“Pricing is distributor’s most powerful value-creation lever“

- McKinsey & Company

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A wholesaler's common pricing challenges lie across their pricing process. Price list management is typically suboptimal, it is difficult to gain competitor insights, and customers are segmented incorrectly, while some even rely on older pricing methods. The only reliable way out of this chaos is to organise all your data and take back pricing control using an AI-powered pricing tool.

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For wholesalers, pricing is more than just numbers on a list. It's a strategic lever that can make or break profitability. There are some common pricing challenges in wholesale that businesses face. If you as a wholesaler relate to these problems, take a look at the probable solution to fix them.

In the article, McKinsey further states that,

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“…pricing has a disproportionate impact on a distributor’s enterprise value, with an increase of 20 percent for a 1 percent increase in price.“

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The correct pricing strategy in wholesale would also require proper data availability and quality. Let’s understand the issues and discuss the way out.

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13 Common Pricing Challenges in Wholesalers

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The pricing strategy in wholesale is not optimal. Businesses are still leaving money on the table and need a solid long-term fix. Challenges of pricing in wholesale include lacking data, ignoring algorithmic ways of pricing, overlooking customer’s willingness to pay and more.

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While some wholesalers still rely on old ways of setting prices, some businesses that use pricing tools are still grappling with the data all around. The wholesale pricing challenges are manifold. Below, we have laid down some common issues. Do you face any of them?

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1. Algorithm Problems

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Wholesalers often face hurdles due to a lack of data-driven decision-making and the absence of advanced algorithmic tools. Ignoring such pricing tools for businesses that deal with a big product assortment, could lead to missed margins and suboptimal revenue.

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Here are the common issues wholesalers face with algorithmic pricing:

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• Pricing Based on Gut Feeling: Relying on intuition instead of using smart AI-powered recommendations leads to inaccurate calculations. Losing margins becomes a common sight which holds you back from growing as a company.
• No Data-Driven Approach to Pricing: Without actionable data, pricing strategies are often based on historical trends and assumptions. This fails to reflect real-time market dynamics.
• Not Using AI for Smart Price Recommendations: A lack of AI-driven tools prevents wholesalers from dynamically adjusting pricing to reflect market demand and customer behaviour, impacting profitability.
• No Use of Elasticity and Sensitivity Models: Ignoring price elasticity and sensitivity analysis results in missed opportunities to optimise margins and revenue.

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2. Suboptimal Price List Management

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Wholesalers often struggle to set strategic prices unique to brands and product groups, even if they have different market dynamics and price sensitivities from one another. A one-size-fits-all pricing approach may be common in wholesale. This fails to maximise profitability.

Likewise, wholesalers may be left to earn the bare minimum amount of revenue.

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3. Manual Pricing Processes

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Outdated manual processes slow you down from everywhere —such as managing prices via spreadsheets—being time-consuming and error-prone. They are not responsive to market changes whereas pricing tools follow real-time market trends and competition to notify you of updates and probable margin opportunities.

Old-school pricing also prevents effective price optimisation across regions or customer groups.

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4. Challenges in Managing both B2B and B2C Pricing

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Balancing pricing strategies for B2B and B2C markets is no easy task. B2C pricing often requires transparency and competitiveness due to platforms like Amazon and Google Shopping, whereas B2B pricing demands a focus on relationships and custom quotes.

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5. Margin Erosion from Incorrect Customer Segmentation

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Poor customer segmentation or excessive customization of price lists often results in inefficiencies and missed opportunities to increase revenue. Grouping customers incorrectly or overcomplicating price lists can significantly reduce profit margins.

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6. Inability to Use Data from Similar Customers for Creating Winning Quotes and Price Lists

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For suppliers and wholesalers, leveraging data from similar customers is key to crafting effective pricing strategies, quotes, and tenders. By analyzing customer behaviour—such as patterns from successful or unsuccessful deals—businesses can uncover insights that drive better decision-making.

Without these insights, pricing often becomes inconsistent or overly generalized, resulting in missed opportunities, inefficient strategies, and suboptimal revenue outcomes.

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7. Missed Opportunities Due to Lack of Inventory-Based Pricing

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Without dynamic pricing that reflects inventory levels, wholesalers lose out on margin opportunities during high demand and fail to clear slow-moving stock efficiently.

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8. Difficulty in Gaining Competitor Insights

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Competitor pricing is often hidden behind portals or scattered across sales teams' spreadsheets. Staying competitive becomes a guessing game without a structured process to gather and analyze these insights.

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9. Replacing an Outdated In-House Pricing Tool

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Many wholesalers rely on in-house developed pricing tools that no longer meet modern business needs. These legacy systems often lack scalability, advanced features, and the ability to handle complex pricing strategies. Without an effective and adaptable pricing solution, businesses struggle to remain competitive in dynamic markets, losing opportunities to optimize profitability and efficiency.

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10. Replacing an Outdated In-House Pricing Tool

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Many wholesalers rely on in-house developed pricing tools that no longer meet modern business needs. These legacy systems often lack scalability, advanced features, and the ability to handle complex pricing strategies. Without an effective and adaptable pricing solution, businesses struggle to remain competitive in dynamic markets, losing opportunities to optimize profitability and efficiency.

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11. Too Many Customer-Specific Price Lists Cause Problems to Manage (and Optimize)

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Overly customized price lists for individual customers or segments create significant challenges. Managing these numerous lists becomes time-consuming and prone to errors, especially when considering varying customer demands, regional pricing, or market conditions.

