What better pricing is worth to you
$1,002,488 in year one
Every number has a formula
Smarter prices
revenue × 1.6% × industry × own-brand × pricing todayIndustry: distribution 1.0, manufacturing 0.9, retail 1.1, other 0.85. Own brand adds up to 20%. Halved if you already use AI pricing, ×0.85 with competitor data, ×0.8 without sales history.
Automation
revenue × (0.30% + 0.25% with several price lists)Time and errors saved by keeping prices and lists in step. ×0.6 if prices are already set by an algorithm. Counted as an operating saving, so it adds to profit but not to gross margin.
Customer pricing
revenue × customer factorOnly B2B 0.50%, B2B and B2C 0.35%, only B2C 0.10%. ×0.6 without sales history.
How products get priced
products × share that makes 80% of revenueTop sellers have enough sales to learn demand response. The long tail is priced from product drivers and similar items.
Typical uplift
+1–3 pts marginMcKinsey reports that its pricing clients raised return on sales by 2 to 7 percentage points within one year. The 1–3 point range stays below that and counts price and customer pricing only.
McKinsey & Company, PricingTypical leakage
1–3% of revenueA global sample of industrial companies lost over 6% of revenue to off-invoice discounts and leakage. The 1–3% range counts on-invoice discounts only, the part the leakage calculator models.
Bain & Company and Pricefx, The Hidden Profit Killers in Off-Invoice Discounts, 2021How much margin are your discounts leaking?
Three numbers give you a leakage range for your business, with the formula behind it.
Questions
The estimate adds three parts. Smarter prices and customer pricing are a share of revenue, adjusted for your industry, how you price today and whether you can share sales history. Automation is the time and errors saved by keeping prices and lists in step. Every factor is listed in the method on this page.
Gross margin is revenue minus the cost of the goods sold. Time saved on price changes lowers operating cost, not the cost of goods, so it counts toward the extra profit but not toward gross margin.
The chart assumes one month in shadow mode, where prices are calculated next to yours and nothing changes for customers, then two months of ramp up as you approve categories. From month four the estimate runs at the full rate.