THE 5 PRICING BATTLES EVERY DISTRIBUTOR FACES RIGHT NOW

Tariffs test the strength of your pricing system. Five battles determine whether it bends or breaks.

Shelf Battle

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  What it means: When catalogs look identical, buyers shop line by line. Raise prices blindly and you hand the order to your competitor.

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  Example: Electrical conduit. Competitors test 5–7%. If you jump straight to 10%, you get cut from the bid. Hold flat while they move, and you leave margin on the table.

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  Lesson: Blanket hikes are blunt instruments. The shelf battle is won by knowing which SKUs bend and which break.

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  What to do: Move prices on low-visibility SKUs, defend benchmark items, and arm reps with category-specific proof points like raw material costs or freight impact.

Razor’s Edge

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  What it means: Thin-margin staples leave no room for delay. Tariffs turn profit into loss.

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  Example: Safety gloves at 20% gross margin. At a $10 cost, the selling price is $12.50, resulting in a profit of $2.50. A 25% tariff raises the cost to $12.50, wiping out all profit. Wait 30 days and you fund customer inventory.

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  Lesson: Delay adjusting, and your margin can vanish overnight.

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  What to do: Automate cost-to-price triggers, adjust weekly, not quarterly, pull non-price levers like terms or delivery guarantees.

Gatekeeper Battle

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  What it means: National accounts and GPOs control so much volume that whatever you concede to them sets expectations everywhere else.

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  Example: A GPO demands no increases. Cave, and reps echo it in every negotiation: “We did it for GPO, why not my top account?” One deal rewrites the playbook for dozens.

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  Lesson: Gatekeepers don’t just influence price. They dictate the rules your whole market plays by.

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  What to do: Define clear tiers of concessions, trade value-adds for price when possible, and train reps to keep exceptions from going viral.

Contract Trap

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  What it means: Existing contracts lock prices that tariffs made unprofitable.

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  Example: You signed a 12-month MRO deal with 2% cap. 10% tariff hits. You lose 8% per order but can’t raise without breaking the contract.

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  Lesson: Stable-time contracts become volatile-time handcuffs.

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  What to do: Audit contracts for escalation levers, and prepare three moves: absorb selectively, trigger hardship clauses, or propose split-the-pain renegotiations.

Bundle Bridge

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  What it means: Tariffs hit unevenly. High-turn items get pushback, spec items carry tolerance. Bundling connects them.

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  Example: Contractor balks at 12% on gloves but needs spec motors. If separate, propose packaging. If bundled, use motor dependency to spread increases.

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  Lesson: Bundles are trust levers, not gimmicks.

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  What to do: Pair sensitive with tolerant items, shift to total solution cost, prove fairness beyond margin protection.

Most distributors fight multiple battles simultaneously. Real leakage hides in the seams where they overlap.

Which battle is hitting your business hardest right now?