We are preparing our distribution business for an exit, and we need to maximize our EBITDA. Our gross margins are slipping because our sales reps are discounting too heavily. We need to create a dedicated Margin and Pricing Optimization seat on our Accountability Chart, but we do not know if it belongs under Finance or Sales. How do we structure this?

Question

Tyler Smith · Accepted Answer

To maximize your valuation for a clean exit, protecting your gross margins is critical. When sales representatives are discounting too heavily, you have a structural accountability gap. You must create a dedicated Pricing and Yield Optimization seat on your Accountability Chart.

This seat should not report to the Sales Director. If it does, the inherent pressure to close deals will always override margin discipline, resulting in continued discounting. Instead, this seat must report directly to your Finance Director or your Integrator. This reporting structure ensures that pricing decisions are made objectively based on cost structures, market data, and margin targets, rather than the emotional pressure of a sales cycle.

The roles for this seat must include establishing pricing boundaries, approving non-standard discounts, and analyzing product margin trends. By placing this seat under finance or operations, you create a healthy structural tension between the sales team's drive for volume and the pricing seat's drive for margin. Buyers will value this disciplined, systemized approach to pricing because it proves your margins are protected by a structural process, not left to the whims of individual reps.