What pricing optimization is
Pricing optimization is choosing the price that gives the best result across many quotes, not the best price on one. For a distributor the result is margin at a stable win rate. Optimization software learns, from your own won and lost quotes, how win rate changes with price for each customer segment and part family, then picks the price where margin times win rate is highest and keeps it inside your floors.
The input is history you already have in the ERP. Two years of quotes and orders is enough to start. There is no benchmark data from other companies involved, because your workshops in Dubai do not behave like someone else's fleets in Ohio.
Optimization per segment
The engine learns one curve per segment and part family, because the same bearing has a different right price for a workshop and a fleet. Customer intelligence shows the learned tolerance for each account, and you can override it.
Workshops
Win 82% of lines up to list minus 3%, then drop off fast. The engine stops discounting past 3% for this segment.
Fleets
Pay up to 4% over list when stock is short. The engine moves the price up as days of cover fall.
Accounts that do not respond to price
Some customers buy on an agreement, not on the quote. Optimization leaves them alone.
OEM accounts
Priced on agreement with volume breaks only. The agreed price is held as a customer override with a start and an expiry.
The learning loop
Every quote outcome feeds the next model update, so the curves follow your market instead of a snapshot from the implementation. Learned offset drift shows where the engine's view has moved from your policy, and margin leaks shows where discount still runs ahead of volume by customer, part and rep, ranked by dollars.
Nothing changes without a reason you can read. Each optimized price carries its factors and the policy that capped it.
Where your team stays in charge
The policy sets the floor, ceiling and confidence. The simulator runs a new policy over last year before it goes live. Approvals catch a line the engine would price outside the limits. Reports show margin, win rate and discount depth by segment every month.
At Mineral Circles Bearings most of the gain came from long-tail parts and smaller workshop orders, where reps had given the full band discount by habit. Optimization found the 2.8 points without touching the key accounts.