How to make Product Price Adjustment Mechanism work for your business

Please see below a write-up of our experience of the different business models and how to make them work

Models you can run

The ProcureAnalytiq system allows you to set up different types of models and collaborate with suppliers and customers. Here are the models you can set up.

simple price mechanism

Agree a simple product price adjustment mechanism with your customer or supplier, tracking just 1 or 2 key feed-stocks or risks. It will reduce business risk and simplify the quarterly price adjustment process

complex price mechanism

A more complex product price adjustment mechanism can include multiple feed-stocks and risk exposure on both sides of the commercial relationship to ensure pain and gain are equally shared at all times.

full price mechanism

Product price mechanisms can include all elements of the price relationships, including rebate agreements, cost saving targets, financial risk, feed-stocks, etc. There are practically no limits to the creativity that can be applied

Procure Analytiq

DELIVER DIRECT MATERIAL SAVINGS

ProcureAnalytiq is an online cloud-based software tool to track market developments and leading indicators related the direct material purchases for your business. 

ProcureAnalytiq enables user to faster reaction to market changes, better negotiations, automated forecasting of material pricing, better internal and external communication, and ultimately reduces direct Raw Material prices.

Interested to explore more?  

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Introduction to price mechanisms

Use-cases of price mechanism tools

How to set up a price mechanism

Reduce Business Risk and Surprises

Agreeing a product price adjustment mechanism will reduce business risk without limiting opportunities for future improvements. 

eliminate key risk

Capturing key risk in a product price mechanism will limit the potential loss you may face

Better planning

A product price mechanism will give you short term view of likely price developments

Improved supplier relations

Indexing the key feedstocks of your raw materials will balance the relationship with your supplier and reduce your and their risk

Greater clarity

Greater awareness when a commercial relationship is out of balance

Reduced risk

Higher awareness of market developments will lead to better decision making

Improved customer relations

Taking some of the quarterly friction out of the price negotiation, and managing risk on both sides will reenforce the partnership model. And it will allow you to focus on the value-add int he relationship

Transparency

Transparent agreements and indexes will balance the relationship

Reduce risk

Manage expections and reduce risk for both parties. In the long run, it will differentiate you as a supplier