The State of Special Pricing Agreements: Opportunities in Efficiency, Administration and Analytics
SPAs are notoriously difficult to administer. They are generated by a manufacturer and bound by a channel partner who will deliver the goods to a customer, such as a contractor, retailer or end customer. They require a careful approach, necessitating a combination of knowledge about price strategy, process management and inventory availability. Their very name — special pricing agreement — suggests that they are used only on special or unique occasions but the truth is they’ve become less special and more popular in practice.
All of these factors come together to create a type of rebate that is tricky to manage and trickier to pay out (or claim, depending on which side of the equation you may be on). Managing SPAs is a complex and time-consuming task, requiring a great deal of effort and resources, and this leads to the perception that many businesses avoid them wherever possible.
But is this true? We decided to find out.
In this report, we will analyze data from distributors, manufacturers and retailers regarding their use of SPAs, how they manage the financial administration of SPAs and their overall opinion of SPAs from a commercial perspective. The results we uncovered provide insights into the efficiency, challenges and objectives of using SPAs as well as the desired functionality for an effective SPA solution. This report aims to provide a comprehensive understanding of the current state of SPA usage and management as well as recommendations for improving SPA processes and solutions.