An ERP for a wholesale or distribution company must control four things on every order line: where the stock is, what this customer pays, what the goods really cost landed, and how and when they will be delivered. The best choice is the one that handles your warehouses, pricing rules and delivery model without spreadsheets alongside it.
Distributors run on thin margins and high volumes, so small errors repeat thousands of times: a wrong price tier, a landed cost that leaves out freight, a picker sent to an empty bin. This checklist is written for distributors in the US, UK and UAE choosing or replacing an ERP. If your pricing, warehouse or delivery model is unusual enough that packages need heavy workarounds, our custom ERP software page explains how we build distribution systems module by module.
What does a distribution ERP need to do?
It needs to run the order-to-cash and procure-to-pay cycles around inventory, with accurate costs and prices at line level. The table maps the core areas to the questions that separate a good fit from a poor one.
| Area | What to test | Why it matters for distributors |
|---|---|---|
| Multi-warehouse inventory | Stock by warehouse, bin and lot; transfers in transit; available-to-promise | Customers are promised stock that is actually reachable |
| Pricing | Customer-specific prices, tiers, contract prices, quantity breaks, rebates | Pricing errors flow straight to margin and disputes |
| Landed cost | Freight, duty, insurance and handling added to item cost | Without it, margins look better than they are |
| Purchasing | Reorder suggestions, supplier lead times, purchase order tracking, supplier price lists | Stock-outs and overstock both cost money |
| Warehouse operations | Pick lists, pick paths, barcode scanning, packing, cycle counts | Labour and accuracy in the warehouse |
| Delivery | Routes, delivery slots, proof of delivery, carrier integration | The last step the customer sees |
| B2B ordering | Customer portal or e-commerce with their prices and stock | Fewer phone and email orders keyed by hand |
| Finance | Credit limits, statements, rebates accrued, margin by customer and product | Cash collection and true profitability |
How should multi-warehouse stock work?
Each warehouse should hold its own stock, with transfers between them tracked as stock in transit rather than disappearing and reappearing. Check three things in demonstrations:
- Available-to-promise. When sales enters an order, the system should show stock available now and incoming, by warehouse, after existing commitments.
- Bins and locations. If you pick from bins, the ERP or a connected warehouse system must know bin contents, otherwise pickers search.
- Lots, serials and expiry. If you sell food, chemicals, pharmaceuticals or serialised equipment, traceability by lot or serial is not optional. Test first-expiry, first-out picking if it applies.
For the inventory module in more depth, see our guide to the ERP inventory management module.
How should an ERP handle distributor pricing?
It should calculate the right price automatically from rules, so sales staff never look it up in a spreadsheet. Distributors typically need a price hierarchy, applied in a defined order:
- Contract price for this customer and item
- Customer-specific price list or discount group
- Quantity break pricing
- Promotional price for a date range
- Standard list price
Ask the vendor to show which rule produced a given price on an order line. If nobody can explain a price, nobody can defend it in a dispute. Rebates (money returned to customers after reaching volume targets, or received from suppliers) need tracking and accruing in the ledger, not in a separate workbook.
What is landed cost and why does it matter?
Landed cost is the total cost of getting goods into your warehouse: the supplier price plus freight, duty, insurance, brokerage and handling. An ERP should let you allocate those charges to the items received, by value, weight, volume or quantity, even when the freight invoice arrives weeks after the goods. Without landed cost, imported lines look more profitable than they are and pricing decisions are made on the wrong numbers.
Which delivery models should the ERP support?
That depends on whether you run your own vans, use carriers, or both.
- Own fleet: route planning or at least route grouping of orders, loading lists, driver apps with proof of delivery (signature, photo, time), and returns or short deliveries recorded at the door.
- Carriers: shipping labels, tracking numbers on the order, and freight costs captured for landed cost or customer recharges.
- Customer collection: collection slots and release controls tied to payment or credit status.
Field and driver apps are often where packages are thinnest. Our employee field apps page covers delivery and proof-of-delivery apps connected to an ERP.
Should distributors offer a B2B ordering portal?
If customers reorder regularly, a portal that shows their own prices, stock availability and order history reduces order entry and errors. The portal must use the same pricing rules and stock figures as the ERP in real time or near real time; a portal with a different price than the invoice causes more work, not less. Our guide to ERP and e-commerce integration covers the sync design.
Distribution ERP requirements checklist
Use this as the skeleton of your requirements or RFP.
