer those discounts or promos for your special customers to give them a little something extra when they purchase an item or service from you.
Ready to give your customers VIP treatment?
Across many industries, businesses face the same problem: the market is becoming saturated with options every year, making the competition fiercer. It’s easy to feel like you’re losing your grip on the situation. Have no fear, there’s still a lot you have influence over, starting with your price optimization strategy.
Take a look at the 4 best practices we’ve collected below. Make a note of how many you’ve already implemented. The ones you don’t have in your toolbox are a great place to start your price optimization quest.
#1 Customer Segmentation
By now, most organizations have clocked on to the fact that one blanket pricing for all their audiences simply doesn’t work. To harness the full power of your pricing strategy, you want to really drill into your consumer demographics and create robust customer segments. In fact, many experts recommend adopting a Good-Better-Best (G-B-B) pricing strategy when you’re determining your rates.
Once you have decided how you want to segment your customers, Rockton Pricing Management gives you the power to amend your prices based on customer tiers. For instance, you can generate more revenue by attracting new, high-spend customers with a premium version of your offering. Or you can release a basic package that makes your product or service more accessible to those who cannot afford your key proposition. The latter also serves as a safeguard to your pricing power by doing away with the need to offer discounts as a means to entice customers.
#2 Continuous Improvement
There are two main factors that play into this. On one hand, we recommend investing in research and development, no matter your industry. After all, the best way to stay ahead of the competition and justify your pricing is through continuous innovation. Alongside this, try to avoid rigid pricing. Instead, monitor how your target market is responding to your rates and make adjustments accordingly.
#3 Empowered Sales Team
In today’s fast-paced digital environment, even if you have a dedicated revenue manager or even a whole team, it could be challenging for a handful of people to stay on top of pricing adjustments and fluctuations in demand. That’s why many companies are arming their sales teams with powerful software developed specifically to provide guidance with pricing management.
#4 Innovative Technology
A pricing management solution can do much more than simply assist your team with performing their daily tasks. Our flexible pricing tool is API enabled, which means our pricing solution works with your ERP. We provide SQL-based and web service APIs for RPM so you can connect to any ERP system.
With powerful pricing management software, you can automate any pricing scenario, regardless of its complexity. You will also save time, money and reduce errors by linking your price manager tool with your ERP system. The bottom line is, investing in innovative pricing management technology will give you the peace of mind that you’re showing the right prices to the right customer segments at exactly the right moment.
Ready to take your pricing strategies to the next level?
What is a Pricing Method?
The Pricing Method in Rockton Pricing Management (RPM) is used to determine how you want to calculate the price on a transaction line. There are three Pricing Methods to choose from when you are setting up the RPM Connector to use in RPM. In order to decide which method to use, you first want to understand how your ERP system is tied to RPM, then decide how you want pricing to be determined.
The RPM Connector ties your ERP to RPM. A Price Schedule is created in RPM and matches the Price Level in Microsoft Dynamics GP or the Customer Price Class in Acumatica. If a Price Schedule exists in RPM, it must match to a record in the ERP. The Price Schedule is then used to determine pricing for your transaction lines and whether any price adjustments should be calculated on that line.
The Pricing Method on the RPM Connector is important because it determines which Price Schedule to use when calculating the price for the transaction line. You decide if you want the price to be determined based on the Price Schedule you assign or if you want the system to determine the best Price Schedule to use.
What are the 3 Methods?
The static Pricing Method always uses the Price Schedule that defaults onto the transaction in the ERP. The Price Level or Customer Price Class remains the same and drives the Price Schedule RPM uses to calculate the price. For example, if Dynamics GP has a Price Level called Retail and is the default for the Sales Transaction Line when you enter the transaction, then the Retail Price Schedule is automatically used. The price from that Price Schedule is assigned to the line. The same is true in Acumatica. If a Customer Price Class of Retail is used on the Sales order or invoice, then the price is determined by the Retail Price Schedule in RPM.
