The price nobody had touched in three years

The invoice went out on a Thursday afternoon. Eighty-four drums of heavy-duty degreaser for the kitchen of a coastal hotel, two pallets of paper and a few boxes of industrial bin bags. A good order. Marisa closed it the way she'd been closing orders for fifteen years: checking that everything was there and that the client was one of the ones who pay. She didn't touch the price. The price came off the list, and the list was the list.

Marisa runs a professional cleaning-supplies distributor in Valladolid. Fourteen people, a warehouse, three vans and around fifteen hundred product lines: detergents, paper, gloves, cloths, bleach, everything a hotel, a care home or a bar needs to keep itself clean. She sells a lot and she sells well. What she didn't know is that some of those drums she was giving away.

That degreaser cost her, bought from the manufacturer, four euros ten a drum. She sold it at three euros ninety. Twenty cents of loss per drum, eighty-four drums, and shipping on top. And it wasn't a one-off mistake. It was the price on the list. It had been running like that, in the red, for nearly two years.

What the company couldn't see

Marisa had set the selling price of that detergent back in 2022, when the drum cost her three euros twenty. At three ninety she made seventy cents — not much, but she made it. Reasonable enough.

What happened next nobody decided: it happened on its own. The manufacturer pushed the drum to three fifty, then three eighty, then four ten. They raised it little by little, in letters that said "tariff update" and got filed away without a second thought. Each rise was small. None set off any alarm. And while the cost climbed step by step, the selling price stayed frozen where Marisa had put it three years earlier, because nobody ever went back to look at the price list. It was in a PDF. It got printed. It got sent to the reps. And there it stayed, fixed, like an old photo of a business that no longer existed.

Marisa didn't have a sales problem. She was selling more than ever. She had a quieter, more dangerous one: she didn't know how much she made on each thing she sold. She knew what she billed, which is a different thing. Revenue kept rising and the bank balance didn't quite keep up, and she blamed the overheads, the insurance, the diesel. Never the fact that there were lines she was selling at a loss, thanking herself for the volume.

What she asked for and what she needed

Marisa called me because "the numbers didn't add up" and she wanted, she said, two things. One, to put five per cent on the whole catalogue, "to be on the safe side". Two, to swap the invoicing software for a more modern one.

The five per cent across the board was the classic patch that half fixes and half breaks at the same time. The thousand lines that already had a good margin didn't need that five per cent, and it made them look expensive against the competition. And the ones she was selling below cost, five per cent didn't save: she still lost, just a little less. Raising prices blind isn't pricing. It's shutting your eyes tighter.

And the new invoicing software wasn't going to tell her anything the old one didn't. The problem wasn't what she billed with. The problem was that nobody, anywhere, was putting side by side two numbers that hadn't looked each other in the eye for three years: what each thing cost her today and what she sold it for today.

—So where do I start?
—By seeing. Before touching a single price, see which ones make money, which break even and which lose. So you stop pricing in the dark.

How it works, no smoke

What we built has nothing magic about it, and that's worth saying. We took two things the company already had and that lived apart. On one side, the real purchase prices, the actual ones, off the latest invoice from each supplier. On the other, the selling prices from the list. We made them talk.

The result is a simple panel, one screen. Each product on a row. Beside it, what it costs today, what it sells for today, and what's made or lost on each, in euros and in per cent. And a colour: green if it makes good money, amber if it's tight, red if it's selling below cost. Nothing more. What anyone would see in a second if someone had sat down to put it together. The trouble is that "someone" would have to go through fifteen hundred lines every time a supplier changes a tariff, and that, by hand, nobody does. Which is why it wasn't being done.

The panel updates itself. When a supplier invoice comes in with a new cost, the row changes colour on its own. If a drum turns red because the manufacturer has put its price up, Marisa sees it that week, not two years later. It doesn't decide the price for her: that's hers, it depends on the client, the volume, the competition. It puts reality in front of her so she decides with it and not against it.

And the honest thing is to say what it doesn't do. It doesn't guess the ideal price, because there isn't one. It raises nothing on its own. It doesn't know that you carry a thin margin for that hotel because it buys ten other things off you at a fat one. Marisa knows that. The panel only sees to it that Marisa knows it knowing the numbers, and not from memory.

What changed

The first day the panel lit up, sixty-one lines came out red. Sixty-one things the company was selling at a loss. Some by a few cents; a couple, by more than a euro a unit. Marisa sat looking at them for a while in silence.

She didn't raise all sixty-one. She went through them one by one. Some she put up, because they were standalone products with no price fight. Others she left red on purpose, because they were the hook she got into clients with, clients who then bought the rest dear. And a few she simply stopped selling. For the first time in three years that was a decision, and not an oversight.

The company's average margin rose three points in a quarter. Without selling more, without losing a single important client, without the blind five per cent she'd been about to apply. Just by stopping giving away what she'd been giving away for two years without knowing it, and charging for the rest as before.

But what changed her most wasn't the margin. It was that closing a big order stopped giving her that background unease, the doubt over whether it was good or only looked good. Now she closes the order and, if she wants, looks at the panel, and knows what she's making. Closing an order became a whole, undivided pleasure again.

A price you don't touch moves on its own

There's something Marisa told me two months in, half laughing, that sums up well what had happened.

—We spent three years giving away drums of detergent and thanking ourselves for the volume.

Small companies keep a close watch on what comes in: the sales, the new clients, the revenue, numbers that show and rise and feel good. And they neglect the other number, the margin, which doesn't show, which doesn't rise on its own and which moves against you while nobody looks. A price you don't touch seems still, but it isn't: every time a supplier raises its tariff, that price you haven't changed is worth a little less to you.

That, which looks like an oversight, is almost always a lack of light. Nobody gives money away on purpose. They give it away because they can't see it. And seeing it, today, can be put in: not so a machine decides your prices, but so you decide them looking at the real numbers, this week's, and not the ones from three years ago.