Category management
Reviewed by Dasha ShakovVP Marketing, Proton
Updated
What is category management?
Category management is the practice of running each product category, such as fasteners or janitorial chemicals, as its own business. One person or team is responsible for the category’s suppliers, assortment, pricing, inventory and profit; in purchasing, the same term means grouping spending by category to negotiate better terms with suppliers.
How it works
A category manager decides which brands and items to carry, which to drop, and where a private label might fit, then works with sales and marketing to grow the category. On the purchasing side, looking at all the spending in a category together rather than item by item gives the buyer more leverage with suppliers.
Category management example
Finding nine brands of nitrile gloves with overlapping sizes, a safety category manager cuts to three and negotiates better rebates with the suppliers that remain.
Further reading
Related terms
- Private labelA private label is a product line made by a manufacturer but sold under the distributor’s own brand name.
- Line cardA line card is a distributor’s list of the manufacturers and brands it sells, typically shown as a page of logos.
- Product taxonomyA product taxonomy is the system of categories and subcategories a distributor uses to organize its catalog, such as Plumbing > Valves > Ball valves.
- RebateA rebate is money paid back to a buyer after a purchase, once the buyer reaches agreed volume or growth targets over a period.