The dynamic Pricing Method is a more advanced method for assigning a Price Schedule to a transaction. It lets RPM determine the best Price Schedule to use. When a transaction is entered, RPM reviews the valid Price Schedules in RPM, and the first Price Schedule found that matches the information on the transaction is used. This is usually based on combinations of Customer, Item, Date, and other attributes. Dynamic pricing allows for more of those complex pricing scenarios.
When the hybrid Pricing Method is selected, both Static and Dynamic Pricing Methods are used. With this option, you allow the ERP system to specify which Price Schedule to use (Static Pricing) or leave the Price Schedule blank, and a Price Schedule is selected for you (Dynamic Pricing).
This allows the flexibility of:
- Allowing a specific Price Schedule to default,
- Allowing the user to override the Price Schedule,
- Using Dynamic Pricing to determine the best Price Schedule for the scenario
RPM Company Setup for the Microsoft Dynamics GP Connector:
RPM Settings for the Acumatica Connector:
There’s no need to stress about selecting the right option for your business. If the Pricing Method you selected doesn’t meet your needs, simply go in the RPM Company Setup window and change the Pricing Method at any time.
These are the basics of the RPM Connector Pricing Methods. If you have any questions or need assistance with selecting the right Pricing Method, feel free to reach out to us at firstname.lastname@example.org.
Need help with your pricing strategies?
- Download our checklist
- Schedule a demo to learn more about Rockton Pricing Management
As someone working in a digital era, you would have likely heard the term dynamic price management being thrown about, but what if you’re still not sure exactly what it means? Fear not, that’s why we’re here. Dive into our quick guide to dynamic pricing revenue management for a crash-course on everything you need to know.
What is dynamic pricing management?
Simply put, it’s is a pricing strategy that uses real-time data to calculate price adjustments. Focused on changing price levels, this approach enables anyone from technology retailers and wholesalers to companies in more specialized fields such as waste management and food distribution to maximize their profits by making tweaks to their prices as and when it’s necessary.
The real power of dynamic pricing revenue management lies in the fact that the process involves much more than simply looking at prices at face value. Factors such as order cancellations and competitor rates play a crucial part in determining the best pricing strategy for your business.
There are a few you can choose from, ranging from complex real-time models to straight-forward rules-based pricing. Price adjustments can be based on customer segments, capacity, or even the specific qualities of your product or service.
The importance of dynamic pricing and revenue management
Online sales are seeing an unprecedented increase in both supply and demand in the current digital climate. This means there was never a better time to set up a pricing strategy based on real-time demand.
It gives you greater flexibility when it comes to the prices of your products or services, enabling you to simultaneously increase the number of sales you make and boost your profits.
The benefits of dynamic pricing revenue management
It’s a pricing strategy tailored to the bigger picture. Instead of setting a static price on each item in your inventory, dynamic pricing allows you to analyze customer loyalty and set up Cost Plus % based on your findings.
In addition to giving you more control over the profit margin associated with each customer segment and product, dynamic pricing and revenue management is a great way to grow the overall profits your business makes. You just need to set up an effective pricing strategy that resonates with customers!
Automating dynamic price management
Dynamic pricing often requires a lot of time and resources, and it could even cause significant losses if set up incorrectly. This is why many businesses steer clear of this pricing strategy. However, provided implementation is done right, it has innumerable benefits.
In addition to the obvious increase in sales, dynamic pricing and revenue management has more long-term advantages such as better inventory management and greater competitiveness in the face of ever-changing market demands. Plus, it provides a valuable insight into the behaviors and preferences of your customers.
With pricing strategy in a continuous flux, methods change and evolve all the time. Getting ahead of the competition with your approach is a sure-fire way to success, and with the right setup, dynamic pricing can be just the thing you need to stand out.
Time is of the essence when it comes to dynamic price management – the more quickly and efficiently you implement it, the sooner you’ll start seeing the profits roll in. Combining this innovative pricing strategy with a dynamic pricing automation tool will empower you to establish core pricing scenarios and let the system do the rest of the work in the background.
Find out more about our dynamic price management tool
Date-driven pricing is an integral part of any business, for the simple reason that every company, no matter the industry, needs to update pricing on a regular basis. Maybe you only adjust yours a couple times a year, or maybe you’ve got your fingers on the pulse and make continuous changes.
