Want to protect your margins in the face of tariffs and rising costs? Paul Sansom, Business Consultant at Vendavo, breaks down how Price-Volume-Mix (PVM) analysis helps businesses quickly identify profitability shifts, analyze revenue changes, understand cost drivers, and make smarter pricing decisions.
Economic policy shifts are inevitable over the next four years. President Trump’s tariff policies will create ripple effects across the manufacturing and distribution industries, putting margins under immediate pressure. For companies that rely on imported raw materials and finished goods, this is a wake-up call to reassess pricing strategies and operational resilience. If you’re just getting started on developing a tariff-response strategy, we’ve created a helpful checklist and tips here. Otherwise, read on to learn about how you can use price-volume-mix as a baseline.
Conducting regular margin and revenue impact analysis will provide your team with a systematic review of product and customer profitability as market, cost, and price conditions change. PVM analysis, brought through Vendavo’s Margin Bridge Analyzer, gives businesses a clear view of profitability drivers and early warnings of margin erosion due to tariffs. With these insights, companies can quickly adjust pricing and strategy in response to shifting market conditions.
Learn more about Margin Bridge Analyzer
Why PVM Analysis Matters
Understanding the key components affecting profitability is essential, especially when faced with tariffs and other cost pressures. A PVM analysis helps businesses break down the impact of:
- Input scarcity – Supply chain disruptions can drive up material costs or limit availability.
- Lower demand – Tariffs can affect customer purchasing behavior, leading to volume declines.
- Higher supply costs – Shipping, logistics, and raw material costs often increase with tariffs.
- Pricing decisions – Strategic price adjustments can help offset these changes.
Having a complete, single view of profitability drivers makes it easier to act before issues spiral.
How Margin Bridge Analyzer Helps
Margin Bridge Analyzer utilizes a bottom-up approach to PVM analysis by tracking line items and customer transactions over time. It captures key data points — quantities, prices, costs, and more — so you can see exactly what’s impacting your margins and revenue.
Best of all, the platform provides clicks-not-code configuration, making it simple for finance, pricing, and sales teams to generate their own models and analyze shifting market conditions in real time.
Learn how Fluidra uses Margin Bridge Analyzer for lasting success
Insights-to-Action
With a powerful PVM analysis, businesses can go beyond just identifying revenue and margin shifts — they can take action based on clear, data-driven insights. Here’s how Margin Bridge Analyzer helps businesses navigate tariffs:
- Understand the impact of price changes
In industries like distribution, where revenue is often tied to supplier list prices, PVM analysis reveals exactly what’s driving revenue and margin fluctuations. This transparency helps businesses make informed pricing decisions, ensuring they respond effectively to external pressures like tariffs.
- Break down ‘total costs’ for clarity
Cost increases — whether from materials, freight, or operational expenses — can be complex. Margin Bridge Analyzer breaks down these cost drivers into clear categories, helping businesses understand how each component impacts purchasing behavior and profitability.
- Analyze volume and product/customer mix
When volume changes, it affects the overall mix of products, customers, and channels. A detailed PVM model separates volume-driven revenue changes from mix effects, giving a precise view of how shifting sales impact overall margins.
- Identify declining customers
By matching transactions from one period to the next, businesses can pinpoint revenue and margin loss tied to lost, new, or non-repeat customers. This makes it easier to target retention strategies and focus on maintaining profitable relationships.
A quick tip: Learn from the pandemic. During the pandemic, many building supply companies successfully increased prices above the rate of general inflation. Studying these trends helps businesses build smarter pricing strategies.
Learn how Volvo Trucks uses Margin Bridge Analyzer to drive success
Real-World Analytics Use Cases
The right analytics tool highlights problems and provides usable solutions. Below are three key ways companies are using Margin Bridge Analyzer to drive real value:
- Finance teams gain deeper profitability insights – Easily see revenue and margin trends across different cost drivers.
- Sales and pricing teams make better decisions – Understand customer behavior shifts and price accordingly.
- Executives measure pricing strategy effectiveness – Track pricing decisions’ impact and make adjustments in real time.
Drive Value with Margin Bridge Analyzer
A strong PVM analysis framework empowers organizations to stay ahead of market fluctuations, rather than reacting to them. With Margin Bridge Analyzer, you can:
- Quickly analyze, simulate, and explain revenue and margin shifts
- Measure the real impact of pricing strategies and cost changes
- Provide finance, accounting, and leadership teams with clear insights
How Vendavo Can Help
At Vendavo, we help businesses build smarter pricing and profitability strategies with data-driven insights. Whether you’re navigating tariffs, supply chain disruptions, or fluctuating costs, Margin Bridge Analyzer equips your team with the tools they need to adapt quickly and protect margins.
Want to see how it works? Let’s talk about how PVM analysis can help you optimize profitability in uncertain times.