Free Tool · Go-to-Market & Distribution

Omnichannel Conflict Simulator

Online discounts versus dealer margins: model the friction before it costs you a partner.

Online discounts versus dealer margins: model the friction before it costs you a partner. Enter the prices and margins; see the undercut, what price-matching does to dealer economics, and a conflict index with mitigations.

For: Commercial Head·Free — no sign-up for results·Related service: Channel & Route-to-Market
Online share of your sales25%
Online undercut vs dealer20%
Dealer margin today₹105 / unit
Dealer margin if they price-match₹10 / unit
Margin erosion on match90.91%
Conflict index (0–100)45
Severe: dealers are subsidising your online growth. Expect delisting threats and coverage loss within two quarters.

Mitigations that actually work

  • Differentiate packs: online-exclusive sizes make prices incomparable.
  • Set a floor via MAP-style policy and enforce it on your own listings first.
  • Compensate dealers for online-driven footfall with display support, not price cuts.
  • Reserve deep online discounting for end-of-life SKUs.
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How it works

Undercut % = how far online selling price sits below dealer price. Dealers watch this weekly; so should you.

If dealers price-match, their margin compresses by the price gap. Margin erosion above ~30% triggers delisting behaviour in most categories.

Conflict index blends undercut depth with online share: a 5% undercut at 40% online share hurts more than 15% at 5% share.

Worked example

MRP ₹500, dealer sells at ₹475, online at ₹380 — a 20% undercut. Price-matching cuts the dealer's ₹95 margin to ₹0. With online at 25% of sales, the conflict index reads high: the brand splits packs and floors online price before the festival quarter.

Illustrative figures, not a client outcome.

Questions, answered

Can't we just stop deep online discounts?

You can, and often should — but check whether the discount is yours or platform-funded first. Platform subsidies need negotiation, not a pricing change.

What's the cleanest structural fix?

Pack differentiation: online-exclusive sizes make prices incomparable and remove the daily reference-price fight.

Version 1.0 · Reviewed 2026-10 · Methodology is fixed and version-controlled; results depend on your inputs.

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