Among the challenges of a multi-product distribution operation is accounting for the various, and sometimes complex, combination of factors affecting the accurate and timely calculation of route compensation over a given period.
Route compensation factors include:
Delivery Type |
Home delivery, bulk/single copy, recovery/redelivery, sample, bonus day, hotel/lobby, etc. |
Pay Type |
Pay by copy/per piece rate (PBC) OR pay by address/flat or scaled rate by location (PBA) |
Route Group |
Used to distinguish secondary group of routes – afternoon, specialized product or project |
Route |
Individual route that may require or have negotiated special rates or payment |
Product Rates |
Delivery rates for each day the product is published M/T/W/T/F/S/S |
Client |
The contracted client requiring service; for most distributors this starts with PCF |
The more products, delivery types, routes and contracted DSPs an operation has, the more varied compensation scenarios it will have to address. The establishment of RATE LEVELS within each operation is an efficient approach to accurately manage this complicated aspect of DSP compensation.
Rate Levels facilitate payment across different groups of routes depending on a combination of route compensation factors listed above.
This approach allows routes affected by similar factors to be addressed as a group, while accommodating the need to address specific scenarios, nuances or requirements.
The system looks at the various factors and available criteria and defaults payment to the lowest/most specific rate level available.
After Client, Delivery Type is the most common factor affecting rates.
DELIVERY TYPES | |
Z1 |
Home Delivery |
Z2 |
Bulk / Single Copy |
Z3 |
Power Day / Bonus Day |
Z5 |
NIE / School |
Z6 |
Sample |
ZC |
Hotel, Lobby Delivery |
ZW |
Carrier Collect |
ZZ |
Recovery / Redelivery |
The structure for DSP compensation can be as complex or simple as you like; the difference becomes efficiency - - managing 1000 lines of data, for instance, versus managing 100.
Before adding or changing a rate, it is recommended to first ask yourself a few questions to help clarify the best path and the correct RATE LEVEL to choose:
What are you trying to accomplish and how broad is the impact? |
This is the first step to determining the correct rate level(s) and if it is best to do individual entries or upload |
What delivery types does the new rate apply to? |
If the rate applies to multiple delivery types, an entry will have to be made for each. |
Does the new rate apply to all products or only specific products? |
This helps determine the most appropriate rate level. |
How many routes are affected by the rate change? Does the new rate apply to all or most routes? |
The more routes affected by the rate change, then the more likely a higher rate level can be used |
Are there nuances or negotiated differences for specific routes that need to be addressed? |
If yes, these will require individual entries at a lower, more specific rate level. |
Is there a similar scenario similar already in place to mimic? |
If the new set-up is similar to an existing one, then use that scenario as the starting point. |