•WayPoint Analytics •Randy MacLean •small orders •money-losing invoices •restore profits •small accounts •delivery •labor costs •operating efficiency •value-add •logisticsTuesday, August 20, 2024—Tackling the Small-Order Problem with WayPoint Analytics

For decades, the distribution industry has grappled with a chronic issue: the small-order problem. This persistent challenge sees small, unprofitable orders eroding the profits made on larger, profitable ones. However, WayPoint Analytics has introduced innovative capabilities to address this problem head-on, providing distributors with the tools they need to enhance their profitability and streamline operations.

Understanding the Small-Order Problem

At the core of the small-order problem is the fact that many small accounts generate orders that cost more to serve than they bring in profit. These orders not only fail to contribute positively to the bottom line but actively drain profits earned from other, more lucrative orders. This issue has long plagued distributors, making it difficult to maintain healthy profit margins and efficient operations.

New Capabilities from WayPoint Analytics

WayPoint Analytics has developed two major new features designed specifically to combat this issue:

1. **Account Selection Tool**: This powerful new feature allows distributors to directly identify small, money-losing accounts whose orders habitually produce losses. By quantifying the impact of these accounts, distributors can now make informed decisions about how to manage them. Whether it's through targeted pricing adjustments, consolidation of orders, or other strategic measures, this tool provides the insights needed to turn these loss-making accounts into profit-contributors.

2. **Logistics Costs Report**: The second major feature is a comprehensive logistics costs report. This report compares the value of each order to the associated logistics costs for every account, highlighting those that lose money and quantifying the losses. By providing a detailed view of logistics-related expenses and how they impact overall profitability, this report empowers distributors to take targeted actions that enhance efficiency and profitability.

Effective Strategies for Resolution

With these new capabilities, WayPoint Analytics not only helps distributors identify problem areas but also suggests effective tactics for resolving them. Strategies such as implementing minimum order quantities, adjusting service models, optimizing commission plans, and introducing small order charges can drive significant and permanent profit gains. By prioritizing actions based on quantified insights, distributors can focus on changes that offer the best return on investment.

Conclusion

The introduction of these new features by WayPoint Analytics marks a significant step forward in addressing the small-order problem that has long troubled the distribution industry. By providing the tools to identify, isolate, and resolve profit challenges at the customer level, WayPoint empowers distributors to enhance their profitability and ensure a strong financial performance. Embracing these innovations can lead to a more efficient, profitable future for your distribution business.

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For more information about Randy MacLean, visit: www.waypointanalytics.net