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A client required an analysis of a specific product line containing several hundred sub-products within a master 250 product line catalog offering to determine the sales and square footage sold…

during a two year period by specific customers to negotiate purchase discount agreements from the vendor. The product line in question did not have uniform measurements and descriptions where not entirely obvious as to the measurement characteristics. Data resided in the general ledger and the buyer’s manual (a non-standardized document).

Action

We built a query to pull data based on specifications and exported those result to Excel where we constructed our analysis to identify sales and quantities by product description, which was then matched a table containing the specifications for measurements for each product – e.g. items were sold in a big and small box but the square footage for each product wasn’t always the same in the product catagoery.

Result

The outcome of the analysis documented enough evidence to work with the vendor to achieve price reductions of 2.5% to 7% based on volumes generated for future orders. As a result the client decided to run a promotion to spur sales, pass on savings and bolster the gross margin.

“Wise negotiators do research before making proposals. Never rush pricing agreements to shore up short range plans.”