Margin on every case, not just on average.
Distributors and retailers earn the gap between what they pay suppliers and what they charge customers, after freight and shrink. Supplier costs, fuel and commodity items move every week, while price lists and cost plus contracts move far less often. Vadar Alpha prices each purchase, stock level, route and price against today's market.
A distributor or retailer buys from many suppliers and sells to many customers, often on a margin of a few cents on the dollar. When a supplier raises a price, the cost lands on the next delivery. The price to the customer waits for the next list, the next contract review or the next cost plus reset.
Contracts priced at cost plus a markup often use last month's cost, so a rising market eats the markup.
Proteins, dairy, produce and fuel follow markets, but sit on price lists that change far less often.
Buying ahead, holding stock and running routes all cost money that the average margin hides.
Vadar Alpha tracks the cost of each commodity linked item against the market. When the cost moves past a set range, sales gets the new target price for each customer, with the margin at stake in dollars.
| Target | Without | With Vadar Alpha | Tolerance (low) | Tolerance (high) | |
|---|---|---|---|---|---|
| Jan | 18.0% | 18.0% | 18.0% | 17.0% | 19.0% |
| Feb | 18.0% | 17.2% | 17.8% | 17.0% | 19.0% |
| Mar | 18.0% | 16.1% | 17.4% | 17.0% | 19.0% |
| Apr | 18.0% | 15.4% | 17.3% | 17.0% | 19.0% |
| May | 18.0% | 16.6% | 17.9% | 17.0% | 19.0% |
| Jun | 18.0% | 17.8% | 18.3% | 17.0% | 19.0% |
| Jul | 18.0% | 18.2% | 18.4% | 17.0% | 19.0% |
| Aug | 18.0% | 16.9% | 17.9% | 17.0% | 19.0% |
| Sep | 18.0% | 15.8% | 17.5% | 17.0% | 19.0% |
| Oct | 18.0% | 15.2% | 17.4% | 17.0% | 19.0% |
| Nov | 18.0% | 16.4% | 17.8% | 17.0% | 19.0% |
| Dec | 18.0% | 17.1% | 18.1% | 17.0% | 19.0% |
We read your purchase orders, stock levels, routes, price lists and customer contracts from the systems you already use.
Commodity linked items are priced against their markets, and each customer price against what the item costs to replace today.
Buyers, inventory planners and sales get instructions. We score each result against a baseline your finance team agrees on.
| Margin gain | |
|---|---|
| Buy | $2.1M |
| Stock | $1.4M |
| Sell | $3.6M |
| Risk | $0.9M |
Each gain is tied to the decision that produced it, from the purchase order to the customer price, and measured against a baseline your finance team agrees on. We count each dollar once.
Distribution and retail run on thin margins across thousands of items. Most of the margin swing comes from a small set of items whose cost follows a market, and from how fast those costs reach the price.
Supplier prices for commodity linked items move with their markets. Buying ahead of a rise, or waiting through a fall, changes the cost of every case sold that month. Vadar Alpha prices each purchase order against the market and the stock already on hand.
Holding more stock protects service but ties up cash and adds shrink. Vadar Alpha prices the cost of each extra day of stock, and the freight on each route, into the buying and pricing decisions.
A price set from last month's cost loses margin in a rising market. Target prices that update with replacement cost let sales move contract and list prices when the cost changes, with the margin at stake on each customer.
Fuel for the fleet and the commodity items on fixed price contracts are exposures. Vadar Alpha sizes each hedge to the volume you will really deliver, so a price spike does not reach the year's margin.
Every decision arrives as a plain instruction, with the dollars at stake, the reason, and the point at which it stops paying.
Measured asCost pass-through is the share of a supplier cost increase that reaches the customer price, and how fast it gets there. A distributor that passes on a cost rise a month late pays for that month out of its own margin.
Cost plus contracts add a markup to a reference cost. When that cost is last month's, or an average, a rising market means the customer pays less than the item costs to replace. Vadar Alpha prices each contract against today's replacement cost, so the gap is visible before it is lost.
The items whose cost follows a market: proteins, dairy, produce, fats and oils, paper and packaging, metals and fuel. In most catalogs a small share of items like these drives most of the margin swing.
No. Vadar Alpha reads from the systems you already use, such as your ERP, warehouse system and pricing tools. We start with one decision, such as pricing one commodity category, and show its value on your own data in days.
A 30 minute conversation to see where your margin leaks and whether we can help.
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