What We Actually Find in a Free Margin Analysis

We offer every distributor a free margin analysis. Connect to your ERP (read-only), analyze 12 months of transaction data, deliver a full report in 48 hours.

Most distributors expect to find a few small issues. What they actually find surprises them. Here's what comes up in almost every analysis we run.

Finding #1: Stale Agreements (Found in 100% of analyses)

Every single distributor we've analyzed has customer pricing agreements that haven't been updated after vendor cost changes. Every one.

The typical finding: 8-20 agreements where vendor costs have increased but customer prices haven't been adjusted. These agreements are actively losing money on some SKUs and making razor-thin margin on others.

Typical dollar amount: $40K-$150K/year in margin at risk.

The fix: Renegotiate the top 5-10 agreements. Most customers accept a price increase when you can show them the vendor cost change. The ones who don't were probably unprofitable accounts anyway.

Finding #2: Rep Discounting Variance (Found in 95% of analyses)

When we benchmark discounting across your sales team, there's always at least one rep whose average discount is 2-4% higher than the team average. Usually more than one.

This isn't about finding bad reps. It's about finding habits. A rep who gives 8% because they've always given 8%, not because the customer needs 8%.

Typical dollar amount: $20K-$80K/year per outlier rep.

The fix: Show the rep the data. "Your average discount is 7.1%. Team average is 4.8%. Your close rate isn't higher than the team's." Most reps adjust immediately when they see the numbers.

Finding #3: Volume Commitment Shortfalls (Found in 80% of analyses)

Many distributors offer tiered pricing based on volume commitments. "Buy $500K/year and get tier 2 pricing." The problem: nobody tracks whether the customer actually hits the volume.

We typically find 5-15 customers receiving volume-based pricing who are at 40-70% of their committed volume. They're getting the discount without delivering the volume.

Typical dollar amount: $15K-$60K/year in unearned discounts.

The fix: Conversation with the customer. Either they commit to hitting the volume, or the pricing adjusts to match their actual purchasing level.

Finding #4: Margin-Negative SKU/Customer Combinations (Found in 90% of analyses)

Not every product is profitable with every customer at every price point. But most distributors don't have visibility into which specific customer/SKU combinations are underwater.

We typically find 50-200 specific line items that are being sold below cost or at margins under 3%. Some are intentional loss leaders. Most are accidents — pricing that was set years ago and never revisited.

Typical dollar amount: $10K-$40K/year in below-cost sales that nobody intended.

The fix: Review the list. Keep the intentional loss leaders. Fix the accidental ones.

Finding #5: Promotional Cannibalization (Found in 70% of analyses)

For distributors running regular promotions, we almost always find that a significant portion of promotional volume comes from existing buying patterns. Customers who would have purchased anyway simply time their orders to coincide with the promotion.

Typical finding: 60-80% of promotional volume is organic demand that was pulled forward or shifted, not truly incremental business.

Typical dollar amount: Varies widely, but most distributors are spending $5K-$15K/quarter on promotions that generate little to no incremental revenue.

The fix: Narrow promotions to new customers or new product categories. Stop subsidizing purchases that were going to happen anyway.

The Total Picture

Across all five findings, the typical margin analysis surfaces $120K-$400K/year in recoverable margin. For larger distributors, it's often more.

The report breaks down every finding with specific customer names, agreement numbers, SKUs, and dollar amounts. It's not a generic "you could save money" assessment. It's a line-item action plan.

How It Works

1. We connect to your ERP (read-only access, no data leaves your systems) 2. We analyze 12 months of sales, pricing, and agreement data 3. We deliver a report in 48 hours with findings, dollar amounts, and recommended actions 4. You get a 30-minute video walkthrough of the findings

You keep the report regardless of whether you work with us. The margin agents are what turn the one-time analysis into continuous protection — but the analysis itself is yours.