MARGIN, PRICING AND PROCUREMENT
Margin rarely disappears in one visible event. It erodes through small concessions, each defensible, collectively significant.
Proven Professionals connects UK food and drink businesses with senior professionals who have set prices, negotiated trade terms and managed supplier costs.
Support is available on a project, fractional, interim or advisory basis.
Discuss your challengePRICING
Price architecture, price increases and the case presented to customers.
TRADE TERMS
Discounts, rebates and promotional funding, customer by customer.
PROCUREMENT
Ingredient, packaging and logistics costs, and the supplier terms behind them.
Sales are growing and profit is not. The margin on the price list and the margin achieved have moved apart.
Costs have risen, and a price increase has to be taken to customers who will resist it.
Supplier terms were set for a smaller business and have not been revisited.
Pricing. A review of price architecture across products, pack sizes and channels, and the evidence needed to carry a price increase through a customer negotiation.
Trade terms and cost-to-serve. What each customer costs after discounts, rebates, promotions and service, set against what each contributes.
Procurement. Supplier selection, contract terms and specification choices across ingredients, packaging and logistics.
The requirement is established first: where margin is being lost, and which decisions are within the control of the business.
A senior professional with direct experience of that area is then proposed. The scope is agreed before any work begins.
List margin is calculated from the price list. Achieved margin is what remains after retrospective discounts, rebates, promotional funding and settlement terms. The difference accumulates customer by customer and is rarely reported in one place.
With evidence. A retailer expects a breakdown of the cost changes behind the increase, notice in line with the supply agreement, and options. Preparation and timing decide the outcome more than the size of the increase.
Cost-to-serve is the full cost of supplying one customer: discounts and promotions, delivery, order sizes, service requirements and the time the account absorbs. It shows which customers are profitable.
Discuss your challengeThe Commercial Diagnostic is a written review of a food or drink business across five commercial areas, scored by a senior professional. £950, delivered in five working days.
See the Commercial DiagnosticRelated guide: How to improve margins in a food or drink business
Related guide: How to increase profit in a food or drink business
