Managing Exception Pricing- Not An Oxymoron
Sounds like an oxymoron, doesn’t it? It is probably the number one issue that causes mistrust, conflict and legal issues between a manufacturer and channel partners. This article is not intended in any way to be a discussion of what is legal, ethical or the ‘norm’. This is about managing exception pricing within the channel.
Let’s define the term Exception Pricing as non-standard, discount from published pricing, or as the dictionary states “ something excepted; an instance or case not conforming to the general rule.” I’ll take it one step further. Exception pricing is given to a select partner(s) or customer(s).
This assumes a couple of points:
1. There is a ‘general rule’ which means the starting point is standard, published pricing, for purposes of this discussion.
2. Exception always means a discounted, lower price.
3. These variances can be managed fairly, legally and consistently.
There are some legitimate reasons for exception pricing of course.
* Large volume purchases
* Product clearances
* Public bids
* Competitive pressure
* Customer loyalty programs
* Cost to serve
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