Either way, incorporating date-driven pricing into your strategy is crucial for staying ahead of your competition and optimizing profits. After all, the alternative is remaining stagnant, and in a fast-paced digital world, that’s equivalent to falling behind.
The most common date-driven pricing challenges
Unfortunately, it’s not enough to simply include date-driven pricing in your overall strategy. You’d also need a powerful ERP solution to make pricing changes based on date efficiently. Revenue managers often face challenges when it comes to updating company pricing, as the process tends to be largely manual and involves numerous spreadsheets.
When you’re dealing with substantial customer segments and a chunky catalog of products, even doing a limited-time promotion can be a ridiculously time-consuming task if your ERP system lacks the relevant capabilities. Not to mention the inconvenience of having to make pricing changes the night before discounts kick in.
Traditional ERP software nowadays enables you to assign specific price levels to customers, so you can roll out the pricing in bulk. This allows you to easily pull default prices for transactions, and adjust manually as you see fit. Some more sophisticated ERP solutions may even have date-driven pricing functionalities, but these tend to be limited.
The potential of date-driven pricing
We would not be exaggerating if we said every business needs date-driven pricing to successfully make profit. It just comes down to finding a way to turn what’s historically been a manual, time-consuming process into a seamless, automated operation.
Having a powerful date-driven pricing system enables you to effortlessly handle a range of pricing scenarios and strategically drive your company’s profits. In fact, read below for 3 ways you could start enabling this strategy today.
3 Ways to use Date-Driven Pricing
1. Special customer bundles
Bundle pricing strategy is a popular approach to optimizing revenue and tends to work splendidly when offered for a limited amount of time. Putting a single (often more attractive) price on a group of products or services is a great way to win over customers willing to hand over more cash upfront. It’s no wonder Christmas and Valentine’s Day bundles are so common across various industries, including food distributors and manufacturers!
2. Special occasion sales
And speaking of holidays, the festive season is a prime time to unleash the power of date-driven pricing. In addition to occasion-specific promotions, you can employ the same strategy for monthly or seasonal discounts, limiting your clearance rates to a single day. Wholesalers, for instance, often take advantage of this strategy.
3. Special reduced rates
Tracking competitor pricing and adjusting your rates accordingly is a huge task in and of itself. If you’re trading in a busy market space, attracting customers with price savings is an essential strategy for success. Whether you choose to charge less for your offering, or increase your prices in pursuit of a premium brand image, maintaining dynamic date-driven pricing is a must.
The benefits of a date-driven pricing tool
Date-driven pricing management is vital for your company and could be draining all of your resources. The key to freeing up time so you can focus on other areas of your business without dropping the dynamic pricing ball lies in automation.
With the help of a powerful pricing management solution, you can set up pricing by date in advance and let the system do all the time-consuming work behind the scenes. Just create the date ranges you need, and you can rest assured that your customers would be seeing the right prices at the right times.
From performing complex calculations to keeping track of sale expiration dates, the right date-driven pricing management tool will keep everything running smoothly in the background, incorporating seamlessly with your existing ERP system.
We know when it comes to pricing it can be overwhelming and there’s a lot to consider.
If you’re not sure where to begin when it comes to a pricing strategy or just need some guidance, you can:
Not every customer needs a pricing solution. If you have very simple pricing, not many customers or items, and your adjustments are easy to manage then you may be all set. So, ask yourself, how complex is your pricing?
- Manage a large list of items or customers
- Match this customer to this item or this date
- Apply discounts or a price adjustment to specific geographies
- Have many types of discounts, rebates, and promotions
Can your ERP?
- Track unlimited adjustments
- Track those adjustments back to the GL and keep them separated for processing
We find that most ERP systems cannot handle this.
We have your back
Rockton Pricing Management (RPM) is the tool to help you and your business grow. To go from manual to automated. We know it can be time-consuming and stressful to manage it all. That’s why we have your back.
