BW Racer: one margin rule per line in a made-to-measure furniture catalog
The ergonomic furniture catalog that swapped a single markup for a margin rule per line, with the price calculated before the proposal reaches the customer.
BW Racer designs and sells ergonomic furniture: lines that turn at different paces, high-grade material and custom design for those who ask for it. It is the kind of assortment that does not accept a single percentage — and it is the retail problem that shows up long before the size of the chain.
The change started with the size of the yardstick: instead of one markup for the whole catalog, each line got the margin policy its turnover requires.
Who BW Racer is
What the customer's website publishes about its operation, and what that demands of whoever sets prices there.
- Ergonomics and comfort as a product priority
- What is sold is the difference the furniture makes for someone using it all day. The price has to sustain that standard, and a discount handed out on the spot to close the sale is what erodes it first.
- Functional, custom design
- Made-to-measure design is its own composition: another material, another measurement, another finish. Each has a cost that the standard item's price list doesn't know about.
- High-grade materials
- High-spec material weighs the most on cost and moves the most from one purchase to the next. When the price stays still and the material goes up, margin falls without anything in the store indicating it.
- Lines with uneven turnover
- The chair that sells every week and the line that sells once a quarter do not accept the same margin. A single markup treats both as if they sold at the same pace, and it is always the slow-turnover one that pays the bill.
What a single markup charges a catalog like this
Four situations faced by those who sell an assortment with lines turning at different paces.
These situations belong to the format of the operation, not to a picture of what the customer did before: what it did is not public, and this page only states what can be checked.
- The single percentage applied to the whole catalog
- The same markup over lines that turn in different ways leaves margin on the table where there was room and blocks the sale where there wasn't. Both losses happen at the same time, and neither shows up on its own in the result.
- The material cost that changes between two purchases
- High-grade material is what fluctuates the most. While the sale price remains the previous catalog's, every closed proposal carries the margin that made sense at the last purchase.
- The made-to-measure project quoted outside the system
- Customization becomes a new spreadsheet, with a margin estimated on the spot. The number the customer accepted becomes a reference for the next similar order, without anyone having checked the math.
- The discount granted to close the proposal
- Without a floor per line, the discount comes from the judgment of whoever is in the negotiation. The sale happens; its margin is only known later, along with the month's others.
What changed with the rule per line
A catalog with uneven turnover stops being priced by a single percentage — it is the process whose rollout and support BW Racer rates in its testimonial.
This is the method Revema rolls out, in the order it enters the operation.
Each line gets its own margin rule
The rule stops being a catalog percentage and becomes each line's policy: what turns fast accepts a lower margin because volume responds, and what turns slowly carries the margin its turnover demands.
Material cost enters at today's value
The suggested price is calculated on what the material costs now, and not on the record of the last purchase. When the input changes, what needs a decision shows up highlighted.
The made-to-measure project comes out of the same calculation
The composition of the custom item enters with the material and finish it carries, and the margin comes from the rule of the line it belongs to. The quote stops being born from a blank spreadsheet.
The discount has a floor, and the floor is known beforehand
Each line now has the lowest price the company accepts to charge on it. The negotiation continues, with the difference that the limit is on screen before the proposal goes out.
What the operation says
Revema does not yet publish a measured percentage for the operation of BW Racer. What is published is the assessment of someone who followed the rollout, and that is what this section shows.
The REVEMA team's support was exceptional throughout the whole implementation. The platform is intuitive and the results exceeded our expectations. We strongly recommend it.
The numbers Revema measures in each operation are in results, and the companies that have already left the spreadsheet are in clients.
This case's sector: retail
The case proves what the segment page claims; the segment page shows the whole calculation, with the sector's inputs and a worked example with numbers.
In retail the price is public. It is on the shelf tag, in the weekly flyer and on the e-commerce screen, and the customer compares yours with the corner store's item by item — not by the category's average margin.
Further reading
The blog covers the same subjects with the math up front: the cost that goes into the price, the margin that is left and what changes when the rule starts being calculated.
Who does this calculation every day
None of what is written above is hard to calculate once. What is hard is redoing the calculation on every item whenever a cost changes — and that is when the price goes back to being inherited from the previous month with an adjustment on top.
RevPrice does that work in a retail operation: it recalculates markup, contribution margin and break-even point with every invoice entry, shows the effect of a discount before it is granted and warns when an item starts selling below the floor.
The other cases
People looking for their own sector often end up at the neighboring sector's case. These are the other published cases, each with its operation and its number.
- DistributorComercial PassarellaThe auto parts distributor that started closing orders knowing the margin each one leaves, and measured an 8% higher contribution margin after replacing the price list with the rule.What was measured: 8% higher contribution marginRead the case
- ManufacturingAGTechnologiesThe engineering-to-order operation that started building price from the product structure, and measured a 5% higher margin already in the first quarter after rollout.What was measured: 5% higher margin already in the first quarterRead the case
Want to see this calculation in your operation?
A conversation with people who calculate margin in retail and distribution every day, with your numbers on screen.