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White Cup Pricing Achieves 5.7% Margin Growth for HVACR Distributor

A nationwide chain of wholesale distributors serving HVACR contractors Increased Margin Dollars by 5.7% with White Cup Pricing.

white cup pricing for hvacr distributor

Background

This wholesale distributor is a wholesale distributor serving professional HVACR contractors. The company has the largest selection of equipment and genuine OEM parts in the industry. Their core mission—making it easy for the HVACR contractor to do business—emphasizes product selection, availability, and eCommerce.

Acting on a recommendation from headquarters, the business sought to modernize and automate pricing to improve customer service and profitability across its five locations.

Inconsistent Pricing impacted Margins and Productivity

“We never had any consistent pricing,” related the business’s CEO. “Everything’s been on a matrix that was never maintained. It was a complete disaster.” Often, sales would override prices from the matrix, and managers thought they had A customers who were really D customers.

Dealing with customer calls and pricing issues also took valuable time away from other important business activities. “It was consuming at least two hours a day,” reported the CEO. “Managers were calling us, and then we had to research the products and look at the history of the price. It just was a mess.”

White Cup Pricing for HVACR Distributor Explored

The business looked at two other potential pricing solutions but considered them unsuitable. “One was too clunky of a program,” reported the CEO. “So, we didn’t use it.”

The distributor’s CEO spoke to other groups in their parent company and received positive reports about White Cup Pricing software. The distributor then worked to understand how and where White Cup Pricing would fit, deciding to move ahead.

“The number one reason we decided on White Cup Pricing is that corporate recommended the product,” stated the CEO. “That’s the blessing we look for to move forward with certain new vendors.”

The distributor called a few other branches and asked how the White Cup Pricing software worked for an HVACR distributor. “Every one of them said it’s been working great for them,” reported The CEO. “So, we did some homework on our end before jumping all in.”

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Solution

Customer Cleanup

Beginning in May 2021, The business prepared for the White Cup Pricing installation by updating records in their Epicor Eclipse ERP system. “We had to do a lot of customer cleanup on our side to get ready to implement White Cup Pricing,” reported The CEO.

When ready, they provided remote access to White Cup engineers to install the software and set up the interface to their system. “They did most of the work themselves,” explained the CEO.

Fortunately, The business’s support engineer at White Cup came from an Eclipse background and understood the ERP system. “I think it’s important going forward working with other branches that whomever White Cup has in place is familiar with their software,” added the CEO. “Because there are folks on different ERP systems out there.”

Training and Setup

The White Cup Pricing installation and training proceeded smoothly. “Training was done through Zoom calls, and it was great,” reported the CEO. “No need to have people fly out. So, we saved money there.”

Starting in October, The distributor spent a few months setting up ABCD pricing levels based on volume, history, and returns. “We changed many of those A customers and moved them to D,” explained the CEO. “We saw that we were leaving a lot of money on the table.”

World-Class Segmentation

White Cup Pricing features enabled the distributor to build their customer segmentation based on similar profitability, buying power, and cost to serve characteristics that support the concept of “like customers buying like products, should pay a similar price.”

The White Cup Pricing approach analyzes sales history to create minimum and maximum ranges, a statistical floor and ceiling, and a target price. This allowed the business to find profit and sales, building opportunities quickly. White Cup Pricing reports show that the company created 3,693 price records in addition to all new customer and product segmentation.

Support Like Family

The CEO praised the support the business received during the implementation and since. “The White Cup Customer Success Team has done a phenomenal job for us,” he reported. “We call or email, and they get right back to us. Great service is a big thing that I like. We’re like a family, and White Cup provides that service.”

Results

white cup pricing software for hvacr distributor

Increased Margin Dollars 5.7%

After five months, White Cup Pricing reports show that the business added a six-figure amount to YTD margin dollars, a 5.7% increase, due to consistent pricing and correct customer classification.

“Our margins have increased at least 5% with consistent pricing using White Cup Pricing,” stated the CEO. “That’s huge for a company our size. We’ve been leaving a lot of money on the table. With five locations, we’re looking to grow, and we want to grow with White Cup.”

Saves 2 Hours Per Day

The distributor reports that White Cup Pricing saves at least two hours daily for key personnel due to reduced customer pricing issues. “I don’t think we’ve had a call from a manager since we completed this,” confirmed the CEO. “We have the same amount of staff, but now we can focus our energy on other things.”

With customers classified correctly, billing issues have also decreased. “At the end of the month, when they send out the statements, there would be questions related to customers getting different prices from different stores,” explained the CEO. “I haven’t had that issue either.”

The CEO also reports that the accounting side of the business has improved 100% along with customer satisfaction. “Sales have increased,” he says. “Nobody’s complained that they’re paying higher prices. Customers like the price consistency.”

Reduced Dead Stock

White Cup Pricing segmentation enables the distributor to break out product categories and what they need to stock. “It helps us with our inventory and all the way around,” reported The CEO. “It’s an eye opener watching our products and what we’re ordering because we can see what’s not moving.”

“We’ve increased our product knowledge. We can see our margins by product, and we can see what it costs to serve every single customer.”

Keeping an eye on the shifting economy, the CEO watches what the company spends and stocks less inventory. “White Cup Pricing has opened our eyes,” he says. “We’re ordering what we need and using our DCs to stock our product instead of just bringing out a ton of stuff here in our distribution center.”

Extra Profits and Smiles

It all adds to a brighter future and a big step up for the business. “I would recommend White Cup Pricing to anybody looking to streamline their processes for products,” concluded the CEO.

“This has been a great partnership, and we want to continue it. The company as a whole is benefiting because now, we can reinvest the extra profits into our business or the employees. It puts a smile on my face.”

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