Case Studies
The key in setting up your trade terms system is finding the right balance between differentiation that let's you address all your business needs, and simplicity that enables you and your team to implement and maintain the system. Channel, Country, and Product-specific challenges will always be part of setting up a trade terms system and you will address them in parallel. Below we focus on one of the three per case study to highlight the impacts that you could also generate for your business.
Disclaimer: The case studies have been specifically designed to illustrate how SweetSpot's Trade Terms Architect helps address common challenges for Consumer Goods manufacturers. All data and outcomes presented are aggregated and present anonymizes typical impacts from trade terms optimization.
Challenge
When Consumer Goods companies don’t rigidly implement their channel strategy, they often encounter challenges with overlapping shopping behaviors between consumer and wholesale channels. Such overlap creates an unclear customer journey and leads to inconsistencies in dealer objectives, often set opportunistically by sales teams. This lack of transparency and clarity in channel roles can hinder targeted commercial efforts and frustrate internal stakeholders.
Approach
SweetSpot's Trade Terms Architect helps CG companies clarify channel roles by implementing tailored trade terms systems. These systems include customized dealer incentives and a clear net pricing structure that reinforces channel-specific strategies. By restructuring sales teams and aligning them with a defined channel strategy, the solution ensures consistent and focused efforts across all distribution channels.
Impact
With a channel-specific trade terms system and a realigned sales structure, companies can achieve significant improvements in both efficiency and revenue. Many companies report revenue growth of around 4% and increased sales capacity up to 20%, allowing them to direct resources toward deeper channel penetration and new opportunities.
Challenge
Some Consumer Goods companies feel they can only keep control of their finances with strictly centralized trade terms systems. A dangerous trap that they fall in: In such setups, local teams might introduce additional, unapproved terms hidden from the headquarter, resulting in inconsistent net prices across regions and inexplainable margin losses. These inefficiencies often lead to conflicts between central and local teams, creating barriers to achieving optimal profitability.
Approach
SweetSpot's Trade Terms Architect enables companies to transition from rigid, centralized systems to more flexible frameworks. By implementing a topological bucket structure and clear discount guidelines, the solution ensures a balance between local autonomy and strategic alignment. This flexibility, combined with an escalation path for deviations, fosters collaboration between headquarters and regional teams.
Impact
With improved transparency and oversight, companies can identify and address inefficiencies in their trade terms systems. By scaling back unsupervised local dealer investments, they often achieve significant profitability uplifts north of 10%. Additionally, the streamlined processes strengthen trust and coordination between central and local teams, enhancing overall operational effectiveness.
Challenge
Companies in the Consumer Goods sector with broad and specialized product portfolios face challenges with opportunistic cross-selling by their distribution partners, if a dealer's assortment is not intentionally designed. Over time, dealer listings may grow significantly, but large portions of the assortment can become irrelevant at many points of sale (PoS). This misalignment can lead to consumer confusion and missed opportunities to effectively serve the right end-customers.
Approach
SweetSpot's Trade Terms Architect provides CG companies with tools to establish incentivization of tailored (core) assortments for each sales channel. By linking trade terms to the newly defined assortments, the software encourages dealers to align their portfolio structures with the company’s strategic priorities. This approach fosters collaboration between manufacturers and their distribution partners, ensuring greater focus on end-customer needs.
Impact
With a sharper focus on tailored assortments, CG companies can achieve notable improvements in revenue and customer retention. Dealers become more aligned with strategic objectives, ensuring a better fit between products and end-customer demands at each PoS. This alignment also lays the foundation for the effective rollout of marketing initiatives and additional channel strategies.
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