How to Optimize Supplier Price Monitoring

Monitoring supplier prices is one of the most important tasks in the work of a category manager, as the input price of a product is a basic component of pricing that directly affects the margin and profitability.

In practice, this means it is necessary to systematically collect numerous price lists of distributors, often from various sources: email, Google Sheets, supplier accounting systems, etc. After collecting all of this data, it is advisable to combine it into a single document, clean it of unnecessary fields, and translate it into a clear format (for example, tables with key columns: product name, price, supplier, delivery terms). If you have ever thought about optimizing your work, you have definitely asked the question, “How can I monitor supplier prices faster, more simply, and more efficiently?”

The good news is that modern technologies come to the aid of the category manager. 

In previous articles, we have written about how the Pricer24 market analytics platform helps category managers form optimal price offers by analyzing competitors’ prices, finding growth points as a result of assortment analysis, and improving their promotions by analyzing competitors’ promotions.

In this article, we will show how automated monitoring of supplier prices can save time and increase the profit of your online store.

But first, as always, a little theory.

Contents:

Analyzing Supplier Price Data: Key Aspects

Benefits of Automating Supplier Price Monitoring

How Pricer24 Simplifies Supplier Price Monitoring

Supplier Prices in Dynamic Pricing

Analyzing Supplier Price Data: Key Aspects

Input Price

The input price (in this text we also use the term “base price”) of a product is a key factor in the pricing strategy, as it directly impacts both the retailer’s purchase cost (the total cost to the retailer to obtain the product, including factors such as shipping, taxes, and import duties) and the final selling price. Without accurately determining the input price, the retailer can’t establish effective pricing.

Input price data and a clear procurement structure form the foundation on which category managers base their work.

However, it’s important to understand that the price your supplier presents does not always take into account all factors. In B2B partnerships, vendors and distributors often support online stores by offering various perks (bonuses, discounts, and special offers) to stimulate sales of partner-retailers. These perks can significantly impact the final profitability of a product for the retailer.

For a category manager, this means the need not just to analyze a supplier’s base price but also to consider any additional terms of cooperation.

Let’s take a closer look at types of special supplier conditions.

Special Supplier Terms

Back Bonuses

Back bonuses are compensation from the supplier that retailers receive after selling a product. These bonuses enable retailers to increase profitability without directly raising prices for consumers. Incorporating back bonuses into a pricing strategy can help offset logistics or other related costs.

Example: If a supplier offers a 5% back bonus after a sale, a manager can reduce the store’s purchase price, using this bonus to boost margins.

Sales Performance Bonuses

Sales performance bonus programs offer an additional percentage or discount for achieving specific sales or purchase volumes.

Example: If a store meets its sales target for a quarter and receives 3% of its sales as a bonus, this can become a significant source of additional revenue.

Volume Discounts

Volume discounts allow businesses to reduce the cost per product unit, increasing overall profitability.

Example: Purchasing large quantities of goods at a 10% discount enables cost optimization and increases margins through economies of scale.

Conditions for Scarce Items

Scarce items often come with a higher price due to limited market availability. In such cases, the price for larger volumes may increase further. This helps the supplier manage inventory and ensures an even distribution of goods among partners.

Example: A supplier sets a condition that a single retailer can purchase no more than 100 units at the base price. If additional units are required, the price per unit increases by X%.

Benefits of Automating Supplier Price Monitoring

What challenges do category managers face?

First, category managers must regularly receive price lists from various suppliers (via CRM, ERP, or email), download them as multiple Excel files, and aggregate the data into a format suitable for analyzing, comparing, and selecting the best price.

Second, special conditions — such as discounts, bonuses, or terms for scarce items — are often not included in price lists. They might be outlined in contracts, application documents, emails, or the supplier’s internal systems.

Third, in today’s fast-paced market, it is essential for retailers to respond quickly to market changes and adjust prices based on the latest data. Supplier prices can fluctuate frequently, particularly in dynamic niches like electronics or consumer goods. Delays in updating data can lead to:

• Lost opportunities – Without up-to-date pricing, a category manager may miss the chance to take advantage of a profitable offer.
• Incorrect pricing – An input price that doesn’t account for recent changes or special conditions can result in a final price that is either too high or too low.
• Time costs – Manually processing price lists and contracts consumes significant time, especially when managing dozens of suppliers.