Inventory
- Stock by warehouse, bin, lot or serial, with expiry where relevant
- Inter-warehouse transfers with in-transit stock
- Available-to-promise at order entry
- Cycle counting without stopping the warehouse
Pricing and sales
- Contract, customer, tier, quantity break and promotional pricing with clear precedence
- Price source visible on each order line
- Customer and supplier rebates accrued
- Credit limits enforced at order entry
Purchasing
- Reorder suggestions using lead times, minimums and pack sizes
- Supplier price lists with effective dates
- Landed cost allocation, including charges invoiced later
Warehouse and delivery
- Pick, pack and dispatch with barcode scanning
- Route grouping, loading lists and proof of delivery
- Carrier labels and tracking
Customers and finance
- B2B portal or e-commerce sync using ERP prices and stock
- Margin by customer, product, salesperson and branch
- Statements, collections and disputes linked to delivery proof
Which reports should a distribution ERP produce?
A distributor's management should be able to answer margin, stock and service questions without exporting to spreadsheets. Ask each vendor to produce these reports from your demo data.
| Report | Question it answers | Who reads it |
|---|---|---|
| Margin by customer, product and salesperson, after rebates and landed cost | Where do we actually make money? | Directors, sales managers |
| Stock ageing and slow movers by warehouse | What is tying up cash? | Purchasing, finance |
| Fill rate and back orders | Are we shipping complete orders on time? | Operations, customer service |
| Stock-out and reorder exceptions | What will run out before the next delivery? | Purchasing |
| Price overrides by user | Who is discounting below the rules, and how often? | Sales managers, finance |
| Debtors ageing with delivery proof attached | Which overdue invoices are disputed, and why? | Credit control |
| Delivery performance by route or carrier | Which deliveries fail or arrive late? | Logistics |
For designing dashboards that people actually use, see our guide to business dashboard KPI design.
What questions should distributors ask in ERP demonstrations?
Give each vendor the same script and data, then ask them to show, not describe:
- Enter an order for a contract customer with a quantity break and a running promotion, and show which rule set each line price.
- Receive an import container, then allocate a freight invoice that arrives two weeks later, and show the change in item cost.
- Transfer stock between two warehouses and show it in transit.
- Pick an order by scanning, short-pick one line and show what happens to the back order.
- Record a delivery with proof of delivery on a phone, including one damaged item returned at the door.
- Show margin for that customer for the month, after rebates.
If a step needs an export, a manual journal or a workaround, write it down. Those notes are worth more than any brochure.
Package or custom ERP for distribution?
Many mainstream ERP packages cover wholesale distribution well, and for a distributor with conventional pricing and one or two warehouses, a package is usually the faster and cheaper route. Custom becomes worth evaluating when your advantage sits in something packages handle awkwardly.
| Your situation | Usually better fit |
|---|---|
| Standard pricing, one to a few warehouses, carrier delivery | Packaged ERP |
| Complex contract and rebate structures across many customers | Test packages hard; custom pricing engine if they fail |
| Own fleet with route delivery, van sales or cash collection | Package plus custom driver app, or custom ERP |
| B2B portal is central to how customers buy | Custom portal integrated with package, or custom ERP |
| Several trading companies sharing stock | See our guide to multi-entity ERP governance |
When a new ERP is not the answer
If your stock is accurate and your pricing works, but order entry is slow, the fix may be a B2B portal or an integration, not a new ERP. If warehouse accuracy is the problem, check processes (receiving discipline, bin labelling, count routines) before blaming software. A new system run with old habits gives the same results.
Illustrative example
This scenario is illustrative. A building supplies distributor with three branches sells to trade accounts on contract prices, runs its own vans and gets many orders by phone. The package it evaluated handled stock and finance well, but contract pricing per site and van delivery with proof of delivery needed manual steps. The decision path was to keep the requirements list as above, score packages against it, and price a custom pricing and delivery module as the alternative, starting with a pilot of order entry with pricing and the driver app.
How to start
Prepare your price rules written out as a hierarchy, a sample of 50 real order lines with the prices they should have produced, your warehouse and bin structure, your delivery model, and the reports management reads each week. Put it into our software requirements brief template so every vendor answers the same questions.
Then discuss the project with us. Timeline Digital builds 2 to 3 key modules as a free pilot before the full project starts, for distributors often pricing and order entry, warehouse picking or the driver app, so you see your own orders flowing before committing.