Larry's Perspective — Distribution & Profitability

Why "We've Always Priced It That Way" Is Costing You

Ask most distributors how they set their prices and you'll get some version of the same answer: cost plus a markup, adjusted for whatever the customer negotiated a few years back. Nobody sat down and decided that was the right number today — it's just the number that's been there, and nobody's had a reason to question it.

The math nobody does

Here's what most people miss: because your costs are largely fixed by the time you quote a price, a small correction there doesn't add a little to your profit — it adds a lot. I've watched distributors tighten pricing accuracy by a few percentage points and see it show up as a far bigger jump in what actually lands on the bottom line. It's one of the only levers in this business where a small move produces a disproportionate result.

Every discount tier started as a decision someone made for a reason. Most of them outlived the reason.

How the gaps actually form

It's never one big error. It's a legacy discount set up for a customer who's since tripled their volume. It's a product priced to match a competitor who exited that market two years ago. It's your best, most loyal account still getting the rate they got when they were half the size. None of it looks wrong on any single invoice. It only becomes visible when someone reviews the whole pricing structure at once — which is exactly the kind of review most teams never have the time to do by hand.

The Takeaway

Pricing isn't a decision you make once. It's a decision that quietly ages, and it's worth revisiting long before a competitor forces the conversation for you.

This is exactly where a tool like Bubo.price earns its keep — not overriding your judgment, but surfacing the gaps that years of accumulated exceptions have buried.

Curious what a fresh look at your pricing might turn up? Request a free Profit Check — no obligation, built from data you already have.