TLDR

• If you manage pricing on Excel spreadsheets and email them back and forth, you are in the Stone Age.
• Modern pricing platforms outshine Excel in many aspects. They offer significantly enhanced accuracy and speed, superior version control, and ensure state-level compliance. These platforms are the key to unlocking wineries' full potential, and they pay for themselves quickly.

The good is the enemy of the best

This saying from Jim Collins’ 2001 book Good to Great poignantly indicts the state of most wine and spirits companies' preferred method of managing pricing: static spreadsheets that must be emailed back and forth. 

Even if you utilize shared drives and shared spreadsheets (i.e., Google Docs and Google Drive), you are still rubbing two sticks together to make a fire when you could be using a blowtorch.

Even on their best days, dealing with the 3-tier pricing models is complex and varies from state to state.

Collecting, aggregating, and reporting distributor pricing for each state is daunting. 

The most significant factors to consider in managing your pricing are:

1. Version control (must have only ONE version of the “truth”)
2. Approval process (manual = time-consuming and fraught with errors)
3. Processing billbacks (including the verification of the charges should be done accurately and quickly)
4. Updates and changes (must be done quickly and accurately in real-time)
5. Visibility (inside your company and with distributor partners)
6. Accounting for the cost of sampling programs (complicated to do this manually)
7. Tracking of incentives and their ROI (including robust post-promotion analysis) 
8. Meaningful and actionable reports (backed by real-time data and insights)

There’s just no way Exel can do these things well! It’s 2024, after all. There is a much better way to do all of this!

How to stop “value leakage”

Given the competitive nature of the current sales environment, few can afford to have “leaks” in either their cost or revenue side of the financial equation.

Seeing the full financial impact of your pricing and promotional spending used to be complicated, but thanks to technology, it no longer is. 

How does this happen? In a word: visibility. With visibility comes control. Seeing the actual spending and pricing data, from finance to sales, all in one place literally pays for itself many times over.

When you centralize and automate the entire pricing and promotion management cycle, you effectively stop value leakage in its tracks.

Imagine constructing profitable promotional models at any level (supplier > distributor > and retail shelf)! 

The 1990s called: they want their pricing tools back

If you are still emailing Excel spreadsheets back and forth between your internal departments and your distributor partners, you are stuck in the 1990s. Excel was certainly the preferred tool at that time.

Excel is a powerful tool, no question. However, it pales compared to modern pricing platforms explicitly created for the adult beverage industry. 

If you are reading this article and currently using Excel as the primary way to manage, share, and update your pricing, you owe it to yourself to look at the modern options.

Some might ask if they can afford to adopt modern pricing software. The more important question is whether you can afford not to.

The right tool for the right job

If you connect the fire hydrant on your street to your house's plumbing, you’ll quickly find all the leaks and weak points.

The same goes for your pricing. Excel can’t handle the “pressure” and complexity for all the above reasons.

The same goes for shared drives like Dropbox, Google Drive, and Microsoft OneDrive. The key is to match the right tool for the job, which will take your game to the next level. 

If you want to fully manage your pricing across your entire portfolio and your entire distribution network, and you want to do it quickly and accurately, here is a checklist of features you will need:

• An easy way to collect, aggregate, and report on your current pricing in real time.
• The ability to collaborate with ALL your distribution partners’ systems in real time.
• An easy, seamless approval process for price changes. 
• 100% confidence that everything is accurate.
• The ability to publish your data to all stakeholders (internal and external)
• Connect all 3 tiers (supplier - distributor - retailer) seamlessly.
• Receive daily pricing updates.
• “Push” reports are automatically distributed to those who need to see them.
• Precise version control - one source of all truth. 
• Retailers receive the pricing information electronically in the form they require. 
• Integration with your space management system.

It is possible to have a system with built-in efficiency and centralization! 

Pricing for all three tiers working in harmony

Each tier in the system wants to optimize its profit. When done correctly, all three tiers benefit (not just 1 or 2).

What throws everything out of whack are changes.

It’s managing the myriad of factors (including operating costs, production costs, taxes, shipping costs, etc) that “breaks” any system relying on Excel spreadsheets.

Because pricing factors constantly shift, pricing management is fluid and ongoing. It’s the furthest thing from setting it and forgetting it. 

Failure in any part of this shifting landscape has a very negative effect on profit margins. 

Suppliers might update their pricing for any number of reasons, including new releases, a review or score, and label or package changes. 

Without the proper tools to automate and streamline “full-cycle pricing management,” it becomes impossible to coordinate across all internal and external stakeholders. 

But the worst part is money flying out the door through thinner profit margins. 

Join the digital age of pricing management

Systems exist now to accommodate all the factors and changes necessary for a successful (and profitable) three-tier pricing strategy.

Moving from the Stone Age to the Digital Age is all about saving time, stress, and dollars.

Keeping a healthy profit margin and maintaining successful programs can be challenging, no matter how many cases of wine you sell each year and how many markets you serve. 

However, using the right tools can help eliminate the guesswork involved in serving your markets and making profits, allowing you to focus on other aspects of your business.

If you’d like to learn more about moving from the Stone Age to the Digital Age, click here to schedule a free consultation and assessment.