Blacksmith Applications, Inc.

Manufacturers are reporting that their volumes are down while pricing and discounting requests are up. The following questions provide some guideposts for thinking about how spending should evolve given the current climate:

Is our Field Sales organization spending money with the right customers?
When a distributor requests more discounts, how do we evaluate the request?
How do we analyze effective net price [base price less trade and operator reimbursements] for each distributor relative to other distributors, so we have a sense of where their price point stands compared to their competition?
What insight do we have into the discounted business with each distributor relative to their gross purchases in order to compare across distribution points to determine who represents 'true street' business?
How do we ensure that a request is both profitable and that there is available budget, without weighing down the process?

Does this sound like your business? What are you doing about it?

In This Issue

Convenience is Expensive

FORGE Version 6.0 Now Available

What Have Blacksmith Customers Saved?

Convenience Is Expensive

In our last newsletter, we talked about how "convenience is expensive" and how manufacturers could help protect against accusations of discriminatory pricing practices. There are ways you can protect yourself today through better business practices, including:

Clearly define who is eligible for each deal.
Communicate deals to the operator and include a clause that says you'll share with any distributor they authorize.
Ensure that deviated price offers do not convert your own business from one distributor to another.
Justify and document rationale for discounts, whether volume, competition, cost justification or another reason.
Conduct post-event analysis and use this insight in future offers.

Click here to access the white paper, "Convenience is Expensive: Five Ways to Protect Against Price Discrimination" to read more about implementing these best practices.

FORGE^SMVersion 6.0 Now Available

FORGE^SM Version 6.0 Supports Remote Approval Via Mobile Devices; Enables Manufacturers to Automate Analysis and Make Better Decisions with Less Effort

Key features in Version 6.0 automate key processes and analysis - such as freight-based pricing, volume forecasting, auto-payment of distributor programs and deduction matching - that enable manufacturers to make better decisions with less effort.

Mobile approval enables sales, marketing and finance to approve pricing, rebates and promotions via email on their Blackberry®, iPhone^TM and other mobile devices
Freight-based pricing tools to more simply support lane-specific, destination-based delivered pricing for national accounts
Improved volume forecasting simplifies calculations inclusive of billbacks, credits and direct-ship volumes, for more accurate, straightforward projections
Budget-based management tools to augment existing margin approval controls with authorization thresholds based on budget, committed and spent dollars
Settlement 'auto-pay' features to automatically create monthly and quarterly distributor rebates for approval, based on purchase volumes
"Match Central" utility to reduce time spent resolving deductions
New Flex technology search tools to simplify and speed searching

Gary Karp, Executive Vice President at Technomic commented, "This latest version of FORGE^SMpromises more efficient workloads for sales, deduction processing and others involved in trade processes. Greater efficiency is necessary at a time like this in order to handle the increased volume of discounts manufacturers are evaluating and processing given the economic environment. Customer responsiveness is always important but becomes even more vital when customers are pitting manufacturers against one another, and the features in version 6.0 help manufacturers' front-line representatives quickly evaluate opportunities and respond to customers."

Click for the Version 6.0 press release.

We can help you can navigate today's economy. Contact us today for a business assessment to identify savings opportunities and ROI and leverage best practices we've identified with our customers.

We'll talk more about protecting your organization, making better decisions and aligning your trade and pricing strategy with your business strategy in future articles. If you have any comments or specific topics you'd like to discuss, drop me a line at twefer@blacksmithapps.com or call me at 312-961-4501.

Sincerely,

Tina Wefer

Blacksmith Applications

What have Blacksmith's customers saved using FORGE^SMTrade and Settlements?

One client saves $2.5 million annually due to comprehensive billback validation, elimination of 'double dipping' and reduced shelter payments on national account volumes.

Another manufacturer saves about $4M annually, driven by eliminating and recapturing pricing deviations, reducing unauthorized deductions, more accurate brokerage commissions and reduced systems investment and maintenance.

A packaging manufacturer reduced spending by more than $1.5 million annually through better 'gross to net' calculations and saves $300,000 annually through less manual administration.

Click to see more customer savings.

Blacksmith Applications | 60 Island Street | Lawrence | MA | 01840