From Spreadsheet Calculations to Automated, Accurate Customer Pricing
Fuel distribution pricing represents one of the most complex challenges in the logistics sector. Base commodity prices change multiple times daily. But customer pricing isn't simply "base rate plus margin"—it's calculated through dozens of parameters specific to each customer's circumstances, delivery requirements, and commercial arrangements.
For New Zealand fuel logistics operators managing bulk deliveries to farms, construction sites, mines, and commercial customers, pricing complexity multiplies further: delivery distances vary dramatically, load sizes range from small rural deliveries to large commercial fills, and customer contracts include volume commitments, loyalty tiers, and negotiated discounts.
The traditional approach—spreadsheets maintained by pricing analysts, manual calculations at quote and order time, inconsistent application of discounts—creates pricing errors, margin leakage, customer disputes, and significant administrative overhead. NetSuite's Configure, Price, Quote (CPQ)module offers a fundamentally better approach.
The Bulk Fuel Pricing Challenge
Consider the pricing complexity a typical NZ fueldistributor faces for bulk commercial deliveries:
Dynamic Base Rates:
- Diesel, petrol, and specialty fuel prices change daily (sometimes multiple times per day) based on commodity markets
- Different ports and terminals have different base costs
- Exchange rates impact imported fuel pricing
- Local Authority Fuel Tax (LAFT) varies by region
Customer-Specific Parameters:
- Delivery distance from terminal or depot (fuel and time costs vary significantly)
- Load size—larger deliveries command lower per-litre prices
- Loading location—some terminals have lower base costs than others
- Delivery frequency and scheduling (regular scheduled vs ad-hoc deliveries)
- Customer volume commitments (annual or monthly minimums earn better pricing)
- Contracted discounts, loyalty tiers, and negotiated rebates
- Payment terms (cash on delivery vs 30-day account affects pricing)
The manual calculation nightmare: Sales teams maintain complex spreadsheets with customer parameters, check daily rate sheets, calculate distance factors, apply volume discounts, and manually enter pricing on orders. Mistakes are common—wrong distance bands, outdated customer discounts, calculation errors—leading to margin leakage or customer disputes.
The operational impacts:
- Pricing inconsistency between sales reps quoting the same customer
- Quotes taking hours or days to prepare as analysts calculate pricing
- Margin erosion from pricing errors that undercharge customers
- Customer disputes when invoices don't match quoted prices
- Inability to analyse pricing effectiveness across the customer base
NetSuite CPQ: Built for Pricing Complexity
NetSuite's Configure, Price, Quote module is designed specifically to handle multi-parameter pricing scenarios common in fuel distribution:
Customer-Specific Pricing Rules
CPQ stores all customer-specific parameters as structured data linked to customer records:
Distance Parameters: Each customer's delivery location is associated with a distance band from relevant terminals or depots. When creating quotes or orders, CPQ automatically retrieves the correct distance factor for pricing calculations.
Volume Tiers: Customer contracts with volume commitments or tier-based discounts are configured once in CPQ. The system automatically applies the correct tier based on current volume or projected annual consumption.
Contract Terms: Negotiated discounts, loyalty program benefits, payment term adjustments, and special pricing arrangements are stored against customer records. CPQ applies them consistently across all quotes and orders for that customer.
Preferred Terminals: Customers supplied from specific terminals benefit from associated base costs. CPQ ensures pricing calculations use the correct terminal's rates.
Dynamic Base Rate Management
Rather than updating hundreds of customer prices when base rates change, CPQ works with centralised rate tables:
Daily Rate Updates: Base rates by fuel type, port, and date are maintained in custom records or standard price lists. When commodity prices change, a single update flows through to all customer pricing automatically.
Automated Rate Import: Daily rate changes can be imported via scheduled scripts or API integration from external pricing data sources, eliminating manual rate sheet updates.
Effective Dating: Rate changes take effect on specified dates automatically. Sales teams quote with confidence knowing pricing reflects current or future-dated rates as appropriate.
Real-Time Price Calculation
When sales teams create quotes or orders, CPQ executes the pricing calculation instantly:
- System identifies the customer and retrieves their pricing parameters
- Determines which base rate applies (fuel type, date, relevant terminal)
- Applies distance factor based on delivery location
- Adjusts for load size and volume tier
- Incorporates contracted discounts and terms
- Adds applicable fuel taxes
- Calculates final customer price
This happens in seconds, not hours. Sales teams quote accurately and confidently without spreadsheet calculations or pricing analyst involvement.
Margin Visibility and Protection
CPQ doesn't just calculate sell prices—it shows margins in real-time:
Cost-Plus Visibility: The system calculates landed cost (base cost plus delivery cost) and compares to sell price, displaying margin percentage on quotes and orders.
Minimum Margin Enforcement: Pricing rules can enforce minimum acceptable margins, flagging or preventing quotes that fall below profitability thresholds.
Approval Workflows: Quotes with margins below standard thresholds can route automatically to managers for approval before converting to orders, protecting against unprofitable business.
