Exchange rate up again? How to reprice without wrecking your margins

Every time the exchange rate moves or a factory raises its price, many distributors open Excel and recalculate everything. Hundreds of products, several price tiers, formulas copied from last year. It takes days, and one wrong cell can mean a product sells at a loss for months.

The solutionPrice lists recalculated in minutesSee how it works

The order of work is actually simple.

1. Start from the right landed cost

Landed cost = factory price × exchange rate × cost factor

The cost factor covers freight, import duty and everything else until the goods are in your warehouse, for example 1.12. Work it out from real import data rather than a guess, and update it when freight changes.

2. Check the margin at your lowest price, not at retail

The margin at the retail price nearly always looks healthy. The danger is the lowest price you actually sell at: the bulk tier, or a special price for one or two big shops. That's where the margin disappears first when the rate rises.

3. Set a margin floor

Choose one minimum margin, for example 15% at the lowest price. Every product that falls below it should be flagged before the price list goes out, then decided on: raise the price, ask the factory, or accept it knowingly.

4. Look at rivals before you send it

A new price that protects your margin but sits far above rivals makes your salesmen's job hard. Compare with the cheapest rival per product, especially in the tier shops use most.

5. Test the rate before it happens

Don't wait for the rate to rise. Work out two or three scenarios, for example the rate up 3%, 6% and 10%, so you know which products fall below the floor first, and when the price list needs to change.

All of this in minutes. In the Pricing app, one exchange-rate change recalculates the landed cost and margin of every product at its lowest price, flags those below the floor, and shows the cheapest rival. You can drag the rate to test scenarios before any price changes.

The price list is one of the best jobs to automate first, as we explain in how to use AI in your company.