Supplier costs land on the supplier’s calendar. Your prices move on yours, through contracts that constrain them, sellers who negotiate them, and rebates that settle a quarter later. Every day between cost exposure and effective customer pricing creates margin the business may have to absorb rather than recover.
Broad-line, MRO and specialty distribution · one ERP through to multi-business-unit enterprises
It is a system of mechanisms that together decide what the distributor keeps. They are owned by different people, held in different systems, and they move on different clocks. At a larger distributor none of those systems is missing. What is missing is one governed commercial context connecting them.
Customer by product by location by agreement produces millions of distinct economics. One large distributor reports more than 5,000 primary suppliers and more than 1.5 million stocked products; the arithmetic is the same shape at 80,000 SKUs.2
The exposure begins on the supplier’s effective date. The approved response begins whenever analysis, agreement and publication allow. The gap between them is absorbed, not deferred.
A deal won, a competitor move, a branch call: each writes a customer-specific price that outlives the reason for it and is inherited by every quote that follows.
The official price statistic for this industry does not measure prices. Federal statisticians treat wholesalers as “suppliers of distributive services (rather than goods)” and therefore track “the average changes in gross margins received by wholesalers and retailers.”3
A distributor that cannot recover a cost increase in time rarely has a missing system. It has five that are each correct about their own part of the transaction, and a decision that runs across all of them on a clock none of them owns.
Each system is accountable for its own part of the transaction and answers for that part accurately. Assembling the parts into a single commercial judgement is rarely any one of their jobs, so it becomes someone’s spreadsheet instead.
The effective date arrives from outside the business, and it often lands outside the system that governs the response. The window opens quietly and closes on schedule.
Base, channel, customer, contract and override all resolve to one number at the order line. Which wins is often a configuration setting rather than a stated commercial policy, and ERP vendors ship those settings precisely because the question is real.
Programs settle weeks or quarters after the transactions they attach to, so pocket margin may not be available at the moment the pricing decision has to be made.
Commercial Context connects the governed customer, product, transaction, price, cost and agreement records needed to operate the decision across those systems, without moving what they own.
At a $200M distributor, the decision may span an ERP, spreadsheets and email. At a multi-billion-dollar group, it may span several ERPs, CRM, CPQ, a lakehouse and regional pricing teams. The problem is not the presence or absence of systems. It is that the commercial decision crosses them.
None of these systems is the problem, and none is replaced. The ERP keeps pricing the transaction; the warehouse keeps being the source of history. What is missing is one governed commercial context that reads across them, decides once, and writes the result back to the systems where transactions happen.How Commercial Context works
No single price determines the outcome. Margin is produced by a sequence of commercial mechanisms operating against the same customer, product and transaction, and each one moves the number the next one starts from.
Revomo preserves that context, so the chain can be analyzed, decided, governed and measured as one connected decision rather than as nine separate records.
Explore Commercial ContextFive commercial decisions, each owned by someone, each measured in something the business already reports. The first is the one this brief runs end to end.
Why it is hardExposure varies by customer, agreement, margin position and sensitivity, so one blanket percentage over-recovers where more was available and breaks the accounts that would not absorb it.
Why it is hardThe walk from list to pocket runs through discounts, freight, rebates and chargebacks owned in different places, so invoice margin is not the number that reaches the P&L.
Why it is hardBase lists, market lists, customer lists, contract lines and quote overrides all resolve to one number at the order line, and the precedence between them is often undocumented.
Why it is hardTerms live in documents and prices live in the ERP, so a price update that should have excluded protected lines tends to be discovered by the customer rather than by the system.
Why it is hardPrograms accrue on transactions that already happened and settle on the supplier’s calendar, so the economics that decide whether a deal was good arrive after the decision was made.
A global supplier raises cost on 38,400 items: 5.9% on the letter, 7.4% purchase-weighted against what these four businesses buy. It lands in three ERP instances, against a North American effective date 35 days out and a European book owed 60 days of notice. Every system involved already works. What is missing is one object connecting the decision across them.
The file lands as a governed dataset rather than a spreadsheet in an inbox, so everything below computes on the same records the business runs on.
Simplest and most expensive. It passes through a simple average rather than what this book buys, pushes accounts already under the floor further under, and breaks the −1.0% volume tolerance.
Recovers $1.28M more than the blanket move while moving 640 fewer accounts, the strategic and cross-unit group held for a deferred plan. It stays inside the volume tolerance, repairs the corridor on the 2,480 accounts under it, and carries two effective dates.
A legitimate choice, not a worse one. It trades $1.58M of recovery for the lowest volume risk, which is right where a renewal says so.
