Price Protection/Stock Rotation Programs Lifecycle Management
Streamlined and automated process
Eliminate claims overpayments
Validate claims
Payouts can be calculated with or without explicit claims being submitted
Calculate and value channel inventory
Analytics including usage metrics, program accruals, and exposure
Streamline Price Protection, Stock Rotation, and Other Inventory Programs
In many categories and markets, OEMs reduce prices due to competitive pressures or end-of-life product lifecycles. Channel partners such as distributors, dealers, and retailers often hold inventory of these products, but purchased at the previous, higher price. To ensure their channel partners do not incur losses or return unsold inventory, OEMs often extend inventory and price protection programs to mitigate partners’ risk. These include the following incentive programs.
Price protection program
A price protection program is a vehicle through which an OEM compensates a distributor following the reduction in sales price of a specific product. Upon a price reduction, distributors may still have inventory at the older, higher price. Rather than return all the goods, vendors provide price protection on these products in the form of a discount to reflect the new, lower price.
Stock rotation
Stock rotation refers to a channel partner’s contractual right to return up to a certain percentage of products to the supplier over a stipulated period. These rights are intended to ensure that a partner is not overburdened with excessive or obsolete inventory from the supplier that granted the stock rotation rights.
Ensure Price Protection/Stock Rotation Program Compliance
Price Protection, Stock Rotation, and similar channel inventory incentive programs are sometimes exploited with fraudulent claims. The key to preventing abuse is having the ability to calculate inventory levels and value channel inventory accurately, at any time, on demand. This can be challenging when goods have been shipped at many different prices and multiple price changes may have happened while the partner held the goods in inventory.
Incent4’s Inventory Programs module automates and streamlines the following processes.
Calculating inventory levels
Validating claims
Revaluing the residual inventory, reducing or eliminating fraudulent or incorrect claims payments.
