Wholesale & Distribution ERP | Best ERP for Distributors 2025

The Distributor's Guide to ERP Software in 2025

Distribution is a margin game. Most wholesale distributors operate on net margins of 1-3%, which means the difference between a profitable year and a loss can come down to inventory turns, warehouse labor efficiency, and order accuracy.

Your ERP system is not just back-office software. It is the operational nervous system that determines whether you ship the right product to the right customer at the right time -- and whether you make money doing it.

This guide exists because most ERP comparison pages treat distribution as a generic category, listing the same vendors with the same vague descriptions. Distribution is not generic.

A plumbing supply distributor with 15 warehouses and 50,000 SKUs has fundamentally different requirements than a food distributor managing cold chain logistics and expiration dates, or an industrial distributor handling complex pricing contracts and same-day delivery expectations.

We will be specific about which systems work best for which distribution models, and honest about where each falls short.

Why Distributors Are Replacing Their ERP Systems Now

The wholesale distribution industry is undergoing a structural transformation. Amazon Business, customer expectations for real-time visibility, supplier disintermediation, and the permanent acceleration of ecommerce adoption have all raised the bar for what distribution operations must deliver.

Here are the specific pain points driving ERP modernization.

Warehouse Operations Are the Biggest Cost Leak

For most distributors, warehouse labor is the single largest controllable expense. When your ERP lacks integrated warehouse management, you end up with manual picking processes, inefficient putaway logic, poor slotting, and excessive travel time in the warehouse.

The difference between a well-optimized WMS-driven warehouse and a paper-based operation can be 25-40% in labor productivity. For a distributor spending $3M annually on warehouse labor, that is $750K-$1.2M in potential savings.

Stockouts and Overstock Coexist in the Same Warehouse

This is the classic distribution paradox. You are simultaneously losing sales to stockouts on fast-moving items while carrying months of dead inventory on slow movers.

The root cause is almost always poor demand visibility. When your forecasting relies on buyer intuition and historical averages rather than statistical models that account for seasonality, trends, promotions, and customer-specific demand patterns, inventory investment is misallocated.

Order Processing Is Still Heavily Manual

Many distributors still process a significant portion of their orders through manual entry: phone orders keyed in by customer service reps, faxed POs re-entered into the system, emailed orders copied into the ERP.

Each manual touchpoint introduces errors and delays. Modern distribution ERP should support EDI, customer portals for self-service ordering, ecommerce integration, and automated order capture from multiple channels -- all flowing into a single order management workflow.

Demand Visibility Is Reactive Instead of Predictive

Most distributors know what sold last month. Very few can accurately predict what will sell next month.

Without statistical demand forecasting, inventory buyers are making purchasing decisions based on gut feeling, periodic reviews of stock levels, and vendor minimum order quantities. This leads to the chronic cycle of over-ordering (tying up cash) and under-ordering (losing sales), both of which are devastating at 1-3% margins.

EDI and Supplier Integration Is Fragile

Electronic Data Interchange remains the backbone of distributor-supplier communication, and for many distributors, it is held together with duct tape.

Legacy EDI mapping, manual exception handling, and poor integration between EDI transactions and ERP inventory/purchasing modules create a constant stream of errors: wrong quantities received, mismatched pricing, late ASN notifications.

Modern distribution ERP should handle EDI natively or through tightly integrated partners, with automated exception management rather than human intervention.

Multi-Warehouse Complexity Is Overwhelming

Distributors with multiple warehouses face exponential complexity in inventory allocation, transfer optimization, and fulfillment routing.

Which warehouse should fulfill a given order? When should inventory be transferred between locations? How do you prevent split shipments while minimizing freight costs?

Without intelligent multi-warehouse logic in your ERP, these decisions are made ad hoc, resulting in suboptimal shipping costs and inconsistent service levels.

Best Distribution ERP Software for SMBs ($10M-$250M Revenue)

The mid-market distribution ERP landscape has matured considerably. Cloud-native platforms have made enterprise-grade distribution functionality accessible to smaller distributors, and several vendors have invested in distribution-specific modules rather than repurposing manufacturing or generic ERP for distribution use cases.

