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Avoiding the “Priceberg” | PROS

Imagine the iceberg threat faced by ships. Typically, 10% of an iceberg is visible and 90% is hidden under the surface, and it’s the hidden portion that can be so dangerous.  Just as today’s sea captains use advanced technologies to navigate threatening waters – and avoid the threat of icebergs – companies also now have advanced technologies to navigate the hidden factors that affect their business.

Apply this to the business world. There are so many factors to consider when identifying the costs associated with creating a product or service. Consider the “pricebergs” of hidden costs – like freight, rebates and other elements – and how they may affect your profitability.

The visible 10% of the priceberg represents the actual price, volume and possibly a rough estimated gross margin of the products the company is selling. But below the surface, cost-to-serve elements are often hidden from the eyes of the pricing analysts or business controllers. This could include freight, payment terms, storage, rush-orders, packaging, currency fluctuations, rebates, support services, Incoterms (International Commercial Terms) – and the list goes on.

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Avoiding the “Priceberg”.

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