How Distributors Use Activity-Based Costing to Find Hidden Profit

Episode 45 of Wholesale & Distribution with Fexingo. Lucas and Luna break down how distributors are using activity-based costing (ABC) to uncover which customers, products, and orders actually drain margins. They walk through a real example from a mid-sized electrical distributor that discovered 60% of its small orders were unprofitable after allocating costs like picking, packing, and shipping. The hosts explain why traditional cost-plus pricing hides the truth, how ABC assigns overhead by actual activities, and how one firm shifted from losing money on 200 orders a day to repricing or bundling them into profitability. They also discuss common implementation pitfalls — like overcomplicating the model — and how to start with just a few high-volume activities. If you run a distribution business or work in operations, this episode will change how you think about your P&L. #ActivityBasedCosting #DistributorProfitability #CostAllocation #HiddenMargins #DistributionOperations #WholesaleDistribution #MidMarketDistributor #CustomerProfitability #ProductMix #OperationalEfficiency #PricingStrategy #ProfitLeakage #SupplyChainFinance #B2BStrategy #Business #FexingoBusiness #BusinessPodcast #WholesaleDistributionPodcast Keep every episode free: buymeacoffee.com/fexingo