5 Ways Wholesale Distributors Can Optimize Profit with ERP
If you have dreams of expanding your wholesale distribution business, you need to have profits to channel into your future growth plans. As you start to grow, you take on new customers, new product lines and probably hire new team members to handle the influx in demand. But as you grow, your processes often become more complex. It’s also easy to lose sight of performance in certain areas of the business. So, the big question to ask yourself is “Are we as profitable as we could be?”.
If the answer is no – keep reading. Often the best way to increase profit in your wholesale business is to streamline the way you operate. In fact, many companies underestimate how much their current systems and processes are holding them back. An ERP system like SAP Business One allows small and mid-size distributors to reduce complexity, increase efficiency and ultimately, increase profitability.
Seize opportunities to optimize profit
If you’re ready to evaluate your business practices and identify areas of improvement, but aren’t sure where to start, this is a good jumping off point. Keep in mind that you can make some improvements in these areas without an ERP system, but your progress will be limited. Automation and simplicity are key to increasing efficiency which will drive profit in the long run. If you aren’t running an ERP system yet, now’s a good time to start your search.
1. Automate your chargeback process
You can save time and effort by automating your chargeback and rebate processes. An ERP system allows you to log all sales, payments and transactions in one place. So, you can easily see what’s owed without having to log into a different system and follow-up on payment. You get money back faster and have more disposable cash for inventory investment or growth initiatives.
2. React quickly to changing market conditions
Buy product when prices are cheaper. It sounds like a simple concept, but without the right systems in place, it can be hard to identify price fluctuations and act quickly. This is where an ERP system offers a big advantage. You’ll have much better visibility into inventory levels and can manage vendor relationships more effectively.
3. Analyze your cost-to-serve
How often do you feel like you’re investing a lot of time and money in customers that you know won’t buy? An ERP system gives you a complete view of your customers and what it costs to serve them, so you can determine who your most profitable customers are. With actionable data in hand, you can determine how best to do business with different groups of customers and generate the greatest return.
4. Improve supplier relationships
Take advantage of improved terms and discounts by building good relationships with your suppliers. A good ERP solution will help you understand who your best suppliers are and manage the relationships more effectively.
5. Integrate planning and execution
Make faster, smarter decisions by integrating inventory planning, purchasing, sales and accounting. The benefits of a connected organization are many, but it’s only possible with an ERP system. Trying to integrate the different areas of your business with disconnected systems will only add complexity and you likely won’t realize the benefits you’re seeking.
Increase profitability with an ERP system
With SAP Business One for small to mid-size wholesale distributors, you can automate and integrate your key business functions, saving you both time and money. You can easily analyze your spending, see which vendors offer you the best terms and identify your most profitable customers.