What a $454M distributor’s quote book actually hid
Industry-wide, mid-market distributors leak an estimated 100–300 basis points of margin a year (Distribution Strategy Group). We didn’t model an average — we took one distributor’s full year of quotes, read-only, and measured exactly where it goes.
Three numbers, all from their own quotes.
of revenue shipped below cost — 6,700 lines the system never flagged.
of revenue priced under 20% margin — 23,894 thin lines stacking up unnoticed.
of high-volume SKUs show a price spread over 25% — same part, same year, priced by different people on different days, with no shared guardrail.
The same part, priced −43% to +94%
That’s the margin on the identical 6″ import pipe, sold to 30 different customers in one year. A 2-600 ball valve ran −8% to 57% across 26 customers; a hex plug, 23% to 73% across a thousand-plus quotes. Different reps, different days, no guardrail — and no shared logic behind any of it.
$9.5M recoverable — from their own deals
We re-priced only the underpriced lines up to that exact SKU’s own median won margin — never above what another customer already paid for the same part — plus floored the below-cost lines to break-even. Win held constant, on actually-won deals only. Conservatively, that’s $9.5M in measured recoverable margin. At a distributor’s ~3% net margin, recovered gross margin drops almost straight to the bottom line.
What this proves — and what it doesn’t
It proves detection and consistency recovery: the margin is recoverable because their own book already shows the market bears it for that exact SKU. It does not claim we can push prices above what they already charge — that needs a live test, and it’s out of scope. The number is a floor on the opportunity, not a forecast.
Want this for your own book?
Send a read-only export of your catalog and a year of quotes. We’ll send back the same report — your below-cost lines, your under-margin revenue, and your most inconsistently priced SKUs. Free, no obligation.
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