Without continuous access to current data presented in an easily analyzable format, making informed pricing decisions becomes challenging.

Automated solutions collect, systematize, organize, and compare pricing data. Essentially, they handle all the routine tasks for you, allowing you to make informed pricing decisions and use your time more efficiently.

How Pricer24 Simplifies Supplier Price Monitoring

Pricer24 is a SaaS product analytics platform tailored to the needs of midsize and large e-commerce companies, including online stores, distributors, and vendors. The platform serves clients including Philips, Asus, MSI, and other leading market players.

Pricer24 offers tools for comprehensive market analysis, including for retail price intelligence, assortment analysis, and supplier price monitoring.

Let’s explore how Pricer24 collects and processes data, the reports available to users, and how dynamic pricing based on competitor and supplier prices can enhance product repricing.

Data Collection and Processing

Pricer24 can collect data for monitoring supplier prices from various sources, including:

• B2B Portals of Distributors: Data is automatically downloaded through an API, enabling real-time access to supplier prices.
• Emails: Price lists received via email are automatically uploaded to the system (typically, clients create a dedicated email for redirecting supplier price lists).
• Online Spreadsheets: Pricer24 supports importing data from Google Sheets.
• Excel Files: Clients can manually upload price lists in Excel format when needed.

How does Pricer24 ensure data relevance?
The parser regularly collects data from all defined sources, ensuring that reports within the system display the most current information.

An important consideration when working with price lists is the unification of report structures. Column names can vary across suppliers (for example, one may use “Price” while another uses “Wholesale Price”). Pricer24 accurately recognizes columns and converts price lists into a unified structure.

Reports and Analysis

Price Comparison

Imagine you’re running low on a certain product and need to quickly determine which partner offers the most cost-effective option for placing an order.

The Price Comparison Report provides the answer in seconds. With the product search function, you can instantly see which suppliers have the product in stock and at what price. This allows you to easily identify the most profitable offer. Simply sort the data in the “Price Difference” column from highest to lowest to find the best deal.

This report also allows you to compare your current purchase price with the offer of a particular supplier, helping you optimize your purchasing strategy.

You can segment data by various criteria depending on whether you are analyzing prices for a specific product or a specific segment (for example, products of a certain brand or in a certain category, new products, products with particular technical parameters).

In our Telemart case study, we outlined how segment analysis of prices and supplier assortments in Pricer24 enabled our client to grow profits by 25% on scarce video card models.

Supplier Price History

The Price History Report allows category managers to analyze the price dynamics of a product from one or multiple suppliers in detail. The report shows changes in the purchase price over a specific period, helping users to identify price trends such as seasonality.

This can be useful if:

• You need to prepare for negotiations with suppliers using data on historical price fluctuations.
• You want to retrospectively assess how changes in purchase prices will affect a product’s margin and overall financial results.
• You’re considering multiple suppliers and want to compare their pricing policies to select the best partner.
• You need to track long-term price trends in the market to develop a category management strategy.

Customization Options for Special Supplier Conditions

As mentioned earlier, suppliers sometimes provide special conditions for their partners. In such cases, Pricer24 offers the ability to customize reports to account for these specific agreements.

How does it work?

If a client has particular terms with a supplier (for example, a 10% discount on a product), we can configure the system to automatically factor in these terms when displaying supplier prices in reports.

For instance, if a client reports receiving a 10% discount on purchases from supplier X for a specific category, we can create a rule: “When displaying the price of supplier X, subtract 10%.” This ensures that reports reflect supplier conditions, providing client managers with a more accurate and comprehensive picture.

Supplier Prices in Dynamic Pricing

In our case study on dynamic pricing for scaling home appliance sales, we discussed how our client automated product price adjustments based on competitor prices, enabling them to stay competitive.

However, dynamic pricing can also be based on supplier prices, ensuring the right balance between competitiveness and margin. This approach guarantees that, after revaluation, your selling price will never fall below the purchase price.

How dynamic pricing works in Pricer24

Data on current supplier and competitor prices is integrated into the system. When automatically repricing products, Pricer24 considers both the market situation and purchase conditions.

According to rules defined by the client, the system automatically adjusts product pricing.

For example, if the supplier’s price is $100, a competitor is offering the product for $105, and the minimum margin is 10%, the system will set the selling price at $110 despite the lower price offered by the competitor. This fine-tuning of pricing rules helps to protect category profitability.