Oracle NetSuite

Best for: Growth-stage distributors who need a unified cloud platform spanning ERP, CRM, ecommerce, and warehouse management without managing multiple systems and integrations.

NetSuite is the most widely adopted cloud ERP among mid-market distributors, and the reason is straightforward: it provides a genuinely unified platform where inventory, orders, financials, CRM, and ecommerce all share a single database.

For distributors managing complexity across multiple sales channels (inside sales, field reps, ecommerce, EDI), this single-system approach eliminates the integration tax that plagues multi-system architectures.

The inventory management and demand planning modules handle multi-location inventory, lot tracking, serial numbers, and bin management. The Advanced Revenue Management module handles complex pricing scenarios. SuiteCommerce provides native B2B ecommerce.

The platform scales well from startup distributors through to $500M+ operations, with many customers growing on the platform for 10+ years without re-platforming.

Watch out for: NetSuite's warehouse management module (WMS) is adequate for basic operations but does not match the depth of dedicated WMS solutions for high-volume, complex warehouse operations. If you run a warehouse with 100+ pickers and need voice-directed picking, wave planning, and real-time labor management, you will likely need a standalone WMS integrated with NetSuite. Pricing can also escalate significantly as you add modules, and the implementation partner ecosystem varies widely in quality.

Acumatica Distribution Edition

Best for: Mid-market distributors who want modern cloud ERP with purpose-built distribution modules, unlimited user licensing, and strong integration capabilities.

Acumatica has built one of the most compelling distribution ERP offerings in the mid-market. The Distribution Edition includes sales order management, purchase order management, inventory management (with advanced replenishment), warehouse management, and requisition management as native modules.

The warehouse management module is more capable than most ERP-native WMS offerings, supporting barcode scanning, directed picking, and wave/batch processing.

The unlimited-user licensing model is a significant differentiator for distributors. In a typical distribution operation, warehouse workers, delivery drivers, customer service reps, buyers, and management all need ERP access. On a per-user licensing model, this can be prohibitively expensive. Acumatica charges based on resource consumption and transaction volume rather than user count, making it economical to give access to every employee who needs it.

Watch out for: Acumatica is still a relatively young platform compared to established distribution ERPs. The partner ecosystem, while growing rapidly, is smaller, which can limit your implementation options in some regions. Advanced distribution-specific features like sophisticated EDI management, complex pricing matrices with dozens of pricing tiers, and deep integration with transportation management systems may require add-on solutions from Acumatica's marketplace.

SAP Business One

Best for: Distributors with international operations or complex pricing requirements who need strong multi-currency, multi-language support with a proven global ecosystem of partners.

SAP Business One serves a large base of wholesale distributors worldwide, with particular strength in international operations. The inventory management module supports multi-warehouse, multi-bin management, serial and batch tracking, and automated reorder points.

The pricing engine handles complex scenarios including volume discounts, customer-specific pricing, contract pricing, and promotional pricing. CRM integration is native, giving sales teams and customer service visibility into order history, open orders, and credit status.

The partner add-on ecosystem for distribution is extensive. Boyum IT's Produmex provides advanced warehouse management with directed picking and packing. Various partners offer EDI integration, route accounting, and mobile delivery solutions. This extensibility allows B1 to serve distribution sub-verticals (food distribution, electrical distribution, plumbing supply, industrial distribution) with specialized functionality.

Watch out for: SAP Business One was not designed as a distribution-first ERP. The core inventory and warehouse capabilities, while solid, are not as deep as purpose-built distribution systems like Epicor Prophet 21 or Infor Distribution SX.e. Scaling beyond 100-150 concurrent users can strain performance, particularly with HANA database in cloud-hosted scenarios. The user interface also requires training, as it is not as intuitive as newer platforms.

Epicor Prophet 21

Best for: Traditional wholesale distributors who need a system built specifically for distribution, with deep pricing, inventory, and counter sales functionality refined over four decades.

