Trade Spend

When 12 to 30% of supplier costs are monies paid to retailers in the form of trade spend it is critical to the supplier in terms of ROI and to the retailer in terms of revenue to know what constitutes effective trade spend.

Better management of trade spend through supplier/retailer cooperation via automated solutions improves outcomes for both. Suppliers are better able to calculate the profitability of product groups, to assess retailer compliance, to evaluate risk of current trade fund practices and to create partnerships with key retailers that drive volume, revenue and net profit. Retailers are better able to make informed decisions regarding promotions and pricing that improve profit, reduce cost, lower risk and encourage suppliers to provide more targeted trade fund support.

PBT’s Sector Specific Solutions automate both sides of the equation. With your team, we automate order-to-cash and procure-to-pay and processes by integrating data and documents to reduce the duration of your AR business cycles and enhance visibility into and accuracy of your AP business cycles.

“An industry rule of thumb suggests trade spend should contribute 1/10 of 1% to annual revenues. A $7B grocery chain, whose stores generally purchased individually accrued just $1M in trade promotion revenue - a $6M shortfall. How is your company doing?”

Executive Perspective: BPM Strategies to Address Trade Spend