Brexit: Pricing & Margins

Saturday, December 31, 2016

One of the joys of working at Measure Metrics is that we get to work with some very smart CEO’s, CFO’s and their senior management teams. Almost without exception their most vexatious problem in 2H16 has been pricing and margins – how to best set the new prices and how to make sure that the new margins are being delivered in full within the business. Very challenging, but very interesting too.

Having been through a significant period of low or zero inflation in the UK economy it is a bit of a shock to (a). find that the cost of a container of goods from China has suddenly gone up by 15% and (b). that the ongoing cost of running the business itself in 2017 is likely to rise significantly also.

In 2H16 we have been doing much data and price modelling with clients to try and understand how much prices need to increase.  For each client the assumptions are so different – how much is imported, how much is exported, what are the stock levels, where are future exchange rate movements going to be, how are the Brexit discussions and the new Trump-America going to affect things……

So many assumptions to consider – and then there are decisions on just how to deliver those price increases within the constraints of a whole range of legal, custom & practice and industry arrangements. Simple price increases – on certain lines or across the board? Currency surcharges on product lines or at sales invoice level? Reduced discount levels?  Or a complex combination of all?

Last but not least – and this will be a business trend into 2017 – monitoring those margins.  Monitoring needs to take place at product/line level, at sales invoice level and at the business unit level.  Monitoring too of operating costs as suppliers to the business make their pricing decisions felt also.

With Jet Reports – both Professional and Enterprise – our clients have found that they have a very flexible and powerful tool with which to build their new data-pricing models and then to report back to the business. Some great new reports have been built which, coupled with the Jet Scheduler, will be in all the appropriate managers’ inbox at the start of every morning or every shift telling them exactly where they are with unerring accuracy.

With Measure Metrics our clients have found a level of interest, experience and expertise that they have been able to draw upon. Every business has been different, even within the same industry, and we have encountered many situations where we have engaged proactively in the pricing and margin decisions being made.

Interesting times.  If you have Jet Reports and feel that our expertise at Measure Metrics can help your business we would love to hear from you.  Please feel free to contact us here –  Contact us

With our very best wishes for a successful and prosperous 2017.