Epicor Prophet 21 (P21) is distribution through and through. Built by distributors for distributors, it handles the complexity of wholesale distribution in ways that general-purpose ERPs simply cannot match out of the box.

The pricing engine is among the most sophisticated in the mid-market, supporting matrix pricing, cost-plus pricing, contract pricing, customer-specific pricing, and real-time margin visibility at the order line level. Counter sales, will-call processing, and proof-of-delivery workflows are native capabilities that reflect P21's origins in the physical distribution world.

Inventory management in P21 is deeply integrated with purchasing, with features like suggested purchasing, vendor analysis, and sophisticated min/max/reorder point algorithms tuned for distribution economics. The system understands distribution-specific concepts like stocking versus non-stocking items, drop-ship management, and vendor rebate tracking in ways that generalist ERPs often handle clumsily.

Watch out for: Prophet 21's legacy architecture is showing its age. While Epicor has invested in modernizing the user experience and moving toward cloud deployment, the platform's foundations date back decades, and some areas of the system feel dated. Integration with modern ecommerce platforms, CRM systems, and third-party WMS can require significant middleware effort. The path to cloud is also still evolving; many P21 installations remain on-premise.

Infor Distribution SX.e

Best for: Distributors who want a system built from distribution DNA, with strong multi-warehouse management, customer-centric order management, and an established user community.

Infor Distribution SX.e (formerly SX.enterprise) was built specifically for wholesale distribution and carries decades of distribution-specific functionality.

The system excels at multi-company, multi-warehouse distribution with features like intelligent order routing, cross-dock management, and inter-warehouse transfer optimization. Customer management goes beyond basic CRM, with ship-to management, complex pricing agreements, and customer-specific catalogs.

Running on Infor OS and AWS, SX.e has been modernized with Infor's Ming.le social business platform, Birst analytics, and Coleman AI. The analytics capabilities are particularly relevant for distributors, providing margin analysis, inventory optimization recommendations, and customer profitability insights.

The system handles EDI natively, which eliminates the need for third-party EDI translation in many scenarios.

Watch out for: Infor Distribution SX.e has a smaller market presence than some competitors, and finding experienced implementation partners can be challenging outside of the system's core user regions. The platform is in the process of transitioning to Infor's CloudSuite Distribution, and customers need to understand the migration path and timeline. Customization can be complex, and Infor's support model has received mixed reviews from some customers.

SYSPRO

Best for: Inventory-centric mid-market distributors who also do light manufacturing (kitting, assembly, value-added services) and need a single system for both.

SYSPRO serves a significant base of wholesale distributors, particularly those who combine distribution with value-added services like kitting, light assembly, labeling, or custom packaging. The system handles both distribution and manufacturing in a single platform, which is valuable for distributors that blur the line between pure distribution and light manufacturing.

Inventory management is a core strength, with multi-warehouse support, lot and serial tracking, automated replenishment, and landed cost calculation. The purchasing module supports blanket orders, supplier performance tracking, and multi-currency procurement.

The system scales well for mid-market distributors with 20-200 users.

Watch out for: SYSPRO's distribution modules are not as deep as purpose-built distribution ERPs like Prophet 21 or SX.e. The warehouse management capabilities are basic compared to dedicated WMS solutions. If you are a pure-play distributor with complex warehouse operations, you may find SYSPRO's distribution features insufficient without add-ons. The platform's global footprint is also more limited, which matters for distributors with international operations.

Best Distribution ERP for Enterprise ($250M+ Revenue)

Large-scale distribution operations require ERP systems that can handle thousands of concurrent users, millions of SKUs, complex multi-entity structures, and sophisticated supply chain optimization across dozens of warehouses and hundreds of suppliers.

SAP S/4HANA

Best for: Global, multi-entity distributors with complex supply chains, high transaction volumes, and the need for real-time inventory visibility across dozens of warehouses worldwide.

SAP S/4HANA brings enterprise-grade distribution capabilities that no other platform can fully match at scale.

