Broyhill sets tiered pricing based on volume
By Thomas Russell -- Furniture Today, March 23, 2009
LENOIR, N.C. — Broyhill Furniture Inds. has announced a new tiered pricing structure to its dealer base, giving its larger customers the best prices.
Effective April 5, the new pricing structure will be based on the amount of orders dealers place over the most recent 12 months of shipments.
Broyhill disclosed the plan in a letter sent to dealers, copies of which were obtained by Furniture/Today. Officials at Broyhill and company parent Furniture Brands International did not return calls seeking comment.
However, in the letter to dealers, Broyhill Vice President of Sales Mark Stephens said the pricing structure and other changes were a reflection of Broyhill's desire to grow its business with dealers as “aggressively and efficiently as possible.” Stephens also said that with its products and programs, “Broyhill is poised to be your most valuable partner for now and the future.”
Under the new pricing structure:
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Tier A customers, with $1 million or more in Broyhill shipments during the most recent 12 months, will receive a 5% price decrease from current prices.
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Tier B customers ($250,000 to $999,999 in shipments) will receive no price increase or decrease.
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Tier C customers ($75,000 to $249,999) will receive a 5% increase over current prices.
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Tier D customers ($74,999 or less) will receive a 10% increase over current prices.
In the letter to dealers, Broyhill said it will review shipments quarterly, which will allow dealers to move into a more favorable pricing bracket as their sales grow.
Starting April 5, the company said, it also is reallocating its contributions to dealers for promotional pricing and in-store branding materials. The amounts are Tier A, 3% of shipment volume; Tier B, 2%; Tier C, 1.5%; and Tier D, no accrual.
The company added that it is more aggressively pursuing online ordering capabilities to eliminate less efficient and less accurate paper orders. It also is implementing a fixed rate of 1.75% on returns and allowances. It is offering retailers a pricing incentive to participate in both programs.
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