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Margin leakage

Dasha ShakovReviewed by Dasha ShakovVP Marketing, Proton

Updated

What is margin leakage?

Margin leakage is profit a distributor loses through many small, often unnoticed gaps between the price or cost it should have had and what it got. Common causes are unnecessary price overrides, expired contract prices still in use, freight that wasn’t charged, and rebate, ship-and-debit or chargeback claims that were never filed.

Margin leakage example

A pricing review finds a contract price that should have ended in March still being applied in September, and 40 ship-and-debit claims that were never submitted.

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