According to BI Intelligence - a premium research service, the U.S. retail growth rate in the first half of 2016 was just 2%, it was 16% for e-commerce.
While the majority of retail sales still occur in-person, e-commerce sales are growing at a far more rapid rate. For Distributors of Foodservice and JanSan Supplies this is a warning light, with many distributors still employing manual processes to compete for sales.
Rebates are a good example of where Distributors can implement rebate software to help win the fight against the likes of big e-commerce retailers like Amazon.
Within rebate software, trade agreements represent the terms and conditions of a discount that is paid after the purchase of a product. These agreements provide a great deal of flexibility for vendor rebates and have the power of built-in accrual, tracking and reporting of earned rebates.
With access to the applicable rebates on offer, and potentially other add-ons and discounts, your Sales team will be able to offer more competitive pricing as the order is being placed. For companies that set selling prices frequently at the time of order, this is a big advantage. It also has the added benefit of helping your Sales team to understand and protect your true margins when trying to match a price for a customer. When placing the order, they’re able to apply rebates freely without it adversely affecting your margins.
Some rebate software solutions have customer side rebates that may offer benefit for more progressive distributors, especially as the market changes. With the entry of the major online competitors such as Amazon, some customer side “offers” may become a better means to setting the sell price.
Customer rebates are often necessary for Distributors of Foodservice and JanSan Supplies to earn a customer’s business. However with manual processes and Sales team setting the sell price at the time of the order, Distributors will think they are selling close to purchase order cost but end up with net cost lower than the selling price. Rebate software gives Distributors the visibility they need and the flexibility to control what type of rebates are offered and when.
Rebate software also allows Distributors to set the sell price as price minus rebate, where the customer would see the rebate as an earn-through offer based upon the trade agreement with the Distributor. This could have the potential to eliminate or reduce some of the price guarantees, as instead the end customer would see the benefit from a portion of the vendor rebate. Therefore, when a vendor cost increases, the sell price would increase, but the rebate could be visible keeping the customer more aligned with the Distributor and the benefit of rebates.
With the likes of Amazon changing its prices throughout the day, Distributors of Foodservice and JanSan Supplies can no longer afford to give customers price guarantees.
For the above points to be truly effective in the battle against big e-commerce retailers, Distributors need to be able to connect their rebate software with their Enterprise Resource Planning (ERP) system. It is a big advantage for businesses to be able to track the last sales invoice or quote price and cost all in the one system. With the Dynamics 365 ERP, there are rebate software providers who are able to integrate directly with the ERP. Distributors will have instant access to the information they need without having to go in and out of different applications.