Brian Beck on Pricing Strategies to Manage Channel Conflict in B2B Commerce

Ecompromo | June 26, 2020 | Web Marketing

This post is an excerpt from Brian Beck’s Billion Dollar B2B Ecommerce: Seize the Opportunity, available now

Channel conflict is largely centered on product price

When a manufacturer or brand sells directly to the end user of the product, they always have more overall margin to work with. Manufacturers have the ability to sell products at a lower price, as they can now capture the “retail” profit margin on the product.

The power to disintermediate is the central underlying factor that defines channel conflict, and must be managed by manufacturers and distributors alike to avoid alienating traditional reseller channels.

Resellers are often responsible for a very large percentage of a manufacturer’s revenues, and this must be respected. In addition, many resellers add real value to the end customer — thus a balanced approach is necessary.

5 key questions to ask regarding your pricing approach

  • What “retail” or resale price (the price paid by the ultimate user of your products) has the market supported over the past two to three years for your products through each resale channel?
  • What are the pricing trends in each resale channel?
  • Based on pricing history and trends, how much overall margin do you have to work with–your cost versus the …read more

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