Jigsaw Systems offers a complete solution for the complexity of Special Pricing Agreements. Our system has three components: Contract Setup & Administration, Rebate Claim Submission/Review & Auditing, and Measuring Contract Performance & Profitability. Manufacturers can implement each component individually, or deploy all three components for a more complete solution.
The biggest challenges with SPA’s are clearly identifying the business opportunity, documenting the pricing discount needed, and ensuring that both the manufacturer and distributor agree on the final negotiated contract. Jigsaw offers a first-of-it’s-kind solution for the Electrical Industry, one that digitizes the entire process. Accessible by manufacturers, distributors and sales reps alike, SPA contracts can be electronically requested, tracked and approved, allowing all parties to have easy access to what was agreed to.
The platform also facilitates the renegotiation and modification of contracts so they can be changed as business conditions change. This allows for a more responsive business environment, diminishes the loss of SPA customers and promotes additional sales under existing contracts.
Rebate Claiming and Auditing
Two methods are currently used to calculate the rebate due a distributor. Cost of Replenishment calculates the cost to replace the item in a distributor’s inventory at their current pricing levels; it is the method most widely used in the industry today. Cost of Acquisition links the rebate claim to a stock order previously placed by the distributor to reflect their true initial investment in the product.
Jigsaw facilitates both processes. By so doing, Jigsaw is able to eliminate the cause of most of the payment disputes that exist for manufacturers today, removing the need for distributor deductions. All claims are audited in advance, so distributors can clearly identify claims that will be rejected or calculated at different rates in advance of their submission. Additionally, the administration costs required to process rebates can be reduced by as much as 80%.
Sales and Profitability Analysis
Ultimately, SPA’s are about pricing discounts made in the hope that they are wise investments. However, with limited infrastructure, contracts can be mis-managed or not managed at all. As a result, many manufacturers find themselves inundated with thousands of contracts, with no assurance that all of the product discounts are even necessary.
Jigsaw is able to review your contracts and clearly identify where the contracts are strong and where they are weak. We can pinpoint unnecessary discounting that was offered with the best of intentions, and sustained through poor management. Finally, Jigsaw can help you both eliminate unnecessary discounting and create an ongoing environment of proactive SPA management.
Consider your total rebate annual liabilities. Now consider reducing that liability by 10%-20% without losing any sales revenue. That’s the power of Jigsaw Systems.