A price agreed for a job that finished years ago
A rep agreed a sharp price on blocks for a builder's housing job. The job finished. The price didn't. It is still on the account, and the builder's other jobs are getting it too. Since then the block manufacturer has put prices up twice. Nobody notices until a margin report shows one account selling blocks for barely more than cost.
Look further and there are hundreds of special prices like it, set by reps and branch managers over the years, most without an end date.
Why specials drift
Special prices are a normal part of trade selling. The drift happens because merchant systems are good at applying them and poor at reviewing them.
- Specials are entered without an expiry date, or with one far in the future.
- Nobody owns each special once the rep who set it moves on.
- Cost increases load against the product, but specials fixed as a price do not move.
- Specials set for one job end up applying to the whole account.
- There is no report of specials by margin, only of sales.
What the forgotten prices cost
Margin leaks on the accounts and products you sell most. The leak is invisible in daily trading because the sale still goes through. It surfaces months later in a margin review, by which time the customer is used to the price and any change is a difficult conversation.
It also distorts how you judge reps and branches. An account can look like a success on sales volume while quietly earning very little, and the rep who set the price has no reason to revisit it. Meanwhile other accounts on standard bands carry the margin the specials give away.
A special price register that reviews itself
- Every special price is read from your merchant system into a register, with the customer, product, price or discount, who set it and when.
- Each special is given an owner and a review date. Existing ones without an owner go to the account's rep or branch manager to claim or let expire.
- Margin is recalculated whenever costs change, using the latest cost from your system, and specials below the threshold you set are flagged.
- Owners get a list before each review date with sales under that special since it was set, and choose to renew, adjust or end it.
- New specials are requested through a short form with a reason and end date, approved by the level your rules require, and written to the merchant system.
- A monthly report shows specials by margin, by owner and by age, including those that have not been used.
| Special price problem | Register response |
|---|---|
| No end date | Review date required on every special |
| Owner has left | Reassigned to the account's rep |
| Cost has risen | Margin recalculated and flagged |
| Set for one job | Job reference and end date recorded |
| Never used | Listed for tidying up |
How far specials should go, and when to renegotiate, are commercial decisions for your sales team. The register makes sure those decisions are made on current numbers.
How the sales team works afterwards
Reps review a manageable list of specials each month instead of none at all. When a cost increase lands, the specials it affects are known the same day. New specials come with a reason and an end, so they don't become permanent by accident. The margin review stops producing surprises.
Signs your specials need a review
- Many special prices have no end date.
- Nobody can say who agreed some of them.
- Specials are not reviewed when supplier costs rise.
- Some accounts sell near cost on common products.
- Your special price list is too long for anyone to read.