INDUSTRY VIEW price accurately and adjust pricing dynamically is no longer optional, it is central to sustaining growth.
When pricing misses the mark The risks of getting pricing wrong are well understood. Research from SPARXiQ shows that most distributors charge customers either too much or too little. Overpricing damages loyalty and limits repeat business, while underpricing may help close deals but quietly erodes profitability and leaves value unrealised.
However, while the risks of sub-optimal pricing are widely recognised, the factors that lead to it are often far less visible. Revenue can appear healthy even as margins shrink. In other cases, margins look protected on paper, yet sales teams struggle to compete in the market. Left unaddressed, these disconnects undermine both financial performance and confidence across the organisation.
Why traditional pricing no longer works Many distributors continue to rely on pricing methods that are increasingly out of step with today’ s market dynamics. Spreadsheets, historical benchmarks and cost-plus formulas remain common, despite their inability to reflect real-time changes in costs or demand. These approaches are slow, manual and prone to error, particularly in environments where energy prices, transport costs and supplier terms can shift rapidly.
There is also a structural challenge within organisations. Sales teams are under constant pressure to discount in order to secure deals, while operations teams absorb the impact of rising input costs and supply chain disruptions. When pricing decisions are made in silos, they become reactive compromises rather than strategic choices. The outcome is often pricing that supports short-term objectives but weakens long-term performance.
What effective pricing should look like In an ideal scenario, pricing is informed by real-time data and a shared understanding across the business. Sales, finance, operations and supply chain teams work from the same information, aligned around common objectives. Pricing decisions reflect up-to-the-moment costs, inventory levels and demand patterns, rather than assumptions or outdated models.
For employees, this creates clarity and confidence in day-to-day decision-making. Sales teams can quote prices knowing they are competitive and profitable. Finance leaders gain clear visibility into margin performance. Operations teams understand how production decisions influence pricing flexibility. At the heart of this model is a single, trusted source of truth that connects decisions across the organisation.
The solution is one many distributors already have in hand Most distributors already have the foundation for this approach in place, even if they have not yet applied it to pricing. ERP systems are typically used to manage warehousing, inventory, order processing and supply chains, but they also contain the data required to support more intelligent pricing decisions.
By extending ERP into pricing, distributors can directly link prices to inventory positions, costs and forecasts. Slow-moving products can be priced more strategically to stimulate demand, while high-demand
By extending ERP into pricing, distributors can directly link prices to inventory positions, costs and forecasts. Slow-moving products can be priced more strategically to stimulate demand, while high-demand items can support stronger margins without alienating customers.
items can support stronger margins without alienating customers. When supplier costs change, pricing can be adjusted automatically to protect profitability. Forecasting capabilities also allow pricing strategies to be planned in advance, rather than formed reactively once margins are already under pressure.
This shift is not theoretical. One example can be seen in Qatar’ s ceramics sector, where Uniceramic, the country’ s leading local manufacturer moved away from estimate-based costing that relied on broadly dividing energy and raw material costs across production. By defining clear production and cost standards and capturing actual material usage, energy consumption and labour time for every production run, the business gained precise visibility into the true cost of each product. This transparency enabled it to protect margins, price more competitively and deliver fair value to customers, all while maintaining strong financial discipline.
The next acceleration with AI and cloud ERP The evolution of pricing is set to accelerate further as AI becomes embedded directly into ERP systems. Teams will increasingly be able to interact with ERP platforms conversationally, exploring customer behaviour, supply trends and demand forecasts without relying on complex reports. Pricing decisions can become more predictive, scenario-driven and strategic, rather than reactive.
Cloud-based ERP is the foundation for this shift. It enables faster innovation, easier integration of AI capabilities and continuous improvement without the constraints of legacy infrastructure. For distributors considering their next move, transitioning ERP to the cloud is a practical way to future-proof pricing and decision-making.
Pricing as a strategic advantage As growth accelerates across the Middle East, distributors must become more deliberate in how they approach pricing. The good news is that many already have the systems needed to do this, but their potential remains underutilised. By treating pricing as a strategic discipline, enabled by ERP and strengthened by AI, distributors can protect margins, remain competitive and convert regional growth into sustainable value. •
INTELLIGENT TECH CHANNELS MIDDLE EAST AND AFRICA 37