TL;DR
Get home appliances delivered free with Prime
- Fast, free delivery on millions of items
- Prime Video, Amazon Music and more included
- Member-only deals all year
Industry consultant Mike Aylen’s latest “Inside the Margin” article recommends that hardware retailers build customer groups and set contractor discounts by product category rather than applying one rate across departments. He says retailers should review customer sales at least twice a year, use trial periods for new accounts and put expiration dates on SKU-level price exceptions.
Industry expert Mike Aylen is urging hardware retailers to set contractor discounts by customer group and product category, rather than applying a single discount across departments. In a Hardware Retailing article, Aylen argues that this approach can help stores pursue more business from professional customers while avoiding discounts that leave too little margin on particular products.
Aylen’s guidance starts with deciding which customer groups a store needs. For a retailer building a system from scratch, he recommends keeping the number to 10 or fewer groups, with separate plans added when individual high-volume customers warrant them. Groups might reflect trades such as plumbers and painters, or other local customer types including builders, concrete workers, property-maintenance businesses and councils. He says retailers should use their existing customer base and set clear criteria for assigning accounts.
Those criteria can include a customer’s day-to-day work and sales volume. Aylen describes a retailer that divided plumbers into large, medium and small groups and based discount rates on monthly sales. He recommends reviewing customer sales information at least twice a year, using sales-by-customer reports to adjust allocations and identify accounts with declining purchases.
For new customers, Aylen suggests a 60- or 90-day trial group instead of immediately granting the best discount. He says retailers can explain the criteria for permanent group membership and assess whether the customer’s business meets them during the trial. Once groups are set, he advises calculating discounts separately for each department, then narrowing adjustments to a class, fineline or individual stock-keeping unit (SKU) where needed.
Protecting Margin Across Product Lines
The advice addresses a tension for hardware stores serving contractors: discounts may help attract or retain business, but a uniform rate can cut deeply into margins on products that already have limited pricing room. Aylen warns that the effect differs by trade and item. In his examples, a broad 15% discount could leave little return on hot-water units bought by plumbers or result in losses on ladders sold to painters.
Category-level plans give retailers a way to set offers around the economics of the goods customers actually buy, rather than assume the same discount works across a whole store. The practical stakes are both customer growth and margin protection. Aylen also says sales patterns can help staff spot products a contractor might be buying elsewhere, creating an opportunity to discuss the account’s needs and the store’s offer. The article presents these as recommendations and examples, not measured results from a controlled comparison.
Products Worth Considering
Shark Clean & Empty Cordless Stick Vacuum with Auto-Empty System, BU3521
eufy Security E30 4K Indoor Camera, 2-Pack
Samsung 85-Inch QN70H Neo QLED 4K Smart TV (2026)
As an affiliate, we earn on qualifying purchases.
How the Pricing Examples Work
Aylen’s article is the fourth installment of Hardware Retailing’s “Inside the Margin” series, which he describes as addressing sales growth and margin protection among contractor and professional customers. He is identified as an industry expert and NHPA strategic consultant. The piece focuses on customer-group design and price plans; it does not report a new retailer policy, industry survey or software release.
As an example of how a plan can go wrong, Aylen recounts a retailer that priced all plumbing items at cost plus 28%. He says this resulted in a clamp selling for 94 cents while the retailer’s main corporate competitor charged $1.64. The example illustrates his point that a single markup formula can create prices that may be too low on individual items; the article does not identify the retailers or provide broader market data.
For setting rates, Aylen names Margin Master and Epicor Pricing Planner as tools that can model department-level selling prices, while noting that retailers can also work in Excel. He advises checking prices at finer product levels as needed and turning off rounding while calculating discounts. These are his recommendations; the article does not compare the software products or assess their performance.
““The main advantage is that you can use it to grow sales.””
— Mike Aylen, industry expert and NHPA strategic consultant
Limits of the Available Evidence
The source is an industry viewpoint, not a report of a retailer’s newly adopted policy or an independently tested pricing method. It gives no data on how much sales or margins changed after using category plans, and does not quantify the costs of setting up or maintaining them. The retailer examples are not named, and the article provides no sales figures or time periods for those cases.
It is also unclear how a store should set particular discount rates beyond examining its own costs, prices and customer activity. Aylen’s recommendation to review customer groups at least twice a year is guidance, not a stated industry standard. Results will depend on each retailer’s product mix, local competition and customer relationships.
Retailers’ Next Pricing Steps
Aylen’s proposed next steps are to define customer-group criteria, examine sales by customer, and calculate discounts by department before refining plans at the class, fineline or SKU level. Retailers can then assign accounts to the plans and revisit those allocations at least twice a year, according to his recommendation.
For new accounts, the article suggests testing eligibility through a 60- or 90-day group before granting permanent terms. For SKU-level exceptions, Aylen advises using expiration dates rather than locking in a fixed price. The source does not announce a formal implementation deadline or say when the next installment of the series will appear; Aylen says he plans to address another topic in a future article.
Key Questions
What is Aylen recommending to hardware retailers?
He recommends organizing contractor customers into defined groups and setting discounts by product category, rather than using one discount across all departments.
How many customer groups does he suggest starting with?
For a system built from scratch, Aylen recommends no more than 10 groups, with additional plans where individual high-volume customers need separate treatment.
How often should retailers review customer allocations?
Aylen recommends reviewing them at least twice a year, using sales-by-customer information to make adjustments and investigate declining purchases.
What does he suggest for new customers?
He proposes a 60- or 90-day trial group so a new customer can demonstrate that they meet the retailer’s criteria before receiving permanent group terms.
Does the article show that these plans increase profits?
No. The article offers advice and examples, but reports no measured results showing how category-based plans affect sales or margins across retailers.
Source: hardwareretailing.com