The Extended Warehouse Management (EWM) module is a full-featured WMS that can replace standalone warehouse management systems, with support for complex picking strategies, labor management, yard management, and cross-docking. The in-memory HANA database enables real-time available-to-promise (ATP) calculations across the entire distribution network, which is critical for large distributors making fulfillment decisions across multiple warehouses in real time.

The Advanced Planning and Optimization (APO) capabilities, now embedded in S/4HANA as IBP (Integrated Business Planning), provide demand sensing, inventory optimization, and supply network planning that leverage machine learning to improve forecast accuracy.

For distributors managing complex vendor rebate programs, trade promotions, and customer agreements, SAP's settlement management capabilities are comprehensive.

Watch out for: The total cost of ownership for SAP S/4HANA is the highest in the market. Implementation timelines for large distributors typically run 18-30 months. The system's complexity means that without experienced implementation partners and strong internal IT leadership, projects can go significantly over budget. The business case must justify the premium over mid-market alternatives, which is generally only achievable for distributors with over $500M in revenue or those with genuinely complex global operations.

Microsoft Dynamics 365 Supply Chain Management

Best for: Large distributors in the Microsoft ecosystem who want AI-driven demand sensing, strong warehouse management, and tight integration with Power Platform for analytics and automation.

Dynamics 365 Supply Chain Management has matured into a genuine enterprise distribution platform. The warehouse management module supports advanced picking strategies, wave processing, containerization, and integration with material handling equipment.

The Demand Forecasting service uses Azure Machine Learning to provide statistical demand forecasts that incorporate external data signals like weather, economic indicators, and market trends.

The integration with Power BI, Power Automate, and Power Apps creates a platform where distributors can build custom analytics, automate workflows, and create mobile applications without custom development. The Copilot AI assistant provides natural-language access to inventory, order, and supply chain data.

For distributors already using Microsoft 365 and Teams, the integration story is seamless.

Watch out for: Dynamics 365 SCM's distribution capabilities, while strong, are not as specialized for pure distribution as SAP's EWM or some distribution-specific ERPs. Complex pricing scenarios with hundreds of pricing tiers, customer-specific catalogs, and real-time margin calculation at the line level may require additional customization. The partner ecosystem for distribution-specific implementations is growing but still developing compared to SAP's.

Oracle ERP Cloud

Best for: Large, complex multi-entity distributors with sophisticated financial consolidation requirements and global operations requiring multi-jurisdiction compliance.

Oracle ERP Cloud provides enterprise distribution capabilities with particular strength in financial management and global compliance.

The inventory management and order management modules handle complex multi-organization structures, intercompany transactions, and transfer pricing. The Warehouse Management Cloud module supports advanced fulfillment operations with task-based execution and mobile-enabled workflows.

Oracle's strength for large distributors lies in its financial backbone. Complex multi-entity consolidation, intercompany elimination, multi-GAAP reporting, and tax compliance across dozens of jurisdictions are mature capabilities that large global distributors require.

The Supply Chain Planning Cloud modules provide demand management, supply planning, and inventory optimization using machine learning algorithms.

Watch out for: Oracle ERP Cloud implementations for distribution tend to be expensive and complex. The user experience, while improved in recent releases, still requires significant training for operational users. Oracle's distribution-specific functionality is not as deep as some specialized platforms, particularly in areas like advanced pricing management, vendor rebate tracking, and distribution-specific analytics. The consulting ecosystem is dominated by large systems integrators, which can make the platform less accessible for mid-enterprise distributors.

Infor M3

Best for: Large, multinational distributors in food, beverage, and chemicals distribution who need industry-specific logistics, lot management, and regulatory compliance.

Infor M3 serves a significant base of enterprise distributors, particularly in industries requiring specialized logistics.

For food and beverage distributors, M3 provides catch-weight management, shelf-life tracking, lot traceability, and cold chain visibility. For chemical distributors, hazardous materials handling, regulatory compliance, and container management are native capabilities.