| Segment | Accounts | Lines | Move | Recovery | Why this action |
|---|---|---|---|---|---|
| Above corridor, all units | 3,120 | 168,400 | +7.4% | $2.41M | Full weighted pass-through. The letter’s number would have left money behind. |
| Below corridor | 2,480 | 121,900 | +9.0% | $2.06M | Pass-through plus corridor repair, at the 9.0% single-event cap. |
| Elasticity-constrained | 2,760 | 132,600 | +3.6% | $1.44M | Inside the segment elasticity band. More costs more than it returns. |
| Freight- & duty-heavy lanes | 980 | 51,700 | +7.4% & freight reset | $1.06M | Landed-cost basis. A list-only move under-recovers duty and freight. |
| Europe book, under notice | 700 | 32,600 | +7.4% from day 95 | $0.79M | Same move, later date. The notice period sets it, not the letter. |
| Strategic & cross-unit | 640 | 58,300 | Hold 90 days | $0 | One deferred plan, routed to the account owner and both unit VPs. |
| Agreement-locked | 1,180 | 46,900 | Hold to term | $0 | Excluded by agreement record and effective date, in all three instances. |
| Total | 10,040 moved · 507,200 repriced | +$7.76M | Annualized, net of modeled volume response | ||
| Rule | When | Then | Approval |
|---|---|---|---|
CR·ELIG | Landed cost delta > 2% per item and instance, no lock | Eligible to reprice | Auto |
CR·FLOOR | Pocket margin below that unit’s corridor floor | Corridor repair required | Auto |
CR·NOTICE | Regional terms carry a notice period | Effective date from notice expiry, per region | Auto |
CR·ESC | Proposed move > 4.5% on an account | Route with model context attached | Regional pricing lead |
CR·XBU | Account trades with more than one unit | One proposal, joint approval | Business unit VPs |
CR·CAP | Proposed move > 9.0% in one event | Block | Group VP Finance |
CR·LOCK | Agreement lock in force at the effective date | Hold price to term | Auto |
Backtested against four quarters of quotes and orders from all three instances, then shadow-run beside the live policy before publishing. The rule participates before the action is proposed rather than checking it after, so the recommendation arrives already inside the corridor, the cap and the lock. The policy is one object; the decisions it permits belong to the unit and region that own the account.
The agent reasons. It does not publish. Reasoning does not confer authority: the state change is a governed transition, and policy decides if it is legal.
The file takes effect on day 35, the European book on day 95, because the regional terms owe 60 days of notice: one decision, two publish dates. Day 23 is not an efficiency metric. Against $9.66M of annualized pressure, every week between cost and price is roughly $186K absorbed rather than deferred.
The $710K gap decomposes to three causes, all on the record: $428K from two global accounts that took a phased step across both units they buy from, $163K from the instance whose customer-specific layer published five days late, and $119K from slower quote turnover in one region. Only the first is a commercial outcome; the second is a defect the group can fix.
The next decision starts with the outcome of this one.
The specimen above is one week in a distributor’s year. This is what an operating model looks like on either side of it.
These are the measures the operating model puts under management. Where any of them lands depends on the book, the contracts in it and how those customers respond, which is why this page shows the mechanism rather than a number.
Three layers. The foundation makes the rest trustworthy, the decision system does the work, and the extend tier is added where this business actually needs it.
Nothing above it is trustworthy without it.
Customer, product, branch, unit, region, contract, channel, currency and time held as one governed model, so a figure resolves to the record that produced it.
Where the commercial decision is actually made.
The walk from list to pocket, attributed to the mechanism that caused each step rather than left as a residual.
A solved recommendation inside declared constraints, with the constraint that bound it visible.
Corridors and precedence as decision tables, backtested and shadow-run before anything publishes.
Added against a decision, not installed as a suite.
Target and floor at the moment of the quote, computed from the records finance reconciles against.
Agreements as records a pricing action reads before it publishes, so exclusion is automatic and auditable.
Programs, accruals and claims held against the transactions they attach to, so pocket margin is computed rather than reconstructed.
Once the decision is governed, monitoring it should not be manual. Agents watch and propose; they do not approve.
Revomo governs the commercial decision across these without replacing the systems that continue to own transactions and records.
Revomo enters through one decision rather than a company-wide programme. For a single-region distributor that is usually the whole book; for a group it is one unit, one region, or one supplier’s price population. The reason is not company size. Commercial change decomposes into decision systems, and the first has to pay for itself before the second is worth building.
Exposure computed at customer and product level, recovery differentiated by segment, published inside the window and effective-dated by region.
The walk from list to pocket reconciled on governed records, with every step attributed to the mechanism responsible rather than left as a residual.
Every list on one spine with explicit precedence, conflicts surfaced on day one, and each surviving exception given an owner and a date.
All three expand on the same Commercial Context, which is what makes starting with one of them a first step rather than a partial commitment.
Start with the commercial decision carrying the most value or friction. Expand on the same platform.
There is no single distributor archetype. These four motions weight the same platform very differently, and the first phase follows the motion, not the org chart.
Breadth is the value proposition, and the long tail is priced by a rule nobody has re-derived since it was written.
Assortment depth and rule-based pricing across a very long tail, where a small share of lines carries most of the deliberate pricing.
Rules become inherited rather than deliberately maintained, so the tail drifts without anyone approving the drift.
Which parts of the long tail are mispriced relative to cost, velocity and substitutability?
Price is decided close to the customer, and the variance between branches, regions and units is the real dataset.
Local judgement close to the customer, which wins business and produces variance nobody has a consolidated view of.
Two units quote the same account differently, and neither is wrong under its own local policy.
Which local variance is commercially justified, and which is simply unmanaged?
Revenue arrives in bid-shaped lumps, and the margin is set months before the invoice.
Bid-shaped revenue where the margin is committed at specification, months before the cost that has to cover it is known.
The price is fixed before the exposure exists, so cost movement lands entirely on the distributor.
What must a bid hold back to survive the cost movement between award and delivery?
Supplier programs are a material share of earnings, settled on someone else’s calendar.
Supplier program income that is a material share of earnings and settles on the supplier’s calendar, not the distributor’s.
Deals are priced on invoice margin because settled pocket margin arrives after the decision was made.
What is true pocket economics once every program settles, and what should that change about how we price?
A large distributor commonly runs several of these at once, in different business units and often on different ERP instances. The point of locating yourself here is not to pick one, it is to see which motions you are carrying and which of them is costing the most.
We will first map how that decision works today, where its economics move, and what Revomo would need to operate it. When it is useful, we can then work with a scoped slice of your commercial data to demonstrate the decision on your own economics.
Assess your margin opportunityExternally sourced figures on this page, in order of appearance. Every other number is specimen data inside the decision story and is labelled illustrative where it appears.