Special Pricing Agreement (SPA) Management
Take control of the rebate process to improve efficiency and profitability.
Manufacturers offer Special Pricing Agreements (SPAs) to distributor partners to support a wide range of end-customer and situational market needs. SPAs have become widely utilized due to their ability to provide pricing flexibility to earn large contract business. With the popularity of SPAs, manufacturers must originate, administer and manage thousands of unique SPA agreements across their distribution channel. Because of the large volume of agreements and sizable discounts offered, SPAs can sometimes be the costliest part of manufacturers’ revenues if the process is not properly managed.
SPARXiQ collects and analyzes data from vendor special price agreements, rebates and cost supports using proprietary algorithms and delivers recommendations through RebateGPS™. It’s specifically designed to help manufacturers revolutionize their SPA/rebate administration and management.
Reduce processing costs associated with creating and maintaining SPA records
Eliminate financial losses due to miscalculation and reduce discrepancies
Enable sales growth, increased profitability and more accurate forecasting
The cumbersome task of creating and administering SPAs takes away from both manufacturers’ and distributors’ ability to evaluate the business opportunity, the volume, or even the negotiated price points for each agreement.
To ease the creation process, the shared RebateGPS™ platform provides a simple process. With both parties accessing the same record in the same interface, details including volume expectations and price commitments can be mutually agreed to. The result is a shared system of record that contains documented pricing which then can be updated with contact and contract updates. And, when it’s time for pricing and performance reviews, the data is readily available.
To keep things simple, many manufacturers calculate distributor rebates based on replacement cost, paying the difference between the contract price and the current into-stock price. Unfortunately, this can lead to the manufacturer paying higher rebates in situations where there is a price increase, stock is moved, or products are sold at promotional levels. For many manufacturers, this can add up to a 3% to 5% overpayment of rebate liability.
RebateGPS™ maps all rebate claims to stock orders, allowing you to calculate rebates based on actual acquisition cost rather than replacement cost. Doing so not only ensures that your rebate is calculated against the true price the distributor paid for the item, but also avoids double claims for items.
Monitor & Improve Performance
Special Pricing Agreements are granted with the expectation that they are necessary to drive sales. However, without the right tools, SPAs can be mismanaged or not managed at all. As a result, many manufacturers find themselves inundated with thousands of SPAs where they have no assurance that all of the product discounts are even necessary.
RebateGPS™ provides the reporting necessary for manufacturers to assess SPA performance versus expectations, correct wasteful discounting, and optimize price and volume relationships. To make the process seamless and efficient, the system shows all underperforming SPAs along with actionable recommendations for correcting over-discounting.
Want to learn more?
Download the RebateGPS™ technical brochure for more information.