The multi-company, multi-country architecture supports complex distribution networks with centralized or decentralized operating models. The integration with Infor Nexus supply chain network provides end-to-end supply chain visibility beyond the enterprise boundary, including supplier collaboration, logistics tracking, and trade compliance.

Watch out for: Infor M3 has a steeper learning curve than some competitors, and experienced M3 consultants for distribution can be difficult to find. The platform's complexity means that implementations tend to be longer and more expensive than anticipated. If you are a general merchandise distributor without industry-specific requirements for food, chemicals, or fashion, M3's specialized capabilities may not justify its complexity premium.

Essential Distribution ERP Capabilities

The capabilities that matter most for distributors differ significantly from manufacturing or service companies. Here is what to evaluate and why each capability has a direct impact on your margins.

Warehouse Management (WMS)

The most impactful capability for distribution operations. Evaluate directed picking (system-optimized pick paths), wave/batch processing, zone picking, put-to-light/voice picking support, receiving and putaway optimization, cycle counting workflows, and cross-docking.

The key question is whether the ERP's native WMS is sufficient for your warehouse complexity or whether you need a dedicated WMS integrated with the ERP.

Advanced Demand Forecasting

Statistical demand forecasting using time-series analysis, seasonal decomposition, and trend detection should be table stakes.

Better systems incorporate causal factors (promotions, weather, economic indicators), new product introduction forecasting, and intermittent demand models for slow-moving items. Evaluate the accuracy of the forecasting engine with your actual demand patterns, not just marketing claims.

Multi-Location Inventory Management

Beyond basic inventory tracking, evaluate replenishment planning across locations, transfer order optimization, allocation logic for scarce inventory, and network-wide available-to-promise.

For distributors with regional warehouses serving different customer bases, the system should support location-specific stocking strategies and automated replenishment from central distribution centers.

EDI and Supplier Portals

EDI capability should include support for common transaction sets (850 Purchase Order, 810 Invoice, 856 ASN, 855 PO Acknowledgment), automated mapping and translation, exception management for failed transactions, and compliance testing with major trading partners.

Supplier portals provide visibility into purchase orders, delivery schedules, and quality issues for suppliers who do not use EDI.

Order Management and Fulfillment

Multi-channel order capture (EDI, web, phone, email, customer portal), intelligent order routing across warehouses, credit check and hold management, allocation and promising, pick/pack/ship workflow, and proof-of-delivery.

Evaluate how the system handles backorders, partial shipments, split shipments across warehouses, and customer-specific shipping requirements.

Route Optimization and Logistics

For distributors that operate their own delivery fleets, route optimization, load planning, and delivery scheduling are critical capabilities.

Integration with third-party logistics providers (3PLs) through APIs, carrier rate shopping, and automated shipping label generation are relevant for parcel shipments. Freight audit and payment capabilities help control one of the largest variable costs in distribution.

Lot Tracking and Expiration Management

Essential for food, beverage, pharmaceutical, and chemical distributors.

FIFO/FEFO (First Expired, First Out) allocation, shelf-life management, lot recall workflows, and expiration date visibility at the order promising stage prevent shipping expired product and ensure regulatory compliance.

Pricing and Margin Management

Distribution pricing is notoriously complex. Your system should handle:

• Matrix pricing (price based on customer class, product class, and quantity)
• Customer-specific pricing and contract pricing with volume commitments
• Cost-plus pricing with variable markups
• Promotional and time-limited pricing
• Real-time margin calculation at the order line level

The ability to model pricing scenarios and understand margin impact before committing to a price is a significant competitive advantage.

Returns Processing

Returns (reverse logistics) are a fact of life in distribution. The ERP should handle RMA processing, quality inspection of returned goods, restocking workflows, credit memo generation, and warranty tracking.

For distributors with high return volumes, the efficiency of the returns process directly impacts customer satisfaction and inventory accuracy.

Drop-Ship Management

Many distributors fulfill a significant portion of orders through drop-ship from manufacturers or vendors. The system should support automated drop-ship PO generation from sales orders, vendor-direct shipping, tracking and notification, and proper cost and margin accounting for drop-shipped orders.