Supporting Modules: The Complete Solution
CPQ doesn't operate in isolation—it integrates with other NetSuite modules to deliver end-to-end pricing and delivery management:
Order Management
Once pricing is calculated and quotes convert to orders, NetSuite's Order Management module handles the entire fulfillment process:
Sales Order Creation: Automatically inherits accurate pricing from CPQ, eliminating re-entry or recalculation.
Delivery Documentation: Generates delivery dockets with product, quantity, pricing, and delivery location details for driver reference.
In-Truck Integration: Connects with mobile delivery solutions that capture actual delivered quantities, customer signatures, and delivery confirmations—feeding back to NetSuite for invoicing.
Inventory Management
Bulk delivery inventory flows through NetSuite's inventory module seamlessly:
Terminal to Truck Transfers: When drivers load trucks at terminals, NetSuite tracks fuel moving from terminal storage locations to truck in-transit locations.
Delivery Fulfillment: Actual delivered quantities(captured by in-truck mobile devices) relieve truck inventory and post cost of goods sold automatically.
Real-Time Stock Visibility: Operations teams see current inventory across terminals, trucks, and customer consignment locations without manual reconciliation.
Financial Management
Accurate pricing flows through to accurate invoicing and margin reporting:
Automated Invoicing: Delivery confirmation triggers invoice creation with the CPQ-calculated pricing, eliminating manual invoice preparation.
Margin Reporting: Real-time profitability analysis by customer, product, route, or delivery type—showing which business delivers healthy margins and which requires attention.
Customer Rebate Management: For customers with volume-based rebates or loyalty program benefits, NetSuite tracks cumulative volumes and calculates earned rebates automatically.
The Business Impact
Fuel distributors who implement NetSuite CPQ for bulk delivery pricing report significant improvements:
Pricing Accuracy: Elimination of calculation errors and inconsistent discount application.
Quote Speed: Sales teams generate accurate quotes in minutes instead of hours or days. Quote volume capacity increases without adding pricing analyst headcount.
Margin Protection: Real-time margin visibility prevents unprofitable quotes from becoming orders.
Sales Team Efficiency: Representatives spend time on customer relationships and business development rather than pricing calculations and spreadsheet management.
Strategic Pricing Insights: Analytics showing which customer segments, delivery types, or routes deliver best margins—enabling data-driven pricing strategy rather than gut-feel decisions.
Consistent Customer Experience: Every customer receives accurate, consistent pricing regardless of which sales representative serves them. This professionalism builds trust and reduces disputes.
Beyond Standard Pricing: Custom Solutions
For operators with highly specialised pricing requirements—perhaps unique commercial arrangements, complex intercompany pricing, or integration with external pricing optimisation tools—NetSuite's platform supports custom pricing solutions.
Project Salsa as part of Verde Group New Zealand, has developed custom bulk fuel pricing tools for MYOB Greentree environments that we can reimagine for NetSuite architecture, delivering the exact pricing logic required whilst maintaining integration with order management, inventory, and financial modules.
Why This Matters for NZ Operators
New Zealand fuel distributors face particular pricing challenges:
Geographic Dispersion: Delivery distances vary dramatically—from urban Auckland deliveries measured in tens of kilometers toremote South Island farms hundreds of kilometers from terminals. Distance-basedpricing is essential but complex to manage manually.
Diverse Customer Base: Commercial customers range from small farms with occasional deliveries to large mining operations with daily supply. Each requires different pricing approaches—volume customers expect discounts, small customers need economical pricing for viability.
Competitive Pressure: Tight margins mean pricing errors directly impact profitability. Underpricing loses money; overpricing loses customers to competitors. Accurate, consistent pricing is a competitive advantage.
Regulatory Complexity: LAFT components vary by region. Accurate tax calculation and documentation is mandatory, adding to pricing complexity.
From Spreadsheet Chaos to Pricing Confidence
NetSuite CPQ transforms bulk fuel pricing from an error-prone manual process into an automated, accurate, and strategically valuable capability. Sales teams quote faster and more accurately. Margins improve through better price discipline. Customers receive consistent, professional pricing. And management gains strategic insight into pricing effectiveness across the entire customer base.
For NZ fuel distribution operators managing complex parameter-based pricing for bulk commercial deliveries, CPQ delivers rapid return on investment through margin protection, operational efficiency, and sales effectiveness improvement.
Ready to eliminate pricing spreadsheets and protect margins? Contact us to discuss how we'd configure CPQ for your pricing requirements.
Disclaimer
The information and recommendations provided in this article represent Project Salsa's view based on our experience implementing NetSuite. Implementation approaches, pricing configurations, and CPQ solutions may vary significantly depending on individual business requirements, existing pricing structures, commercial arrangements, and specific customer needs at the time of implementation.
Oracle NetSuite Product Direction Statement:The preceding is intended to outline the Oracle NetSuite general product direction. It is intended for information purposes only and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, timing, and pricing of any features or functionality described for Oracle's products may change and remains at the sole discretion of Oracle Corporation.
Project Salsa recommends conducting a thorough requirements analysis and pricing model assessment before making any technology investment decisions.
