Implementing an effective pricing strategy can be one of the best ways to achieve better gross margin. This article outlines a pricing model developed by Texas A&M University's Supply Chain Systems Laboratory and provides a look at how some distributors are using it to update their pricing strategy.

About three years ago, F.W. Webb, a regional distributor of plumbing, heating, cooling and piping products, took a part of its legacy IT system and dedicated it to improving the customer and product information available to salespeople.

About a third of our prices were being set manually by salespeople,"says Lawrence Mohr, the distributor's now-retired senior vice president of information technology. "We needed a way to provide information to inside sales so …