Distribution
A pricing overhaul for a building supply distributor
Client
Cordell Supply
Service
Pricing and margin
Location
Salt Lake City, Utah
Cordell Supply sells lumber, fasteners and tools to contractors across Utah. Sales were growing, but gross margin had declined in three of the last five years. We reviewed profit by product and customer, rebuilt the price lists and trained the sales team to use them.
The challenge
Prices at Cordell had been set product by product over thirty years. Big contractors had negotiated deep discounts that nobody had reviewed, while small customers paid list price on items where list was far below the market.
What we did
Built a profit view of 4,000 products and 1,100 customer accounts from five years of invoices
Moved 900 slow, specialist products to new prices
Replaced eleven discount levels with four, tied to annual spend
Trained the counter and sales teams on the new quoting guide
The result
Margin rose 4.6 points in the first year and added $1.9M of gross profit. Cordell lost two accounts, both of which had been selling at a loss.
+4.6 pts
Gross margin
$1.9M
Added gross profit in year one
11 weeks
From kickoff to new price lists
The new pricing structure was simple for our team to use and improved our margins from the first month.
Ray Cordell
Owner
