The Impact of Tariffs on Ship and Debit (SPA) Programs
When tariffs were announced in February, we cautioned that the best strategy for distributors was to focus on their processes so that they could facilitate passing through the price increases. Part of our guidance was to automate the implementation of price increases, review T&Cs for quotes, contracts, and SPAs, and to communicate.
In fact, back in December, we shared with a major distributor that there would be tariffs and that they should focus on the process then.
Since then, we’ve seen numerous distributors share communiqués with their customers, essentially saying, “Price changes are coming due to tariffs, and we’ll tell you when we know.”
But a major issue for distributors will be the potential for lost margin, and much time being invested, due to the impact of tariffs on ship and debit (SPAs).
The key here is strong administration.
While ERP systems have gotten better over time, and the process is better for larger distributors, for the vast majority of distributors, and manufacturers, it is not where it needs to be.
This is an area where an investment in technology, and having the technology outsourced, can have a significant ROI.
Larry White (President & Founder of Interlynx Systems, LLC), has extensive experience and multi-industry experience, with ship and debit (what he calls “rebate”) systems. His understanding of the business is driven by a decade-long stint as Vice President and General Manager with Ingersoll Rand and learning the root causes of channel friction that distract distributors and manufacturers from a constructive relationship. And he knows the electrical industry as they have clients in the space.
Larry shares his thoughts on the impact that tariffs will most likely have on ship and debit / SPAs here.
www.interlynxsystems.com
In fact, back in December, we shared with a major distributor that there would be tariffs and that they should focus on the process then.
Since then, we’ve seen numerous distributors share communiqués with their customers, essentially saying, “Price changes are coming due to tariffs, and we’ll tell you when we know.”
But a major issue for distributors will be the potential for lost margin, and much time being invested, due to the impact of tariffs on ship and debit (SPAs).
The key here is strong administration.
While ERP systems have gotten better over time, and the process is better for larger distributors, for the vast majority of distributors, and manufacturers, it is not where it needs to be.
This is an area where an investment in technology, and having the technology outsourced, can have a significant ROI.
Larry White (President & Founder of Interlynx Systems, LLC), has extensive experience and multi-industry experience, with ship and debit (what he calls “rebate”) systems. His understanding of the business is driven by a decade-long stint as Vice President and General Manager with Ingersoll Rand and learning the root causes of channel friction that distract distributors and manufacturers from a constructive relationship. And he knows the electrical industry as they have clients in the space.
Larry shares his thoughts on the impact that tariffs will most likely have on ship and debit / SPAs here.
www.interlynxsystems.com