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What is Trade Revenue Management?

Aug 6, 2018 12:15:00 PM

Trade Revenue Management (TRM) has fast become an essential business growth strategy for the supply chain. In the first of two blog posts, we discuss and define the concept of Trade Revenue Management.

What is TRM?

In short, Trade Revenue Management (TRM) is a term coined for managing activities across the supply chain related to trade revenue, i.e. the money earned from the sale of goods and services to customers and vendors and how it can be better managed to maximise profitability and business growth.

Examples of trade revenue disciplines include (and are not limited to) Price Management, Promotion Pricing, Rebate Management (Vendor Rebates and Customer Rebates), and Claims and Deductions.

What’s the big deal about TRM?

The demand for Trade Revenue Management is growing faster than ever as a result of supply chains with tight margins and an increasingly competitive marketplace. Every dollar needs to be accurately accounted for.

Manufacturers, Distributors and Retailers are constantly striving to differentiate themselves and do more with less resources, to create greater customer loyalty and more accurately manage their costs. The management of increased revenue by retailers provides greater leverage with manufacturers, and both are struggling with legacy systems, multiple sources of prices and the breakneck speed of change.

A Trade Revenue Management solution therefore allows businesses across the supply chain to better manage and execute trade revenue related activities by employing user friendly software to manage everyday pricing, promotional prices and rebates to optimise their revenue.

How have supply chains been surviving without TRM?

While TRM solutions have been around for many years, many companies have been simply missing out on the opportunity supercharge their pricing strategy.

In their panic to preserve margins, many supply chain companies have reached out for what they believe has been their only option - the trusty spreadsheet for developing multiple bulky and inflexible price lists without real time information and any form of auditability, disconnected from their core systems.

When it comes to ERP solutions, the existing built in pricing and promotion capability also isn’t designed to handle the complexity that a TRM solution is capable of.

So what are the actual benefits of TRM solutions?

Trade Revenue Management solutions are helping supply chains to achieve solid bottom line results. Highly advanced technology is capable of handling complex pricing calculations with speed and accuracy that was previously unachievable. Customers who have deployed TRM solutions report amazing ROI as a result of the following benefits:

  • Instant, accurate pricing calculations in real time
  • Simplified and highly profitable Vendor and Customer rebate programs
  • Eliminated pricing admin tasks meaning staff productivity gains
  • Flexible configuration options for promotion pricing allowing more profitable trade promotions
  • Automated accurate settlements and accruals process ensuring accuracy
  • A single source of pricing truth leading to improve efficiency
  • Reduced revenue leakage meaning increased profitability
  • And much, much more

Are TRM solutions suited to any type of business?

Any type of supply chain business that is managing complex pricing, executing promotion pricing, and/or managing vendor or customer rebate programs needs to deploy a Trade Revenue Management solution.

A best of breed TRM solution will offer the flexibility to suit any existing technology infrastructure, with the option to either implement it as a standalone solution, or as an integration with your existing ERP solution.

While Trade Revenue Management has become a standard and pivotal requirement for effectively managing revenue across the supply chain, there are few solution providers. Flintfox is the thought leader and only true provider in the TRM space.  Why not contact the friendly TRM experts at Flintfox and ask to see a demo?

In our follow up post, we’ll explain the differences between Trade Revenue Management and Trade Promotion Management (TPM).

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