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· N Khanna

Your website is still selling at last month's price

A price increase reaches the system you invoice from the day it's approved. It reaches your wholesale storefront when somebody has time to upload a spreadsheet. On an illustrative distributor taking $75,000 a week online, a 5% increase that went live on the storefront 4 weeks late came to $15,000, and most of it was never billed.

A loose ink and watercolor drawing of a tall warehouse shelf stacked with plain cardboard cases. 1 faded blank paper tag hangs from the middle shelf on a string. A wooden stepladder stands beside the shelf with a hand-held label gun resting on its top step, unused. An open green money box, the only colored object, sits at the foot of the ladder with a few coins in it.
The short versionIf your wholesale storefront gets its prices from a file somebody uploads, a price increase that goes into your invoicing system on January 2 doesn't reach the storefront until that upload happens. Until then it keeps taking orders at the old price. On an illustrative distributor taking $75,000 a week through its storefront, the upload happened on January 30. That's 4 weeks and $300,000 of orders at the old price. On a 5% increase, the gap is $15,000, for 1 increase. The check takes 2 exports and 1 formula.

When I look at a wholesale business, 1 of the first things I do is put an item in the website cart. Then I look up the same item, for the same customer, in the system the invoices come from.

Usually the 2 prices match.

When they don’t, the difference almost always has a date attached to it. Somebody changed a price in 1 place, and the other place hasn’t heard yet.

4 weeks in January

The numbers below come from an illustrative distributor. It sells about $3,900,000 a year through a wholesale storefront, so call it $75,000 a week. Its main suppliers raised prices for the new year, and it passed a 5% increase on to its customers.

  • December 18. The increase is approved. The new price list goes into the invoicing system, effective January 2. That part takes an afternoon.
  • January 2. Every quote and invoice the invoicing system produces is at the new price. The storefront still shows the old one.
  • January 9. The person who looks after the storefront is also running the year-end stock count. The upload is on their list.
  • January 16. They start on the file. The storefront wants a different layout (1 row per item per price level, with its own column names), so the export gets reshaped by hand.
  • January 23. 1,800 items times 4 customer price levels is 7,200 rows. About 300 of them fail the import and get fixed 1 at a time.
  • January 30. The new prices go live on the storefront.

The upload was 1 job among several on 1 person’s desk, in the month they were also counting stock.

Price of 1 case in the invoicing system and on the storefront, January A step chart of the price of 1 case, indexed to $100, from late December to early February. The invoicing system line steps up to $105 on January 2. The storefront line stays at $100 until January 30, then steps up to $105 and matches. The shaded area between the 2 lines from January 2 to January 30 is labeled 4 weeks at the old price, with the arithmetic $300,000 of orders times 5% equals $15,000. Price of 1 case, before and after a 5% increase Illustrative distributor, indexed to $100 $105 $100 4 weeks at the old price $300,000 x 5% = $15,000 Jan 2 Jan 9 Jan 16 Jan 23 Jan 30 Feb 6 Invoicing system Storefront
Illustrative figures. The 2 lines match again once the upload goes live on January 30.

What happens to an order in the gap

A customer puts 30 cases in the cart at the old price and checks out. Depending on how web orders get into your invoicing system, 1 of 2 things happens.

  1. The order comes in with the web price on it. The invoice goes out at the old price and nobody notices. This version never shows up on any report.
  2. Your invoicing system reprices the order. The invoice comes out higher than the cart. The customer calls, and somebody issues a credit, because nobody wants to argue with a customer about what the company’s own website said.

Either way the business sells at the old price. The second way also costs a phone call and a credit memo.

The arithmetic

  • Storefront orders in the gap: 4 weeks at $75,000 is $300,000.
  • The increase they missed: 5% of $300,000 is $15,000.
  • That’s for 1 increase. If your suppliers move prices more than once a year, every move goes through the same upload.

That’s identified money. You could bill some of it back, but most owners won’t, for the same reason they issued the credit.

The same file usually carries your stock

If your storefront takes its prices from an uploaded file, it probably takes stock levels the same way, often once a night. So an item that sells out at 10 a.m. keeps taking orders until the next morning. Those orders turn into backorders or cancellations, and somebody calls each customer to explain.

I haven’t put a number on that, because it depends on how fast your best sellers turn. It’s worth counting for 1 week.

Where the 4 weeks come from

Both systems can take a price change in minutes. The 4 weeks sit in the handoff between them: an export, a spreadsheet a person reshapes, and an import that rejects rows.

The path a price change takes from the invoicing system to the storefront 4 boxes in a row joined by arrows: invoicing system, new price December 18. Price export, pulled January 16, and spreadsheet, fixed by hand, both highlighted with the note the 4 weeks sit in these 2 steps. Storefront, live January 30. A dashed line runs underneath from the invoicing system straight to the storefront, labeled a connector would do this in minutes. Where a price change waits Illustrative distributor, the January increase Invoicing new price Dec 18 Export pulled Jan 16 Spreadsheet fixed by hand Storefront live Jan 30 The 4 weeks sit in these 2 steps A connector would do this in minutes
Illustrative. The dashed path is the same price change read on a schedule instead of uploaded by a person.

The check you can run this week

This takes about an hour, and you can do it without us.

  1. Export today’s price list from your invoicing system, with item number, price level and price.
  2. Export the same from your storefront. Most platforms have a product or price export in the admin screens.
  3. Put both in 1 spreadsheet and match them on item number plus price level. Count the rows where the 2 prices differ.
  4. For your last price increase, find 2 dates: when it went live in the invoicing system, and when it went live on the storefront.
  5. Multiply your weekly storefront sales by the weeks between those 2 dates, then by the size of the increase.

If step 3 comes back with 0 rows, good. If it comes back with rows on a day when nobody changed a price, the 2 lists have drifted apart for good, and that’s worth fixing before the next increase.

Fixing it

The fix is rarely a new storefront. Most storefront platforms built for wholesale offer a connector or an API that can read prices from your invoicing system on a schedule. Setting that up is usually days of work, and after that the upload is something nobody has to remember.

If a connector isn’t possible yet, a smaller fix still helps. Put the storefront upload on the same checklist as the price change, with a person’s name and a date next to it. The price change isn’t done until both lists match.

What we’d look at

In a review, this is 1 of the first things I check, and it takes about 10 minutes. We run the comparison, date your last 3 price changes in both places and put a number on each gap.

My guess is your 2 lists don’t match today. I’ve been wrong before, and I’d like to hear what your count came back with.

We run this as a fixed-fee audit. $2,500, and if we find less than $7,500 a year we refund it.

See whether it fits your company