Spot the Margin Leaking Through Your Quoting
The problem, in your words
"Slow quotes lose deals. Most quotes die in follow-up limbo."
A customer asks for a price. The rep checks the last order, eyeballs a margin, sends a number. Sometimes the number's too low — you win the order and give away points you'll never see again. Sometimes it's too slow — the customer bought elsewhere before you replied. You feel both in the gross-profit line at month-end. You can't point to where they happened.
Why it persists
Pricing lives in two places: people's heads and the last invoice. There's no record of the quotes you lost — only the orders you booked, which makes the leak invisible by design. Discount authority is informal. Two reps quote the same item to the same kind of customer at different prices, and nobody reconciles it. Nobody measures quote-to-order, so nobody manages it. The money leaves quietly.
There's a second reason it hides: speed and price pull against each other, and the rep splits the difference under pressure. A customer's on the phone wanting a number now. The rep shaves the margin to close it fast, or stalls to check and loses the moment. Either way you pay — once in points given away, once in deals that died waiting. Both costs land in the same gross-profit line, indistinguishable, so neither gets fixed.
The play
- Capture every quote — won and lost. If quotes live in email, route them through one logged path. You cannot fix what you cannot see, and right now you can't see the half that lost.
- Measure turnaround. Time from request to quote sent. A same-day quote at a defensible price beats a perfect quote that lands Thursday.
- Find the variance. For your top items, chart the spread of quoted margins across reps and customer types. A tight spread means discipline. A wide spread is the leak, drawn on a graph.
- Set guardrails, not handcuffs. Floor prices and target margins by segment. Flag below-floor quotes for a quick review. Keep the rep's judgment; remove the guesswork that costs you points.
- Speed first, then precision. Get a defensible number out fast. Tighten the number once you can see the spread.
How to measure it
- Quote turnaround time — request to quote sent.
- Quote-to-order conversion — by rep, segment, and product line.
- Margin variance — the spread between your 25th- and 75th-percentile quoted margin on a given item. Wide spread, big leak.
- Gross-profit dollars per order vs. cost per order — the real profit lever in distribution (Electrical Wholesaling).
The number it moves
The deep truth from Electrical Wholesaling: the #1 profit lever isn't revenue or even gross-margin percent — it's gross-profit dollars per order relative to the transaction cost per order. Quoting controls the first half of that ratio. Order automation (Play 01) controls the second.
Margin discipline is also what separates the field. Fewer than one in ten distributors clear a 10% operating margin (Electrical Wholesaling's "10% club"). The ones who do measure their pricing instead of trusting it.
The win here isn't software. Pricing engines exist (Pricefx, Zilliant) and have their place. But most of the recovery comes from simply measuring the spread you're already living with — and setting a floor under it.
[PLACEHOLDER: MarginArc client quote-variance audit — to be added]
You can't defend a price you never recorded. Start by writing the quotes down — winners and losers both.