Tighten your seat belt!

How can I keep my margins whole when average cost estimates don’t work anymore? A FOB pricing strategy won’t work in times of volatility. Because FOB price is based on annual averages and the volatility of fuel costs from month to month is out of control, this can really hurt manufacturers’ margins. To make up for this, manufacturers sometimes remove FOB and invoice at the price that makes sense at the time. This is only possible with a view to costs in real-time.

For example, manufacturer contract price negotiations with distributors may include removing FOB and looking at month-to-month costs for transportation. In another scenario, the manufacturer may give the distributor the option to pick up the product instead of shipping it. 

Now, when you negotiate a contract, you need a clear view to all cost components to control the dead net.

Your challenges include:

  • No Controls: Margin Wholeness Negotiation
  • No Compliance: Volume Incentives and Cost Negotiations
  • No Controls/Compliance: One-off Deals and Exceptions

You need to gain control of:

  • Manual processes that make this more difficult
  • Margin thresholds and the impact of volume tiers that coincide with pricing
  • Margin erosion as it relates to real-time costs

Cost Roller Coaster &
Keeping Margins Whole

Keep your
eyes open

The proof is in the
pudding or the margins

Peeling back
the onion

The Tangled Web of
Complex Markets

The heat 
is on

The dominoes
are falling

Palatable management
of complex markets

Labor Wading Pool:
Manual Processing

It takes
the cake



It’s a
new day