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Hardware Retailing published Mike Aylen’s fourth “Inside the Margin” article, advising retailers to create customer groups and set discounts by product category rather than applying one rate across departments. Aylen says regular reviews and time-limited trial groups can help retailers pursue contractor sales while limiting unnecessary discounts; the article does not report measured results from a specific retailer program.
Hardware Retailing has published the fourth article in its “Inside the Margin” series, in which industry expert and NHPA strategic consultant Mike Aylen recommends that retailers set customer groups and product-category discounts to pursue contractor sales without giving away margin across the board. The piece is industry guidance, not a report of measured results from a new pricing program.
Aylen recommends that retailers starting from scratch keep customer groups to 10 or fewer, apart from individual plans for customers whose volume warrants separate treatment. Groups could reflect the trades a store serves, such as plumbers and painters, or different sales levels within a trade. He describes one retailer that used large, medium and small plumber groups with discount rates tied to monthly sales.
Before assigning customers, retailers should define the criteria for each group, including the customer’s work and purchasing activity and, where relevant, sales volume. Aylen says stores can use customer sales reports to review allocations at least twice a year, recognize loyalty, and identify customers whose spending has fallen. He also suggests estimating a customer’s potential spend, comparing it with what they currently buy, and discussing missing product purchases with them.
For new customers, Aylen proposes a 60- or 90-day trial group rather than immediately granting the best permanent discount. Once groups are established, he advises setting rates by department and, where needed, by class, product line or individual SKU. Retailers can use pricing software or a spreadsheet to check proposed prices, he writes. Any SKU-level exception should have an expiration date and should not be locked at a fixed price.
How Category Pricing Can Protect Margin
The advice addresses a practical tension for hardware retailers: discounts may help win or grow contractor business, but the same rate can have very different effects across product departments. Aylen argues that a single storewide or trade-wide discount can cut prices unnecessarily on some items and leave little room on others, particularly products he describes as low-margin and high-value.
His examples illustrate the risk, rather than establish a universal pricing rule. Aylen says he has seen retailers offer 15% off retail across departments to plumbers and painters, which he warns could make hot water units or ladders unprofitable. He also recounts a plumbing plan priced at cost plus 28% under which one clamp sold for 94 cents, while a major competitor charged $1.64. The point is that both over-discounting and pricing above the market can weaken a plan’s intended effect.
For store owners, the proposed approach links discounts to customer activity and the economics of the products being sold. Whether it increases sales or preserves margin in practice will depend on each retailer’s costs, local competition, customer behavior and the accuracy of its pricing data.
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Inside the Margin Series
The article is part of Hardware Retailing’s “Inside the Margin” series, which Aylen describes as examining ways to grow sales and protect margin among contractor and professional customers. Its focus is the design and maintenance of category price plans, not a change in a retailer’s pricing policy or a newly announced software feature.
Aylen names Margin Master and Epicor Pricing Planner as tools retailers might use to model department-level prices, while noting that the calculations can also be done manually in Excel. He advises checking prices without rounding during the analysis, then refining discounts at increasingly specific product levels where needed. The article presents these as options and recommendations, not as independent evaluations of the software.
““Limiting the number of customer groups will make it easier to do regular reviews of the activity in each group and make the necessary adjustments when needed.””
— Mike Aylen, industry expert and NHPA strategic consultant
No Pricing Results Reported
The source article offers examples and recommendations, but does not provide a dataset, before-and-after results, or a measured margin or sales impact for the pricing methods it describes. It is not clear how widely retailers use these approaches or how outcomes vary by store, market, product costs or customer mix.
The article also does not specify universal discount thresholds for trades or departments. Aylen’s examples are presented to show potential pricing problems; they should not be read as evidence that a particular discount will always produce a loss or that one competitor’s price is representative of a market.
Retailers Must Set and Review Plans
There is no announced rollout, policy change or follow-up date in the source. Aylen’s recommended next steps for retailers are to define customer-group criteria, examine sales by customer, calculate department-level rates, and enter approved plans into their pricing system or spreadsheet. He advises reviewing customer activity at least twice a year and adjusting allocations when the data warrants it.
The article is the fourth installment in the series. Aylen says he looks forward to addressing another topic in a future article, but the source does not identify that topic or give a publication date.
Key Questions
What is the article about?
Mike Aylen’s industry viewpoint sets out a method for grouping contractor and professional customers and tailoring discounts by product category, with the stated aim of growing sales while protecting margin.
How many customer groups does Aylen recommend?
For retailers building a system from scratch, Aylen recommends no more than 10 groups, with separate plans for individual high-volume customers where needed. He says the groups should reflect the store’s market and customer activity.
How often should retailers review customer allocations?
Aylen recommends reviewing group activity at least twice a year, using sales-by-customer reports to spot changes, including declining sales.
Why does he advise against a single discount across departments?
His argument is that departments differ in product prices and margins, so one rate may discount some items too deeply while being unnecessary on others. The article gives examples but does not quantify typical results across retailers.
Does the article prove that category pricing increases margins?
No. It presents expert recommendations and examples, but does not report measured outcomes from a specific program or establish a guaranteed sales or margin effect.
Source: hardwareretailing.com
