A 1% Price Increase Equals 8% More Profit: Anderson Lemos on Pricing Strategy for Manufacturers
Anderson Lemos spent 17 years in manufacturing, ten of them on the floor as a manufacturing and applications engineer, before moving into commercial roles. Today he helps manufacturers price their products and aftermarket parts the right way, so their plants produce healthy margins instead of guessing.
We get into why pricing in manufacturing is inherited instead of designed, why a McKinsey study found a 1% price increase can drive an 8% increase in profit, and why so many manufacturers are sitting on parts that have been mispriced for years without anyone noticing.
What we cover:
- Why pricing is one of the most underleveraged levers in manufacturing
- The "smoke detector battery" problem: why nobody touches pricing until it's a crisis
- Why aftermarket parts carry far higher margins than new equipment, and why that matters
- How to tell if you're overpriced versus underpriced on a given SKU
- Commercially available parts vs proprietary vs semi-proprietary, and how each should be priced differently
- Why a bad price on one item can cost you sales on everything else a customer would have bought from you
- How to arm your sales team with a defensible pricing strategy instead of "it costs this because it costs this"
- Real numbers: companies with a real pricing strategy seeing 5 to 8% improvement, sometimes millions of dollars a year
- Why cutting a SKU isn't always the right call, even when it barely sells
- The first step for any manufacturer who's been pricing the same way for 20 years
Notable quote: "Pricing in manufacturing is kind of one of those things you hear it often in manufacturing. We've always done it this way. Pricing is inherited, it's not designed in manufacturing."
Connect with Anderson: LinkedIn: Anderson Lemos (https://www.linkedin.com/in/andersondlemos/)