Rebate Management Basics: The Fundamentals of Special Pricing Agreements
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A SPA is a pricing technique manufacturers use with distributors to compete on price in competitive market situations to gain market share. Special pricing is granted to lower the original into stock cost. It is authorized by manufacturers for specific SKUs or groups of products for distributor partners to use when quoting and competing for job business. But that paints SPAs far too simply. While the definition of an SPA is simple, the SPA process can be incredibly time consuming, complex and labor intensive, involving a high number of fast-moving agreements coupled with the pressure to be first to market with competitive price positioning.
While we've mentioned that SPAs are often very complex. If you’re not using them already, you might hear that and think that SPAs aren’t for you. We’d urge you not to draw that conclusion too hastily. While they are complex, SPAs ensure manufacturers and distributors align with each other on their sales initiatives. Plus, they help maintain loyalty as well as protect market share.
Discover more about SPAs in this white paper.