Pricing, data, and supplier relationships

Working with pricing is not just about setting and adjusting prices. Understanding pricing data—such as competitor prices, margins, and purchase costs—can unlock valuable reports that help improve profitability.

In the introductory chapters, we discussed eliminating costly pricing errors. A simple report comparing purchase price to selling price can help prevent unnecessary margin losses.

More advanced reports include comparing your purchase price with competitor prices or minimum advertised price (MAP). If a report alerts you that a competitor's price has dropped below your purchase price or MAP, you can address the issue with your supplier and take corrective action.

One of our clients used pricing data to create a report that tracked purchase prices and competitor prices. When they noticed that a particular competitor was consistently undercutting HP toner prices, they sent this report directly to their HP supplier. As a result, HP not only improved their purchasing terms but also took action against the competitor.

Additionally, HP began requesting this report on a monthly basis, strengthening their relationship with our client. Over time, this led to even better purchasing conditions, giving our client a long-term competitive advantage.

Using data from promo campaigns

Another way to leverage data for improving supplier relationships and terms is through marketing campaign reporting. After negotiating terms and launching a promotion, it is crucial to analyze how many products were sold, at what price, and how quickly the limited stock sold out. It is also important to track whether sales drop significantly after the promotion ends, as these declines are effectively part of the campaign’s total cost.

All of this data serves as a valuable negotiation tool with suppliers. If a product’s sales volume significantly increased, you may be able to negotiate a repeat campaign under even better terms. If sales did not improve as much as expected—especially compared to other suppliers whose promotions performed better—you can offer additional marketing support (such as internal banners, landing pages, product page optimization, or better positioning) in exchange for better pricing or direct co-funding for promotions.

Questions for the chapter Pricing, data, and supplier relationships

• Do you have an overview of which products your competitors are selling below your purchase price?

• What does your current summary of past marketing campaigns look like? How do you use this data in negotiations with suppliers?