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In a Hardware Retailing industry viewpoint, consultant Mike Aylen recommends that hardware retailers set contractor discounts by customer group and product category rather than applying a blanket rate. He says retailers should use sales data to assign customers, review plans at least twice a year and put expiration dates on SKU-level exceptions.
Hardware Retailing has published a new industry viewpoint in which Mike Aylen, an industry expert and NHPA strategic consultant, advises retailers to set contractor discounts by customer group and product category. The fourth entry in his “Inside the Margin” series argues that tailored price plans can help retailers pursue customer sales while avoiding unnecessary discounts on low-margin or high-value goods.
Aylen recommends that retailers starting a customer-group system limit it to no more than 10 groups, with separate arrangements for high-volume customers where needed. Groups should reflect the retailer’s market and customer activity. His examples include plumbers and painters, alongside builders, concrete workers, property maintenance businesses and local councils.
Retailers should define the criteria for each group, Aylen writes, using factors such as a customer’s work and sales volume. He describes a retailer that divided plumbers into large, medium and small groups and based discount rates on monthly sales. He also suggests recognizing loyalty: a customer who falls into a middle sales tier but gives the retailer all of its business could be offered a higher tier’s terms.
Aylen recommends reviewing customer sales information at least twice a year, using reports to identify changes and contact customers whose purchases have declined. For new customers, he proposes a 60- or 90-day trial group rather than granting the best permanent discount immediately. Customers can then demonstrate whether they meet the retailer’s criteria.
How Category Pricing Can Protect Margin
The article’s central point is that a single discount across all departments may reduce prices where it is unnecessary or leave too little margin on particular products. Aylen warns that the same discount can have very different effects across a store’s assortment, especially when contractors buy low-margin, high-value items.
As examples, he says a global 15% discount could leave a plumber with little room on hot water units, while the same rate could lead to ladder sales at a loss for a painter. Those are examples from Aylen’s industry experience, not reported outcomes from a new study. His proposed approach asks retailers to calculate rates separately by department and, where needed, by class, fineline or individual SKU.
For retailers, the stakes include both customer retention and profitability. A well-structured plan can make pricing offers more specific, while regular reviews give staff a reason to discuss changing customer needs and potential purchases. The source does not quantify the sales or margin results retailers can expect.
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From Customer Groups to Product-Level Rates
Aylen’s article is practical guidance, not an announcement of a new pricing tool or a report of measured industry results. It forms the fourth article in the “Inside the Margin” series and focuses on protecting margins while growing sales among contractor and professional customers.
After customer groups are defined, Aylen says retailers should set a discount rate for each group at the department level. He names Margin Master and Epicor Pricing Planner as software that can help model selling prices, while saying the work can also be done manually in Excel. He recommends turning off rounding when modeling discounted retail prices so the resulting calculations can be reviewed accurately.
Aylen recounts one retailer that used a “cost plus 28%” plan across plumbing items. In his example, a clamp was priced at 94 cents, compared with a price of $1.64 from what he called its main corporate competitor. The article does not identify the retailer, competitor, product specifications or date of the comparison, so the figures should be read as an illustration rather than a current market benchmark.
““The main advantage is that you can use it to grow sales.””
— Mike Aylen, industry expert and NHPA strategic consultant
Results and Benchmarks Are Not Reported
The source presents Aylen’s recommendations and examples, but does not provide a controlled analysis, retailer-wide data or quantified results showing how much category price plans change sales or margins. It also does not state the article’s publication date in the supplied material.
The clamp comparison lacks details about the specific product, market and timing, and the article does not explain how its example discount rates would apply to other retailers. Actual outcomes would depend on each store’s costs, local competition, customer purchasing patterns and product mix. No specific implementation timeline or results from retailers adopting the approach are provided.
Retailers Can Review Plans Twice Yearly
Aylen’s recommended next steps are for retailers to set customer-group criteria, model category discounts, enter the resulting plans into their pricing system and assign customers accordingly. Those using SKU-level exceptions should attach expiration dates, rather than locking in a fixed price without an end point.
Once plans are active, retailers can use customer sales reports to review group assignments and pricing at least twice a year. The article says declining purchases can prompt a conversation about why a customer’s spending has changed and what additional products the retailer might be able to supply. Aylen says the “Inside the Margin” series will address another topic in a future article, but the supplied source gives no date or subject for it.
Key Questions
What is the article recommending?
Mike Aylen recommends grouping contractor and professional customers using clear criteria, then setting discounts by customer group and product category rather than applying one rate across every department.
How often should retailers review customer groups?
Aylen recommends reviewing customer sales and group assignments at least twice a year, using sales-by-customer reports to spot changes.
How should a retailer handle a new customer?
Aylen suggests a 60- or 90-day trial group so a new customer can demonstrate that it meets the criteria for a permanent pricing tier before receiving the best ongoing deal.
Does the source show that category pricing increases margins?
No quantified results are provided. The article offers industry advice and examples, but does not report measured sales or margin changes across retailers.
What does Aylen advise for SKU-level price exceptions?
He advises retailers not to lock an exception at a fixed price indefinitely and to use an expiration date for each SKU-level exception.
Source: hardwareretailing.com
