The price list went up 5%. What customers actually paid went up 1%.

Between the published price and the cash that lands there sit a dozen small deductions, each individually defensible, and together the largest margin decision nobody consciously makes.

By Steve 5 min read
Abstract bridge artwork for The price list went up 5%. What customers actually paid went up 1%.

A price increase is one of the few decisions a business can make that lands entirely in profit. Which is why it is so disorienting when the increase goes out, no customer walks, and the gross margin percentage barely moves. The uplift was real. The realisation was not. The usual explanation offered internally is that costs rose too, or that mix shifted, or that a few big accounts were held back for good reasons. Sometimes that is true. More often the increase was applied to a number that very few…

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