Effective rebate management can allow distributors to maximize revenue streams, avoid revenue leakage, maintain profit, reduce disputes, and maintain relationships with manufacturers. The majority of distributors (87%) surveyed by the rebate management platform Enable indicated that rebates are critical to profitability, but more than half (52%) believe they don’t receive all the rebates they earn.

Enable’s 2024 State of Volume Rebates Report for Distributors — which surveyed distributors across 13 industries including electrical, building materials and plumbing — uncovered gaps and areas of friction with how distributors are using volume rebates.

It showed that distributors need to work on improving communications, internally and externally with trading partners, as they gain visibility into the impact of rebate programs on their bottom line, Enable officials said in a Dec. 12 news release. One in four distributors reported poor communication between themselves and their manufacturers. The report found:

• 48% of distributors report that only purchasing and senior management are aware of supplier volume rebate programs.
• 33% of distributors report they only hear from manufacturers when they reach out first.

The report also found that:

• Rebates Remain Critical to Distributors: The availability of a rebate program with a supplier matters to 79% of distributors, up a few points from last year. While rebates are critical to profitability, only 43% of distributors know the rebate amount earned from each manufacturer they purchase from.
• Distributors View Rebates as a Relationship Builder: Most distributors (72%) believe manufacturers offer rebates to become a preferred vendor. However, 47% believe that a rebate program is an expectation—and 18% view a rebate program as a requirement.
• Better Tools are Needed to Track Rebate Performance: Over half (58%) of distributors track performance against supplier goals. While 28% of distributors use Excel and 19% use an ERP to track the performance of their rebates, 26% of distributors don’t know how they track performance.