SUMMER 2019

24
THE DISTRIBUTOR’S LINK
Nelson Valderrama
Nelson Valderrama is the CEO of Intuilize, a software Service platform that specializes
in helping mid-sized distributors transform data into profits. With more than 22 years’
experience as P&L manager executive for major PE firms and industrial distributors.
Nelson has dedicated his career to help business uncover hidden competitive advantages
and unleash the power of data in the new Digital Economy. For more information
contact by email nelson@intuilize.com or visit www.intuilize.com
YOUR PRICING IS THE KEY TO UNLOCKING
FASTER GROWTH - PART 1
Imagine for a second that you had the opportunity
to step back five years in time and have dinner
with Jeff Bezos. You would probably pick his brain
about eCommerce or his vision for expedited worldwide
shipping…but Jeff might have another idea in mind.
What if during that very dinner, Jeff openly said to you,
“your margin is my opportunity”?
As Amazon gets ready to hit $20 Billion in revenue
this year, you’d be crazy not to be paying attention to
how they REALLY got there.
Now let’s imagine that while having dessert, Jeff
shared with you the chart below and asked you which
product segment you think his team should focus on,
based on gross margin?
Imagine source: McKinsey CPAnalytics
CONTRIBUTOR ARTICLE
Now don’t worry, this is not another article about
Amazon Business, this article is about you and what
you can do for your company. As owners, executives and
sales leaders all over our industry are thinking about
growth, they’re all hustling to get more customers or
sell more products to current customers, but very few of
them are leveraging pricing to improve their business -
which has the highest impact on growth.
So let’s talk about how YOU can maximize your
pricing power.
Pricing is the Proven Lever That No One is Pulling
Understanding the real opportunity in front of us is
as simple as comparing the outcome for businesses
when you increase 1% volume vs. a
1% increase in price. Luckily for us,
Harvard Business Review has done
the math for us back in 1992.
As you can see in the next
graphic on the next page, when
a growth strategy is only focused
on increasing volume, operating
profits increase by 3.3% (assuming
price remains the same). But if you
increase prices by 1% (assuming
the same volume), your operating
profit will increase 11.1%.
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