Tradelink

Client Overview

Industry: Plumbing and Trade Supplies – B2B-focused trade counter and project support

Business Size: 200+ branches nationally, serving SME plumbers, builders, and civil contractors

Location: Australia-wide, with regional and metro coverage

Client Context: Tradelink operates in a highly fragmented, price-sensitive market with direct competition from Reece, Mitre 10, and local independents. While offering a national footprint and extensive stock range, Tradelink’s branch-level pricing discretion, legacy override practices, and cost-plus culture created inconsistent customer experiences and unnecessary margin leakage.

Challenge / Problem

Symptoms Observed:

• Cost-plus logic used by default across SME and commercial accounts
• Price overrides and manual adjustments routine at the counter
• SKU-level pricing often below cost or misaligned with market relativities
• No consistent framework for quoting, discounting, or value communication
• Promotions and supplier rebates frequently eroded by poor branch execution

Strategic Impact:

• Up to $1.2M in margin loss on sub-5% margin or below-cost sales
• Poor alignment between central pricing strategy and branch execution
• Customer confusion due to inconsistent pricing by store and channel

Staff Commentary:

"Our sales teams are trained to give discounts, not defend value. The system shows prices no one trusts, so we rely on gut feel or competitor claims."

Objectives of the Engagement

• Establish structured pricing capability across trade counters, showrooms, and project teams
• Identify and recover lost gross margin from overrides, mispriced SKUs, and contract leakage
• Improve pricing transparency and discipline across 200+ branch locations
• Equip sales teams to price by value, not just volume or spend tier
• Develop centralised pricing governance while preserving regional agility

Our Approach

Phase 1: National Pricing Capability Diagnostic

• 338 staff across 6 Fletcher units surveyed, including 52 Tradelink respondents
• Scored 66% on operational pricing capability, 33% on technical understanding (lowest of all divisions)
• Identified gaps in quoting consistency, value articulation, and SKU-level margin control

Phase 2: Margin Opportunity Assessment

• Reviewed sales at SKU and customer level, identifying $10.8M in EBIT potential
• Flagged 1,147 SKUs priced below cost; margin erosion driven by override culture and lack of centralised logic

Phase 3: Quick Wins Roadmap

• Prioritised changes to list price architecture, customer discount governance, and pricing SOPs
• Created education program to lift technical skills and pricing mindset among sales and branch staff
• Developed tools to enable margin guardrails, quote turnaround efficiency, and customer-specific value messaging

Key Actions Taken

1. Price List Optimisation
   Built national pricing architecture with logical relativities and cost floors
2. Override Controls & Delegations
   Introduced tiered approval thresholds for branch, regional, and national deals
3. SKU Margin Review
   Identified low-margin and negative-margin SKUs for reset or rationalisation
4. Customer Agreement Refresh
   Reviewed top 230 customers >$500K spend; aligned pricing with value received
5. Quote SOPs & Tools
   Created standard quoting process with embedded price logic and value drivers
6. Pricing Strategy Publication
   Developed pricing master document with role clarity, sign-off authority, and strategic principles

Results Achieved (Within 8–12 Weeks)

1. EBIT Opportunity Identified
   $10.8M in annualised margin improvement via price resets and process controls
2. Technical Capability Lift
   Pricing quiz scores improved with education program rollout
3. Price Confidence Tools Delivered
   Branch teams gained quoting structure, value narratives, and negotiation guardrails
4. Override Incidence Reduced
   Clear approval model projected 40–60% reduction in pricing exceptions
5. Alignment on Strategy
   Executive and field teams co-developed national pricing playbook

Client Feedback

“Our team finally has the tools and support to quote with structure, not just instinct. The old days of cost-plus and panic discounting are numbered. We can now back ourselves to price for profit.”
— Regional Sales Manager, Tradelink

What This Means for Similar Companies

In the trade centre environment, pricing is both operational and cultural. Branch teams are under pressure to match prices, win volume, and keep contractors loyal—often without the tools or confidence to hold value. The Tradelink case shows how national pricing discipline, properly deployed, can increase profitability without sacrificing local responsiveness.

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