“End-to-End” Pricing: steer value sharing between players
Key takeaways:
Value is either managed or lost
Not measuring the margin captured by your distributors is like steering your commercial relationship blind. Without this visibility, a manufacturer is exposed to a gradual erosion of profitability and negotiating power.
Data is the arbiter, even when imperfect
Without exploitable data (sell-in prices, sell-out prices, actual and expected), decisions are based on incomplete signals. Waiting for perfect data means not acting; it is better to have imperfect but utilized data than an unattainable ideal.
A dashboard for action, not observation
Data only creates value when it feeds an action-oriented dashboard. For management, it clarifies trade-offs and drives performance; for sales teams, it objectifies negotiations and aligns execution with strategy.
Without adoption, there is no impact
A tool only has value if it is sustainably adopted. Co-constructed with teams, supported by structured change management, and anchored in clear governance, it must evolve with usage to support performance over time.
Between manufacturers and distributors, the issue of value sharing is far from straightforward. Depending on the sector and channel, the distributor’s gross margin can be less than 5%… or exceed 60% of the final price. On the other side, the manufacturer’s margin varies from 15% to as high as 80% in sectors like luxury and pharmaceuticals (1).
In other words: for a given product, dozens of margin points can switch sides, and this sharing evolves with commercial negotiations. This distribution, when not managed, mechanically and insidiously fuels fantasies, misunderstandings, and, ultimately, commercial tensions.
Value sharing: the silent arbiter of the manufacturer-distributor relationship and a lever for performance
For a manufacturer, value sharing is too structural to be ignored and, therefore, left to chance or the history of negotiations.
Too much margin left to the distributor? The relationship appears unbalanced, and the manufacturer’s profitability erodes, especially since promised volumes do not always materialize. In the long term, the risk is clear: seeing a growing share of value migrate outside its scope, while retaining the bulk of industrial and marketing investments. In this context, the temptation to distribute directly or reorganize one’s channel mix becomes almost mechanical.
Not enough margin left to the distributor? The relationship becomes tense, volumes stagnate, the distributor disengages and does not promote the products as expected. The manufacturer’s share of the distributor’s sales declines, especially when the brand is not strong enough to generate natural demand and compensate for this lack of economic incentive. The distributor is tempted by vertical integration or, at the very least, by shifting volumes to more profitable manufacturers’ products.
The margin conceded by the manufacturer and its evolution thus become true instruments of its commercial positioning: accelerating market penetration, defending value, supporting a key channel, or accompanying a priority market.
Furthermore, in practice, many organizations often struggle less with defining their strategy than with applying it and keeping it under control over time. So a question arises:
As a manufacturer, how can you concretely manage and exploit value sharing with your distributors, on a daily basis and at a large scale?
Data, the starting point for all management
Any serious management of value sharing begins with a simple… and rarely respected prerequisite: having reliable data on the economic reality of transactions.
Internally, this means going down to a fine granularity – ideally product × customer × month – and above all, thinking in terms of the actual sell-in price paid: standard invoice discounts, promotions, deferred rebates, exceptional commercial gestures, and free products. Without this “net-net” vision, the company operates on theoretical sell-in prices, disconnected from the field.
Externally, the challenge is even greater: understanding the sell-out price actually paid by the end consumer, according to the channel and the distributor. Web scraping, panels, exchanges with commercial partners… the methods vary, but the objective remains the same: to move away from a self-centered internal view to reconnect pricing with the reality of the consumer market.
To this data is added a third, often-neglected brick: expected data.
What is the acceptable sell-out price per channel, knowing that the experience and perceived value differ greatly between a specialized distributor, a marketplace, or a premium player? What sell-in margin targets are set per customer, per product, per channel? These targets do not fall from the sky: they are built from market observation and the company’s strategic choices, particularly in a Value-Based Pricing approach.
Of course, perfect data does not exist: only 46% of organizations report having high confidence in the quality of their data (2). But waiting for it often means doing nothing. The most mature organizations adopt a much more effective posture: pragmatism. Where data is lacking, they accept assumptions and define rules to “fill the gaps”; they build data reliability indicators; then they progressively enrich their model. Because in economic management, imperfect but used data is always better than perfect… but non-existent data.
How to turn data into a decision?
Having data is one thing. Making it exploitable on a daily basis is another.