This is for the:
- IT professionals who stay up late to input the new pricing changes each year
- Sales team so they know they’re giving the best possible price to their customers and getting a commission too
- Accounting so they can easily track items back to the GL, track rebates and royalties back to the vendor or customer, and not worry about over or underpaying
- Pricing managers who need to update prices on a daily, weekly, or monthly cadence and have those prices roll down to their calculations
What’s your industry?
We found a pricing revenue management solution is great for manufacturers, distributors, and wholesalers but let’s break it down even further.
- Food distributors sell by the pound, by case, by unit of measure
- Flooring and manufacturing distributors use rebates for their vendors
- Waste management companies offer discounts
- Electronics have restocking fees
- Convenience store suppliers may need to charge a brand fee by item
- Co-ops may need to change a price based on the daily market value of a component
Set It and Forget It
We’d like to think of RPM like a trusty crockpot. You put all the ingredients in and set the timer and forget about it until it’s done.
Well, with Rockton Pricing Management, you put in all the information such as pricing, adjustments, and items and then let RPM do its thing and it will send back a price when it’s done all the necessary calculations in the background.
All the manual effort, all the spreadsheets, all the time it takes to make changes are now alleviated when you put a pricing solution in the mix.
Still not sure if you need a pricing solution? Reach out to our team to learn more and schedule a personalized demo.
We are excited to sponsor the first-ever acu-connect conference, and yes it will be virtual for all to join!
Get ready for 2 days (Nov 4 & 5) of educational sessions packed with valuable content presented by Acumatica subject matter experts.
acuCONNECT 2020 is for all Acumatica Cloud ERP customers and partners! Jon Roskill, CEO at Acumatica, will be the keynote speaker to kick things off. Attendees and sponsors can look forward to amazing sessions, fun happy hours, expo time, and virtual networking!
It’s your chance to:
- Learn from Acumatica experts and solution providers how you can get the most from Acumatica Cloud ERP
- Share your knowledge about how you use Acumatica Cloud ERP to manage your business
- Connect with other community members and experts
Don’t miss this incredible opportunity to join this FREE event.
3 Ways You Can Participate
1. ISVs this is your time to shine
With Acumatica Summit postponed to May of 2021, many of us who would ordinarily sponsor the event are finding ourselves looking for alternative ways to connect with the customers and prospects.
We have found that acuCONNECT 2020 provides a great opportunity to promote our products and services directly to Acumatica Cloud ERP customers. This 2-day virtual conference is hosted on a live all-in-one platform designed for you making it easy to connect with conference participants.
Don’t miss out on the chance to receive promotional opportunities for your products and services, event social promotion, listing on our sponsorship page, and the opportunity to participate in a multi-sponsor e-mail blast, among other benefits.
Click here to learn more about sponsorship opportunities!
2. Let’s all SPREAD the word
This is not just for ISVs to promote and participate. Partners you also have a chance to invite your customers and prospects to acuCONNECT 2020! You get all the tools you need such as the logo, social images, and more with this Partner Marketing Kit.
3. Share Your Expertise
Do you have Acumatica tips and tricks to share? Has your company solved an industry-specific or interesting business challenge with Acumatica? This is an opportunity for you to share your experience with the community.
You can share your session idea now for a chance to present at acuCONNECT 2020!
Connect with Us
We are excited to be a part of this event and are ready to share, network, and help eliminate your pricing pains in the supply chain.
We will provide insight and education on:
- Common pricing pains in the supply chain
- How to automate even the most complex and obscure pricing scenarios and calculations
- Posting adjustments on multiple GL accounts for a single line item
Rockton Pricing Management (RPM) is where all the magic happens.
All updates, calculations, adjustments, attributes are managed and executed here. All you have to do is set it up and then RPM will take care of the rest. That’s why it’s the most flexible, powerful, pricing solution ever available.
We are a proud sponsor of not only this event but the acu-connect community and we know how important it is to get involved. We want to help shape the future of the channel by facilitating ideas, sharing resources, and increasing collaboration within this ecosystem. Get connected now by staying up to date with acu-connect events, such as this upcoming webinar:
What to Know Before acuCONNECT 2020
Date: Friday, October 23, 2020
Time: 2:00PM EST
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