What each product really earns
Illustrative figures.
A supplier of household and personal-care products sells six products to five grocery chains, Retailer A to Retailer E: 2.2 million cases and 56.6 million euros of invoiced sales in the year. Every off-invoice term sits on the products each customer bought.
The headline
Laundry capsules bring in the most invoiced sales and keep the smallest share of list price: 78.4% after every term. Their margin is 14.1% of net-net, against 28.5% on hand wash.
From list price to net-net, product by product
| Per case, EUR, unless stated | Laundry liquid1.5 l | Laundry capsules30 pack | Dishwasher tablets40 pack | Washing-up liquid900 ml | Hand wash500 ml | Shower gel400 ml | All productstotal / average |
|---|---|---|---|---|---|---|---|
| Cases sold, thousand | 405 | 389 | 300 | 520 | 299 | 287 | 2,200 |
| Invoiced sales, EUR thousand | 12,246 | 13,621 | 9,916 | 8,574 | 5,924 | 6,312 | 56,593 |
| List price | 33.00 | 38.00 | 36.00 | 18.00 | 21.60 | 24.00 | 28.02 |
| On-invoice discount | −2.76 | −2.99 | −2.95 | −1.51 | −1.79 | −2.01 | −2.30 |
| Invoiced price | 30.24 | 35.01 | 33.05 | 16.49 | 19.81 | 21.99 | 25.72 |
| Volume rebates | −1.06 | −1.31 | −1.19 | −0.57 | −0.70 | −0.77 | −0.92 |
| Promotion funding | −1.49 | −2.56 | −1.85 | −0.51 | −0.65 | −0.76 | −1.29 |
| Display and marketing fees | −0.40 | −0.73 | −0.56 | −0.17 | −0.23 | −0.26 | −0.38 |
| Payment terms and other | −0.50 | −0.60 | −0.55 | −0.27 | −0.32 | −0.36 | −0.43 |
| Net-net price | 26.79 | 29.81 | 28.90 | 14.97 | 17.91 | 19.84 | 22.70 |
| Net-net, % of list price | 81.2% | 78.4% | 80.3% | 83.2% | 82.9% | 82.7% | 81.0% |
| Off-invoice terms, % of invoiced price | 11.4% | 14.9% | 12.6% | 9.2% | 9.6% | 9.8% | 11.7% |
| Cost per case | −21.80 | −25.60 | −23.50 | −11.30 | −12.80 | −14.50 | −18.04 |
| Gross margin per case | 4.99 | 4.21 | 5.40 | 3.67 | 5.11 | 5.34 | 4.66 |
| Gross margin, % of net-net | 18.6% | 14.1% | 18.7% | 24.5% | 28.5% | 26.9% | 20.5% |
| Gross margin, EUR thousand | 2,023 | 1,638 | 1,619 | 1,911 | 1,526 | 1,532 | 10,249 |
Each customer’s margin, before and after its off-invoice terms
All customers: 29.8% on invoice, 18.1% after all terms (20.5% of net-net, as in the table).
What the figures say
Terms differ by product
Off-invoice terms take 11.7% of invoiced sales overall: 9.2% on washing-up liquid, 14.9% on laundry capsules.
The biggest account ranks fourth
Retailer A leads on margin at invoice, 32.0%. After all its terms it keeps 16.4%, behind Retailer D, which starts at 26.0% and keeps 21.3%.
Every term has a home
Every euro of the 6,642 thousand in off-invoice terms sits on a product and a customer, so the next price round can start from net-net.
Key tables export to Excel with their formulas. Illustrative figures. Volume rebates and payment terms are spread over each customer’s products by invoiced sales; promotion funding and display and marketing fees sit on the product they were agreed for. Cost per case is cost of goods sold.
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