61% of executives say they frequently make decisions “by gut feel” because it is too difficult to access actionable recommendations at the right time (3).
Our recommendation: build a single dashboard tool, capable of meeting the needs of several populations:
For management teams (CEO, finance, marketing, pricing…), the tool is a true management cockpit.
It allows for monitoring commercial performance, comparing results to defined objectives, and above all, adjusting the trajectory.
A concrete example: the practiced sell-out prices deviate too much upwards from expectations in a given market. Result: volumes decrease, even though the manufacturer’s stated strategy is conquest. Without management, this discrepancy remains invisible. With a monitoring tool, it becomes a clear signal. The pricing manager can then adjust the sell-in price targets, review the guardrails, and evolve commercial incentives to realign field execution with the strategy.
For sales teams and their managers, the tool changes the nature of exchanges with customers.
It is no longer about negotiating “by feel,” but on the basis of facts.
A frequent example: a distributor requests a sell-in price reduction on the grounds that they want to pass the reduction on to end consumers. But the analysis of sell-out prices shows that their prices remain perfectly stable. In this case, the tool is not just for saying no: it allows for intelligent renegotiation, by adjusting commercial conditions, requesting counterparts, or rebalancing the relationship.
The dashboard is therefore not a reporting tool, but a tool for arbitration, consistency, and credibility between the defined strategy and the reality on the ground.
70% of tools fail: the keys to ensuring the adoption of your dashboard
Implementing a high-performing tool is not enough. The real difficulty begins afterward: ensuring it is used, understood… and that it remains so over time. Indeed, 70% of tool implementations fail due to poor user adoption. (4)
In many organizations, dashboards end up being abandoned because they do not correspond to the actual uses on the ground. The key is therefore to first inscribe the tool in an iterative process, by progressively improving it based on the concrete needs of its users.
This then involves very operational work: explaining the meaning, showing the value, training, accompanying. Internal roadshows, clear playbooks, field sessions with sales teams… appropriation is not decreed, it is built.
But operationalization does not stop at adoption. A management tool is only relevant if the data remains reliable over time. This requires implementing structured processes, clear governance, and identified roles to guarantee data updates, indicator consistency, and the sustainability of the whole.
This is often where everything is decided. The companies that succeed are not those with the most sophisticated tools, but those that know how to transform a management system into a daily, sustainable, and shared practice.
Customer case: clarifying value sharing at a global leader in the manufacturing industry
We have encountered these questions several times with our clients. The case described below is that of a global leader in the manufacturing industry with a high level of Pricing maturity, working with a large and varied network of distributors.
Its objective was not primarily to optimize short-term margin, but to finely understand the distribution of value with its partners – by country, by product, by customer – in order to build a more balanced and sustainable commercial relationship. The initial ambition was to develop a tool to monitor this distribution in a very granular way.
✕ Our diagnosis: the problem was not technological but data-related. The quality and especially the structure of the existing data did not allow for a reliable analysis at the desired granularity. However, this situation revealed a deeper issue: the disconnect between the data capture strategy and the actual business needs.
✕ The approach: rather than forcing the construction of a complex tool doomed to produce fragile results, we worked to mirror the expected business uses with the existing capture systems. This allowed us to identify concrete levers: stopping certain costly and not very useful collection systems, adapting certain capture methods, and prioritizing new data initiatives based on their real business impact.
✕ The impact: in the short term, this approach allowed for significant savings on data sharing costs (several hundred thousand euros in this client’s case). In the medium term, it laid the foundations for a new data system more aligned with business challenges, paving the way for the construction of a structuring tool beneficial for all functions (finance, marketing, sales, pricing).
✕ The assessment: even when the creation of an advanced tool is not immediately possible, working on value sharing is an extremely effective entry point for prioritizing the right data investments. The project made it possible to transform a technical constraint into a strategic lever.
One thing is certain: no manufacturer can sustainably manage its commercial relationship without taking into account its distributor’s margin on its products. Value sharing directly impacts the most critical indicators – margin, volumes, commercial dynamics, channel strength. The earlier this subject is addressed, the more possible it becomes to build reliable and, above all, actionable indicators in the medium term, an essential condition for managing one’s performance rather than suffering it.
To learn more, visit our Pricing space.
Sources :
- : Exporteers,
- : Precisely
- : Startups magazine
- : ERP Software
