Rebates are prevalent in many industries because they can have a significant impact on a business’s bottom-line. A buyer agrees to purchase a certain volume, or value of a seller’s goods. Once the purchase has been made, the seller refunds a proportion of the price they’ve paid. But although they sound manageable, we have found that 4% of potential rebate revenue typically goes unclaimed which can mean many industries are missing out on hundreds of thousands of dollars each year.
Enable Blog — Industry Sector: Building Materials
We are delighted to announce that Enable will be presenting its rebate management software at the NAHB International Builders’ Show in Las Vegas from January 21-23.
Strategic collaboration with manufacturers could be a huge driver of revenue and profit for construction-industry distributors. So why have so many given up on trying to make it work?
We learn about collaboration from an early age. As children we quickly learn that we need to collaborate with teachers, classmates and team players in order to be successful. "There's no 'i' in 'team' is a common mantra in sports and work teams. And "supply chain collaboration" has been a hot topic for decades.
Despite that, there are very few systems that enable wholesale distribution companies and their suppliers in the building materials industry to truly collaborate on their trade agreements.
SIG is a leading European provider of specialist building materials, with close to £3bn of annual revenues and around 9,000 employees across the UK, Ireland and Mainland Europe. As a specialist distributor, SIG plays a critical role in the construction supply chain, bringing value to its customer base across major European markets.
If you’re a builders merchant you’ll know how essential it is to ensure every penny counts in terms of your bottom line. So, it’s even more crucial than ever that you don’t miss out on any of the, often significant, sums due to you through rebates.
Enable has formed the Building Materials Industry Advisory Group to inform our development team as we continue to create software products to solve industry-wide challenges that are not easily addressed by existing IT solutions.
The early versions of Enable’s flagship software product, DealTrack, primarily focused on allowing companies to manage supplier rebates.
The software is aimed at those companies in which rebate income makes up a significant proportion of profit, and it provides functionality for both finance and commercial teams – enabling deals to be accurately systemised and visible to all relevant parties, and rebates calculated at a very granular level of accuracy.
This business had used a bespoke system to manage rebate earnings for some time, but rebates were calculated at a very high level and were based on data provided by suppliers rather than their own data.
They reviewed the situation and estimated that by making calculations at a more granular level of detail, they could significantly increase the level of rebate claims within the existing deal structures.
This building supplies company has over 50 branches and is growing. They recognised that having smooth business processes would be an essential foundation for their growth plans, and whilst most parts of the business had been systemised, the area of rebate management remained an anomaly.
They were using spreadsheets because their core ERP system (Kerridge) did not support their requirements.
They approached Enable to discuss the suitability of DealTrack to their needs and were keen to discover whether a quick return on investment was possible.
This business manages over 1m stocked items, the majority of which have some kind of associated rebate deal. Within the first 12 months of operation they recognised a 200% return on their investment in DealTrack software.
They had previously built a rebates module as part of their bespoke financial system. However, whilst this had been built to specification, over time it lacked the flexibility to manage every type of deal.