Wholesalers and distributors are crucial part of the distribution channel, forming a link between the manufacturers and the retailers. Although this group is very important for the overall supply chain, it usually does not get enough attention from the software vendors.

Today, there are thousands of software solutions that meet the needs of the manufacturers and the retailers, and only few solutions that cater the needs of the wholesale and distribution industry.

The business of Wholesalers and Distributors

Wholesalers and distributors sit between manufacturers and retailers in the supply chain. In a simple model, a wholesaler fills orders from retailers from an inventory that is purchased in bulk from other suppliers.

Distributors act as an intermediary between the manufacturers and the retailers and provide additional services such as adding value to the product, taking an active role in the sale and promotion of the product, and processing returns.

In reality the line between the wholesalers and distributors are not always so clear, and many times wholesalers will provide distribution services and vice versa. Therefore, many companies label themselves as “wholesale distributors”.


4 key components of every ERP for Wholesalers and Distributors

The ERP for manufacturing or retail usually does not cover the needs of the wholesalers and distributors. They require deep functionality in some areas that are not present in the manufacturing and retail business. This are the four main business areas that every ERP for wholesalers and distributors should provide:

  1. Distribution process management
  2. Supply chain management
  3. Retail and e-commerce
  4. Back-office operations

The ERP for wholesalers and distributors should also provide: business platform capabilities, location-specific functionalities, as well as different software delivery modules.

#1 Distribution Process Management

The distribution process management is divided into six main areas:

1. Distribution requirement planning (DRP) is the planning engine, similar to the manufacturing requirement planning (MRP) but built to handle the specific needs of wholesalers and distributors.

2. Sales Management automates the entry of customer orders and tracks their status. It also includes the management of complex pricing agreements, inventory allocation procedures and support for returned goods processing.

3. Purchasing management (procurement management) manages the purchasing of the raw materials, semi-finished and finished goods, and tracks suppliers’ compliance to contract terms.

4. Quality Management refers to a set of actions taken by the organization in order to ensure that it creates and delivers high-quality products. Organizations must comply with national and international rules and regulations, but some of them create and use internal requirements for quality control.

5. Customer Relationship Management (CRM) covers a wide range of functionalities including: campaign and leads management, sales force automation, customer service and support, etc.