If you’ve been around the multi-channel sales industry for a while, you may have come across the term “ERP” platform. But what does this term actually mean? And what are the benefits of using ERP software for multi-channel retailers?
What is ERP software?
ERP stands for Enterprise Reporting Planning and refers to holistic systems which cover a range of activities–from order and customer management to stock control and accounting. In essence, a system which controls every part of your operations. For online retailers, ERP platforms tend to contain order processing, some form of multi-channel management, accounting and inventory. These systems are extensive and the decision to implement such software is not taken without consideration.
When you’re a multi-channel retailer your business can have more moving parts than normal–you may need to manage stock across multiple channels, or from multiple locations, sourced from a variety of suppliers and shipping to any number of locations–it’s a highly complex issues, which is why ERP software can be invaluable.
When looking at such systems, it’s useful to remember not all ERPs are the same. Be sure to choose one which delivers significant benefit to your business. Shockingly, in 2017, 49% of business implemented a new ERP system to replace their out-of-date current systems; 20% introduced an ERP system from having no system at all, and nearly 30% replaced home-grown and accounting software packages. Implementing a new system is no small task, but if done well, the benefits below should outweigh the costs and setup time.
What benefits should you expect from implementing an ERP system?
1. Improved efficiency from having a single point of management for your entire business
An ERP platform gives you one place to manage all your business operations. This means you’ll have a single place to log into each day for your orders, customer management, and purchasing. It is estimated that in 2017, businesses lost $1.1 trillion in yearly revenue because of over or out-of-stock issues. And, when asked about their day to day business challenges, 43% of retailers stated inventory management was their number one concern.
Consolidating your inventory management decreases the time spent managing your sales and stock, so that you and your team can spend more time analysing your sales data, and ensuring you’re maximising your sales potential. This operations streamlining may not have been necessary when you first began your business, but can become essential as the business grows.
2. Increased accuracy in your product definition by providing a central repository for your product data
When selling online, how you define your product through your descriptions, imagery and technical specifications is a key way to grow and improve your product exposure. Rich descriptions will help your optimisation, whether on your own websites or on other marketplaces. By having a central repository for this data, you can unify and strengthen your product data over time.
3. Highly integrated ERP systems increase reach
To succeed in selling multi-channel, enlarging your business reach is essential. (That is, after all, the reason you are on marketplaces in the first place!). This does require an element of agility and having the correct infrastructure for expansion. When choosing your ERP system, ensure you pick one that integrates with the correct platforms for your business. This will allow you to continue streamlining your operations as you enlarge your reach.
4. Refined contact management and customer retention
When your customers make an enquiry, how do you know what their issues relates to? Can you easily find them and their order/sale details? Are you using their sale information to effectively resell to them? And with GDPR, are you accurately storing their data permissions, and giving your customers control over the data you hold on them? An ERP system with inbuilt CRM (Customer Relationship Manager) will give you this structure and enable you to better service, re-market to, and retain your customers.
5. Improved business intelligence from invaluable operational insights
Finally, an ERP platform gives you a collated view of all your business activities. Drawing from multiple channels worth of sales data, and inputs from your inventory data, an ERP system will give you valuable insights into the following: How long does it take to turnover stock? What are your slowest/fastest moving stock items? What are your most profitable channels? Which suppliers are most reliable? And what is your customers journey across our channels?
Make sure your chosen ERP system gives you the reports and data you need to make wise business decisions.
When done right, an ERP system should pay for itself
In summary, when facing the highly complex challenge of managing multi-channel sales, ERP system software can be invaluable and, when implemented correctly, will pay for itself in terms of the benefits to your business. For growing multi-channel sellers, it’s worth researching which ERP system would ensure you are choosing a system which meets both your current and future needs.
Visit KhooCommerce if you would like to know more about an ERP system and how you can integrate this with Vendor Central. KhooCommerce is time-saving e-commerce inventory and order management ERP software for multi-channel retailers, with an EDI integration to Amazon Vendor. The cloud-based KhooCommerce software enables multi-channel, B2B, B2C and Amazon Vendor retailers to streamline their order management, purchasing and accounting.