Distribution ERP Cost Ranges

SMB Distributors ($10M-$250M Revenue)

• Total First-Year Investment: $30,000 - $200,000
• Software Licensing: $15,000 - $80,000/year (cloud subscription) or $30,000 - $150,000 (perpetual license)
• Implementation Services: $15,000 - $120,000 (typically 0.75-1.5x the annual software cost)
• Ongoing Annual Costs: Subscription renewal plus 15-20% for support and maintenance

Enterprise Distributors ($250M+ Revenue)

• Total First-Year Investment: $300,000 - $3,000,000+
• Software Licensing: $150,000 - $1,500,000+/year depending on user count, transaction volume, and modules
• Implementation Services: $200,000 - $2,000,000+ (typically 1.5-2x annual software cost)
• Ongoing Annual Costs: $150,000 - $1,000,000+ including subscription, support, managed services, and ongoing optimization

Why Distribution ERP Costs Less Than Manufacturing ERP

Distribution ERP implementations tend to be less expensive than manufacturing because the process complexity is lower. There are no BOMs, routings, or shop floor execution systems to configure.

However, distributors often have higher data migration complexity (catalogs with hundreds of thousands of SKUs, complex pricing matrices, customer-specific agreements) and more integration requirements (EDI, ecommerce, WMS, TMS) that can drive up costs.

Frequently Asked Questions

Do I need a separate WMS, or is the ERP's warehouse module enough?

This is the most important architectural decision for distributors.

If your warehouse operations involve fewer than 50 pickers, straightforward pick/pack/ship workflows, and moderate SKU counts, an ERP-native WMS module will likely suffice and is significantly simpler to maintain.

If you operate high-volume warehouses with 100+ pickers, complex picking strategies (zone, wave, batch), automated material handling equipment (conveyors, sortation, AS/RS), or value-added services, a dedicated WMS integrated with your ERP is usually the better choice.

The integration between ERP and WMS is well-understood and most ERP vendors have pre-built connectors to major WMS platforms.

How do we handle the transition from our current system without disrupting operations?

This is a critical concern for distributors because any disruption to order processing directly impacts revenue.

The standard approach is a phased cutover with parallel running: continue operating the old system while the new system is validated, then cut over during a planned low-volume period (holiday weekend, seasonal lull).

Critical preparation includes thorough data migration testing (especially inventory balances and open orders), customer and supplier communication about any temporary changes, and contingency plans for reverting to the old system if critical issues arise.

Most distribution ERP implementations plan for a 2-4 week stabilization period after go-live where additional support resources are on-site.

What is the ROI timeline for distribution ERP?

Distributors typically see measurable ROI within 12-18 months of go-live. The fastest returns come from:

• Inventory optimization: Reducing carrying costs by 10-20% through better forecasting and replenishment
• Warehouse labor productivity: 15-30% improvement with WMS-driven workflows
• Order accuracy improvement: Reducing costly mis-ships and returns
• Administrative labor reduction: Eliminating manual order entry and data reconciliation

For a $50M distributor operating at 2% net margin, a 1% improvement in gross margin through better pricing and inventory management is worth $500K annually, which alone can justify a mid-market ERP investment.

How do we handle complex pricing in a new ERP?

Pricing migration is one of the highest-risk areas in distribution ERP implementation.

Start by auditing your current pricing structure: how many pricing tiers exist, how many customer-specific agreements, how pricing is maintained and by whom. Consolidate where possible before migration, because most distributors discover that their pricing complexity has grown organically to the point of being unmanageable.

The new system should enable pricing rules and formulas that reduce the maintenance burden. Plan for extensive parallel testing of pricing output between old and new systems, as pricing errors directly impact margin and customer relationships.

Should we move to ecommerce, and how does that relate to ERP?

Most distributors need a B2B ecommerce capability, even if it initially serves only a portion of their customers.

