6 Ways to Protect FoodService Distribution Margins with Flexible Pricing

Dave Foreman

With slim margins that are perpetually getting tighter, foodservice distributors need to continue to protect their margins through a variety of means. One key way to protect margins, is flexible pricing methodologies within modern technology solutions, like Prime FoodService Software.

See a Real-World Example of Pricing Management in Prime FoodService Software here:

 

Track Margins In Real Time

In the Prime FoodService Sales Order screen, you can constantly track margins on a line-item basis as well as from an order basis. This allows foodservice distributors to sell items at a lower price than set as long as the overall order meets the organizational standards.

Maximize Margins with Catchweight Management

In Prime FoodService, you can manage catchweight items. Just because you buy by the case, does not mean that you need to sell it that way. You can set a base unit for each item. Distributors can also use a price adjustment multiplier if a customer’s order requires that you break a case.

Make the Most of Your Sales Cost Method

A key way to protect your margins is by setting the most advantageous Sales Cost Method for each item. Prime FoodService Software lets you choose from:

  • Market Cost
  • Last Cost from a PO
  • Average Cost
  • Greater of Market / Last Cost
  • Greater of Market / Avg Cost
  • Greater of Last Cost / Avg Cost
  • Set a Standard Sales Price

Adjust Your Costs with Agility

Setting a cost adjustment can help account for things like marketing or warehousing costs that can be reflected as a fixed dollar amount or a percentage.   

Additionally, foodservice distributors that import goods, Prime FoodService has a great system related to landed cost; allocating out, freight duty, insurance, all the types of costs that might be necessary to get your products from their country of origin to your docks. You can track the landed cost of an item to its sales cost with a single click.

Maintain Your Margins with Floor and Ceiling Guides

In order to catch and prevent key-punch errors, you can set a bottom and top boundary for your Gross Margin, Sales Cost, Market Cost, and Last PO Cost percentages.

Set Pricing by the People You’re Selling To

In Prime FoodService Software, distributors can set up a price basis (whether it’s a price, cost plus a dollar amount, gross margin percentage, cost plus a percentage, or a default) by customer, for a customer class, or by a customer price class.

Likewise, you can run promotions leveraging different date ranges for a specific customer or customer class.

 

Learn More about Prime’s Flexible Pricing in this On-Demand Webinar