Manufacturing · Water systems
Distributor margin was set once and never revisited.
This marketing & margin audit surfaced $64k in recurring annual margin in a Manufacturing business, evidenced, senior reviewed, and delivered in 6 days.
The business
A water systems manufacturer applied a single fixed dealer discount across its entire catalog, from low value commodity fittings right through to complex engineered systems. The one rate approach was simple for the sales team to apply and had been in place for years, so the question of whether a flat discount made sense across such different product economics had never been raised.
What triggered the audit
The engineered range’s margin was persistently underperforming its design, while the commodity lines looked oddly generous, a pattern that points to a discount structure out of step with product economics. The audit examined discount against margin at the product level, testing whether one rate could sensibly serve the whole catalog.
What the audit found
A single discount rate applied to a catalog with wildly different margins was quietly redistributing profit in the wrong direction. The flat dealer discount, set once and applied to everything, took the same percentage off a thin margin commodity fitting as off a high margin engineered system. On commodity lines, where margins are slim, that discount was disproportionately generous and often erased most of the profit; on engineered products, it underrecognized the value the manufacturer actually delivered. In effect, the engineered range, the company’s most valuable, most defensible products, was subsidizing aggressive discounting on commodity items that competed largely on price anyway. Because discounting was governed by one blanket rate rather than product economics, this mismatch persisted across the catalog, costing roughly $64k a year in misallocated margin.
What we changed
Set discount tiers by product margin band instead of one blanket rate, so discounts finally reflect what each product can actually bear rather than a single reflex figure.
Protected the engineered range’s margin explicitly in the dealer price list, ending its role quietly subsidizing aggressive discounting on commodity lines.
Gave the sales team a margin aware discount matrix, so deals are structured around profitability rather than a uniform rate applied to everything.
Kept genuinely competitive pricing on true commodity lines where price matters, without letting that discount drain the high value engineered range.
The result
The outcomes were measured for three months after a 90 day implementation period. The published chart measures dealer margin on the engineered range, rising from 14% to 20%, a 6 percentage point increase; it does not describe one blended margin for the whole catalog. $64k a year recovered by matching discounts to product economics rather than one blanket rate, an annual figure equal to 11× the $5,950 Audit + Sprint fee. For any manufacturer, a single dealer discount felt simple, but it let thin margin commodities feast while the engineered range subsidized them. If you discount your whole catalog at one rate, your most valuable products are likely funding your least. It takes analyzing discount against margin at product level to see it. A fixed fee audit does that in days and hands sales a margin aware matrix that protects profit by default.
From kickoff to signed off findings: 6 days.
What the client said
$64k a year found in 6 days
Dealer margin on the engineered range: 14% → 20%
“One dealer discount across the whole catalog felt simple. Cristian set it against margin at product level: commodity fittings got a generous cut while our engineered range subsidized them. Discount tiers by margin band fixed it.”
Cristian BragauSenior Auditor · signed this audit off