Gross Margin Management

special pricing request

Automate and Streamline Your Special Pricing Authorization Process

A special pricing request or special pricing authorization (SPA) is a promotional rebate program employed by product or component manufacturers (OEMs) to support their stocking distributors and mitigate the risks of carrying their inventory. Similar to a ship-and-debit, a special pricing request is a rebate in the sense that it represents an off-invoice discount which reduces the actual cost to the distributor. Special pricing requests are often used in the technology hardware and electrical industries in response to specific market conditions or opportunities via requests by their distribution channel partners.

Special pricing is generally synonymous with ship-and-debit. Semiconductor companies typically use the term ship-and-debit while product companies tend to use the term SPA. In most cases, the terms are interchangeable. However, some companies do make a slight distinction between the two terms. A SPA is a pricing agreement requested by the distributor or channel partner and approved by the OEM to facilitate the movement of product through the channel partner at a reduced cost. While ship-and-debits are almost always tied to a specific customer, a SPA may not attached to a specific end-customer, but tied to a time frame, market segment, or some other criterion.

The basic process for special pricing requests and other channel incentive programs is very similar:

  1. The channel partner requests a cost reduction on their inventory for a specific volume of specific product. This is normally done to respond to customer demands and/or competition.
  2. The request is either approved or declined by the manufacturer.

The Entomo Pricing Compliance module supports Distributor Price Adjustments (DPA), Special Pricing Authorizations (SPA) and other price incentive programs. All necessary workflows to request, review, approve and submit authorized claims are available out-of-the-box.

streamline and manage special pricing requests

  • Automated process for request-approve-claim-validate-authorize-payment cycle
  • Complete support for special pricing and other incentive programs (ship-and-debit, etc.)
  • Claims auto-validated against cleansed and enriched POS reports and approvals
  • Review, adjust and authorize special pricing claims
  • Eliminate overpayments

Special Pricing Request Basics

Special pricing requests occur only when distributors or other channel partners already have the product in stock and may have paid for the inventory. Once a sale is made to the end customer, the channel partner submits a special pricing claim to the OEM to recoup the difference between the original cost and the newly-approved lower cost.


Entomo supports any type of special pricing request or authorization and ensures full compliance for revenue tracking, inventory valuation and sales compensation. Once SPAs are created within SmartHub, claims are then validated automatically, as soon as the POS data is processed. This means that there is no need for the channel partner to make an explicit claim for the discount.

Entomo's Pricing Compliance module will also automatically calculate the correct claimed amount and generate a credit memo to be passed to the OEM’s ERP system. This dramatically reduces errors and overhead, and shortens the remittance time to the channel partner.

When coupled with our Partner Portal or used in conjunction with Entomo's Salesforce integration, channel partners and the OEM channel team will be able to fully engage with pricing compliance processes and drive additional channel sales in real-time.

Full Special Pricing Request Management

Entomo’s integrated channel management solution automates and streamlines the entire “request-approve-claim-validate-authorize-payment” cycle, making the process easier to manage and eliminating the risk of overpaying and double-dipping by channel partners. The solution helps design and fine-tune strategies for future channel incentive programs by tracking utilization metrics and ROI of historical programs.

  1. Ship-and-debit request and approval
    The process starts with the partner requesting a ship-and-debit rebate allowance using Entomo’s SmartHub® partner collaboration portal. The request is then auto-routed to specific individuals at the manufacturer for approval. Requests are evaluated and approved or not. Importantly, ship-and-debit requests can be evaluated and approved based on price history, registered opportunities, and design wins in order to preserve margins and eliminate price erosion.
  2. Claim submission and validation
    Ship-and-debit credits can be calculated with or without explicit claims being submitted by the channel partner. The 3 types of claims enabled and supported include:
    • Explicit Claim - formal claims submitted by the channel partner on a separate data feed or form. They can be submitted by email, EDI or uploaded via the partner collaboration portal.
    • Implicit Claim - these are claims submitted via the POS feed on a transaction-by-transaction basis, typically in the form of the Ship and Debit number.
    • Automatic Claim - these are claims calculated by Entomo's SmartHub as inventory and POS data are collected from channel partners. In this method, SmartHub uses the approved Ship and Debit number and compares it to the required fields of the POS report. If the fields match, SmartHub will automatically accrue the appropriate credit. This method is rapidly becoming the ‘best practice’ since it eliminates errors, is completely auditable, and provides the quickest way to reimburse the channel partner with little or no overhead.
    • All ship-and-debit claims are auto-validated against the cleansed and enriched POS reports and the original ship-and-debit approval. This could include part number, quantity, end customer, validity dates, resale price or other mandated fields.
  3. Review adjustments and payment authorization
    For all claim methods, once the automated validation is completed, program administrators can review and adjust claims and authorize payments. Manual adjustments are tracked with an automated audit trail. Payment authorizations are automatically transmitted to the appropriate financial system for payment.

Measuring Special Pricing Request Effectiveness

SmartHub not only enables accurate and timely special pricing claims payments, but also allows incentive data and statistics to be used to objectively measure program and partner performance. You get a comprehensive view of all channel incentive programs and their performance, including ROI and usage metrics, program accruals and exposure. These metrics can also be integrated into the Channel Analytics and Dashboards and/or the SmartHub Business Discovery and Intelligence Module.

Entomo’s Customer Success team is always available to help OEMs manage special pricing requests and other channel programs, establish “best practices” and aid in completing the cycle of validation and payment.

Channel Incentive Program Process

Special pricing requests generally follow the same basic process as other channel incentive programs:

  1. Request: A channel partner requests a special dispensation to sell a specific volume of specific product(s) at a reduced price.
  2. Approve: The request is either approved or declined by the manufacturer.
  3. Claim: Partner submits a claim to the manufacturer to recoup the difference between the original price and the newly approved lower price.
  4. Validate: The vendor or manufacturer must confirm the claim is valid.
  5. Authorize: Valid claims now need to be authorized for payment.
  6. Payment: Reimbursement/payment of the claim amount to the channel partner.
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