In a typical trading relationship, we have three main parties: the manufacturer, distributor and the end user who is the customer. The relationship we are focusing on today is between the manufacturer vs distributor.
Enable Blog — Customer Rebates
Rebates: the way that product-based businesses incentivize their customers to buy more of their goods, are complicated. While much information is available about supplier rebates and the ways in which suppliers can claim as much of their rebates as they are entitled to, less has been written about customer rebates: the other side of the story.
Well-managed customer rebate programs are extremely valuable.
They can help your business win the loyalty of distributors and buying groups, while driving mutual, strategic growth.
If you’ve ever been confused about terminology relating to rebate management, you’re not alone! The world of rebates is a complicated place at the best of times, especially when there can be multiple different names for the same thing.
There are two sides to the customer rebate story: the customers’ side where, historically, retailers and distributors have not always been paid the full value of the rebates they should have received; and the manufacturers’ side (those who offer the incentives in the first place).
When it is done well, rebate management improves partner relationships, provides financial compliance and reduces audit risk, eases cash flow for customers, improves rebate accuracy and predictability and helps grow business through true partnerships between manufacturers and their customers.
It may seem overly simplistic to associate the complex nature of financial accounting with a cup of coffee, but when it comes to customer rebate management this analogy makes intuitive sense for anyone who has ever tried to get a free cup of the caffeine-laced beverage.
When it comes to modernizing business practices, technology in general and software in particular is essential for business growth. How are manufacturers and suppliers who deal with millions of dollars’ worth of customer rebates each month adapting to the challenges faced by a historic lack of suitable software? Andy James, Chief Product Officer at Enable, shared a few stories about how their clients have changed for the better and what drove their decisions.
Customer rebates are what a seller pays to another business whether they’re a direct customer, an indirect customer, or a buying group. Customer rebates are a key contributor to the flourishing Deal Economy, which last year was worth $500bn in the US alone.