Distributors: Don’t Let Market Pressure Erode Your Margins

Distributors are under intense pressure.

You are being squeezed from all sides. Costs have gone up across the board, including fuel, packaging, warehousing, labour, to name a few. Customers are demanding more for less. And your sales teams are doing their best just to keep the wheels turning in a volatile market.

If you are feeling stuck between rising costs and price-sensitive customers, you are not alone.

What’s Really Happening

For many distributors, margin erosion is not the result of bad decisions, it is the natural consequence of trying to keep customers happy and the business afloat in challenging conditions.

We see it every day:

• Discounting becomes the default: Sales reps under pressure to hit targets often drop prices just to close deals, without always realising the long-term cost to the business.
• No clear price structure to fall back on: When there is no published list price or discount guardrails, it’s hard to maintain consistency, or even know what’s being given away.
• Delayed price increases: With supply chain volatility and customer pressure, many businesses wait too long to adjust prices, even when costs are rising fast.
• Struggling to show value: When customers do not clearly understand your value beyond product and price, it becomes difficult to defend margin no matter how good your service is.

These situations are understandable. You are doing what you can to keep relationships strong and the business running. But over time, these cracks can widen, eating into profitability and making growth feel impossible.

There Is a Way Forward

There is good news - it is possible to stop margin erosion and strengthen your commercial foundation.

Here’s what works:

1. Create structure where there is none: Introduce a clear list price and discounting framework. It gives your team something to work from and makes lost revenue visible and addressable.
2. Help sales sell on value, not just price: Equip and empower your sales team with the tools, messaging, and confidence to talk about what you do differently and why that is worth paying for.
3. Review pricing regularly, not reactively: Pricing should not be something you revisit only when there is a crisis. Make it part of your operating rhythm, informed by market insight and data.
4. Start small, build capability: You do not need to overhaul everything overnight. Start with one category, one customer segment, or one pricing issue and build momentum.
5. Treat pricing as a lever, not a number: Pricing is one of the fastest ways to improve margin, but only if it is treated as a strategic lever, not just a finance exercise.

The Distributors Who Act Now Will Be Stronger Tomorrow

This is not about being ruthless. It is about being resilient. About setting your team up for long-term success, even when the market is tough.

And change does not have to take forever.

In just 90 days, you can build pricing structure, train your sales team to defend value, and start seeing measurable improvements in margin and confidence. That is what I help distributors do, stop margin leakage, improve pricing practices, and build a foundation for profitable growth.

Because you should not have to work this hard just to stand still.