The critical architectural decision is whether to use your ERP vendor's native ecommerce module (NetSuite SuiteCommerce, SAP Commerce Cloud, Acumatica's commerce capabilities) or a standalone ecommerce platform (Shopify Plus, BigCommerce B2B, Adobe Commerce) integrated with your ERP.

Native solutions offer tighter integration but less ecommerce sophistication. Standalone platforms offer richer customer experiences but require ongoing integration maintenance. The right choice depends on how central ecommerce is to your growth strategy.

How do we evaluate EDI capabilities in a new ERP?

EDI evaluation should go beyond basic transaction support.

Map your top 20 trading partners and their specific EDI requirements. Determine how many unique maps you maintain today and how often they change.

Evaluate whether the ERP handles EDI natively, through an integrated module, or requires a third-party VAR (Value Added Reseller). Test the exception handling workflow: when an EDI transaction fails validation, how is it flagged, who handles it, and how quickly can it be resolved?

Automated compliance testing for new trading partners should also be evaluated.

What about integrating our ERP with our delivery fleet?

For distributors operating their own trucks, integration between ERP and fleet/route management is essential.

The ERP's order management should feed delivery stops and shipment details to route optimization software, which plans efficient delivery routes. Proof of delivery (electronic signature, photo capture) should flow back to the ERP to trigger invoicing. GPS tracking and estimated time of arrival (ETA) updates provide customer visibility.

Some ERP systems (particularly distribution-specific ones like Prophet 21 and SX.e) have native route management; others require integration with dedicated fleet management platforms like Descartes, Locus, or Routific.

How do vendor rebates work in distribution ERP?

Vendor rebates (also called purchase rebates or supplier incentives) are a significant source of margin for many distributors, sometimes representing 1-3% of gross margin.

Your ERP must accurately track purchases against rebate agreements (volume-based, growth-based, product-mix-based), accrue rebate income in the correct accounting periods, and generate claims for submission to vendors.

The complexity arises from managing hundreds of rebate agreements with different terms, tiers, and measurement periods. Purpose-built distribution ERPs generally handle this better than generalist ERP systems, where rebate management may require customization.

Can ERP help us compete with Amazon Business?

Your ERP alone will not neutralize the Amazon Business threat, but it is the foundation for your competitive response.

The areas where distributors can differentiate from Amazon Business are:

• Technical expertise and application knowledge
• Local inventory availability and same-day delivery
• Custom kitting and value-added services
• Credit terms and relationship pricing
• After-sale support and service

Your ERP needs to enable all of these efficiently. Fast, accurate order processing, real-time inventory visibility for your sales team, flexible pricing that rewards loyalty, and integrated CRM that tracks the relationship value beyond individual transactions are all ERP capabilities that support a differentiation strategy.

How many ERP vendors should we evaluate?

For distribution ERP, we recommend evaluating 3-5 vendors in depth.

Fewer than three means you lack comparison data for negotiation and may miss a better fit. More than five creates evaluation fatigue and extends the timeline without proportionally improving the decision quality.

Start with a long list of 8-10 based on industry fit, size fit, and deployment preference, then narrow to your short list through initial demos and reference checks before investing in detailed evaluation, scripted demos, and pricing negotiations.

Start Building Your Distribution ERP Requirements

The single most valuable thing you can do before contacting ERP vendors is to document your requirements. Not a wish list of every feature imaginable, but a prioritized, weighted set of capabilities organized by functional area and ranked by business importance.

Our ERP Functional Requirements tool helps distributors build this document systematically. It covers order management, inventory and warehousing, purchasing and supplier management, pricing, financial management, analytics, and integration requirements -- structured specifically for wholesale and distribution operations.

Build Your ERP Requirements Document

Distributors who approach the ERP market with a clear requirements document get better results across the board:

1. Better vendor demonstrations, because vendors can show relevant capabilities instead of generic overviews
2. More accurate pricing, because the scope is defined
3. Faster implementation timelines, because requirements are already validated internally

It is the highest-ROI activity in the entire ERP selection process, and it typically takes 2-3 weeks to complete properly.