Logistics Pricing Case Study

An international supply chain management company was struggling to sell its used equipment quickly and with adequate margin, impeding profitability and detracting from overall productivity.  The company wanted to sell trucks faster, with greater margin, and with the optimal investment to prepare the asset for sale.

SBI recognized two major areas of opportunity: first, in properly modeling the resale value of different vehicle classes and conditions across multiple geographies, where significant pricing disparities exist, in order to optimize pricing and reduce a significant gap between the selling price and the listing price. The second area was positioning the vehicles to target and align to specific buyer personas who would be willing to pay more for a given asset.

SBI conducted in-depth market research to develop a dynamic pricing model that adjusted baseline pricing according to geography, market trends, vehicle attributes, and time to sell. SBI also conducted a buyer segmentation to identify the industries, buyer’s age, location, and readiness to buy that would result in the maximum selling price with the minimum cost to recondition.

Implementing a dynamic pricing model and reducing out-servicing costs for used vehicles generated an additional $20M annually. Onboarding a dedicated pricing and inventory specialist ensured optimal supply management while freeing up sales resources to pursue other new business.