Additionally, the absence of smart insights, such as elasticity, hampers the ability to optimize these price lists, leading to missed revenue opportunities and inefficiencies.

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12. Willingness to Pay Per Customer is Unknown, Leading to Missed Margins

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Understanding each customer’s willingness to pay is critical for setting optimal prices. Without insights into how much customers are willing to pay, wholesalers often underprice products, leaving potential margins on the table. This gap in understanding prevents businesses from capitalizing on premium pricing opportunities or tailoring strategies to maximise profitability.

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13. Managing Pricing Across Regions

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For wholesalers operating in multiple countries, price optimisation is a Herculean task. Each region's unique economic conditions, competition, and consumer behaviour make standardisation tough.

Using regular methods to set prices could leave you multiple dollars behind.

When operating cross-country, your pricing strategy and process should be in your control. One of the most effective ways is to incorporate a price engine and let it handle your pricing affairs in a jiffy. Let’s head to the next section and explore the solutions.

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How SYMSON’s Pricing Tool can Help you Overcome these Challenges

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“… the outperformers in the years ahead will be the distributors that see price optimization as the foundation of commercial excellence—speeding pricing approvals and helping salespeople make not just more and bigger deals but more profitable deals.”

- McKinsey & Company

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When it comes to pricing for wholesale businesses, it’s ideal to take back control of all your affairs in one pricing intelligence tool.

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A few forward-thinking wholesalers have embraced creating dedicated pricing teams focused on driving consistent margin improvements year after year. McKinsey’s study also mentions that these teams must work to instil pricing discipline, establish clear processes for handling exceptions, and leverage analytics and tools to unlock value. Certain pricing models for wholesale businesses are also helpful, to begin with, once you have a pricing tool.

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It’s crucial to build a profit-focused pricing strategy. However, the following steps can help ensure steady margin growth, even in tough economic conditions.

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1. Introduce an AI-powered Pricing System for your Pricing Operations

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Leverage advanced analytics and digital tools. Sales reps can’t always pinpoint the best price for every deal, but modern wholesalers can. By using advanced analytics on internal and external data, wholesalers can uncover pricing opportunities and equip sales teams with benchmarks and tools to make smarter pricing decisions. Read more on how SYMSON’s pricing tool can help distributors like you.

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• Invest in systems that provide real-time insights into your market. Using dashboards and analytics, you can shift from reactive to proactive pricing, ensuring you stay ahead of the competition.
• Replace manual processes with automation. Modern pricing software can handle complex pricing requirements, ensuring consistency, reducing errors, and saving time.
• Use a unified system for both B2B and B2C pricing. Look for pricing tools that integrate seamlessly across both segments. This ensures consistency while allowing for tailored strategies that meet the unique needs of each market.
• Leverage customer data and AI tools to estimate individual customers’ willingness to pay. This enables you to personalize pricing, maximizing revenue without alienating buyers.
• Implement elasticity and sensitivity models. Use algorithms to understand how price changes affect demand. This insight allows you to optimize for both volume and margin, driving profitability.

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2. Monitor and Act upon Competitor Prices

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In a powerful pricing system, you’ll be able to use competitor price monitoring tools that scrape and organise publicly available data. These tools simplify the process of incorporating competitor insights into your pricing strategy.

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Also Read: Top 10 Competitor Pricing Tools and their In-depth Explanation for you to Choose From

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3. Optimise customer segmentation

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Use customer data to segment effectively and tailor price lists without overcomplicating them. AI can help identify patterns and create groups that maximize profitability.

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4. Integrate stock management with pricing

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Connect your inventory data with your pricing engine to enable dynamic adjustments. For high-demand products, increase prices strategically, while offering discounts for slow-moving stock.

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5. Link Sales Incentives to Both Revenue and Profit Growth

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One of the most powerful suggestions by McKinsey for growing more profits is to tie sales incentives to profit, and not just revenue. Traditional compensation often prioritizes volume over margins, leading to revenue growth at the expense of profitability. Leading distributors now align incentives with both.

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For instance, an electronics distributor improved margins by shifting its sales reps' focus from volume to profitability through revised compensation, pricing policies, and training.

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How Symson Helped 2 Large Wholesale Companies Gain Pricing Control

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Symson joined forces with INDI and Stiho, two prominent wholesale companies, to transform their pricing strategies. Through process automation, centralized pricing knowledge, and real-time analytics, both companies achieved remarkable improvements in profit margins, operational efficiency, and customer satisfaction. Here’s a closer look at the impact Symson delivered:

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INDI: Read Case

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Symson transformed INDI's pricing strategy, delivering impactful results:

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• 60% Time and Effort Reduction: Automated pricing updates eliminated manual intervention, freeing up resources for strategic tasks.
• Increased Margins: Real-time data-driven algorithms optimized prices, resulting in significant profit growth.
• Centralised Knowledge Management: All pricing strategies are now unified in Symson's platform, ensuring consistency and accessibility.
• Operational Efficiency: Automation reduced errors and improved workflows, boosting customer satisfaction with accurate and competitive pricing.

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Stiho: Read Case

Stiho teamed up with Symson to maximise profitability and operational clarity:

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• Optimised Price Management: Tailored strategies for brands and product groups to enhance revenue.
• Streamlined Processes: Integration with ERP systems automated pricing, reducing errors and inefficiencies across markets.
• Competitor Insights: Advanced analytics improved market positioning and strategic pricing decisions.
• Centralised Pricing Logic: Consistent pricing across locations strengthened customer trust and fairness.

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Symson’s solutions have empowered both companies to achieve sustainable growth, operational excellence, and customer loyalty through smarter pricing.

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