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VS1 Cloud Blog

Distribution Software for Small Businesses: Benefits and Features

13th May 2021 | Wholesale

Many businesses streamline their operations by using distribution software. Small business use of this technology was historically minimal due to the robust abilities and the high cost associated with distribution ERP tools. Fortunately, as software industries have changed and more solutions have become available, distribution ERP software has become a viable option for small businesses.

Distribution software for small businesses can help clients get orders out on time, track shipments and follow-up with customers. Many solutions allow you to customize your program with your specific business needs in mind. Changes in available pricing models and deployment strategies are some of the factors that are making this tool more readily accessible to small businesses.

What is Distribution Software for Small Businesses?
Distribution software is a program that works to streamline the distribution process through aspects such as automation and workflow connectivity. It’s a suitable solution for companies in a wide variety of fields and of different sizes. Small business distribution software aims to alleviate bottlenecks in day-to-day workflows by integrating various tasks and components. This often includes, but is not limited to, distribution, production and manufacturing processes.

Distribution software is a type of ERP (enterprise resource planning) software. The main benefit and goal of ERP software solutions is the centralization of data and workflows. For example, a traditional ERP solution might contain connected accounting and warehouse systems, therefore leading to the ability to automate interactions between the two departments and also creating new data insights and visualizations. Distribution software also contains various features, and we’ll discuss some of these integrated tools more in-depth in the features section of this article.

Increase Productivity
Automation is a key function in distribution software. Small businesses often find themselves in a notorious stage of growth known for having a lot of tasks to complete and not a lot of time or the resources required to finish them. By automating tasks such as sales order entry and shipment notifications, you can free up valuable time for other essential business activities and increase productivity. Additionally, you can reduce human errors through the automation of crucial processes. For example, you can eliminate common manual keystroke errors that negatively impact your business.

Boost Revenue
Small business distribution software can help your company boost revenue by increasing production quantity and quality. By implementing checks and balances during the manufacturing process, more product can be created, and downtime can be reduced. For example, real-time visualization of how much time your machines spend sitting idle in your manufacturing facility could help you develop a more efficient production system.

Generate Repeat Customers
With more efficient manufacturing and distribution functions intact, customers will reap the benefits of distribution software. Small business can capitalize on this technology by automating factors such as shipping notifications and making the production process more rapid, therefore leading to more satisfied customers. Additionally, distribution software integrations with tools such as CRM can personalize product recommendations and improve the probability that a customer will make a purchase.

Analyze Data From Across Your Business
Data centralization is one of the main benefits of small business distribution software. With these programs, you can glean new insights from across your business, leading to increased transparency and troves of useful data. By allowing employees from across your company to have access to data from other areas, trends can be spotted, and information can be quickly disseminated. Many software programs also offer customizable dashboards and data visualizations to further speed up the insight gathering process.

Common Features
Small business distribution software can contain a wide variety of features, which often makes it difficult to find a solution that actually does what you need it to do. Here are some of the most commonly included features that you can find in these systems. Keep these components in mind as you develop a list of capabilities that you will need from your program.

Sales Order Management
Sales order management can help your business with entering, processing and fulfilling sales orders. Some tools contain automated functions such as the monitoring of shipments and invoices. Small business distribution software can also keep track of sales orders from different touchpoints of your business. This can help alleviate tasks such as manual data entry and the tracking of various processes, therefore freeing up staff time to work on any of the dozens of other necessary tasks that need to be performed to keep a small business afloat.

Customer relationship management is a crucial aspect of running a successful company. After all, without customers, there is no revenue and, therefore, no business. CRM features include more relevant ad targeting, management of contacts and a database of customer records. By having all of this information at the tip of your fingers, you can make the purchase process easier on your customers, therefore further incentivizing them to go with your business.

For example, by keeping information such as order history, address and credit card information on hand, all a user has to do to make a purchase is sign into their account and select the product that they wish to buy. An excellent example of a company that is efficiently using this functionality is Amazon, which takes this process one step further by offering a 1-click to buy option that automatically uses your default address and payment information to facilitate a quick purchase.

Procurement Management
Choosing and managing suppliers for your business is no easy task. Procurement management tools can help you measure a supplier’s performance, schedule purchases and create purchase orders. Some small business distribution software platforms may also include the ability to issue requisition requests and to forecast stock levels based on historical data. Another key benefit of procurement management is the ability to anticipate the number of materials that your business will need to meet customer demand, which can reduce spoilage and boost revenue.

Warehouse Management
Warehouse management tools can help with picking, packing, shipping and put-away. Advanced features can include slotting and inventory optimization. Warehouse management is a helpful tool in small business distribution software because it provides visualization of what’s happening in your warehouse and of how orders are being completed and processed. Some distribution software vendors even offer IoT functionality, which allows you to connect machines and devices to the internet to see how your warehouse is operating in real time.

Production/Manufacturing Management
Manufacturing management and warehouse management are complementary tools that go hand-in-hand. This tool can assist in capacity planning, production planning, kitting and shop floor control. These elements work to vamp up the production process by making workflows faster and less prone to human error. By maximizing productivity, you can boost revenue and create more products.

Usage by Industry
A wide variety of companies benefit from distribution software — not just those that are in the distribution or manufacturing industries. Because product or service distribution is an essential facet of many businesses, distribution software can be helpful to a wide range of companies. Here are some of the many industries where companies use distribution software:

Food and Beverage
When looking at different distribution vendors, you’ll want to consider available deployment methods. There are pros and cons to on-premise and cloud distribution software that you’ll want to take into account when selecting the installation method that’s right for your small business.

One of the main differences between on-site and cloud distribution software is that with on-premise software, there is a high installation fee. Cloud-based software is much cheaper to deploy up front, but the cost of either deployment method averages to a similar price over a system’s lifetime. If your company can’t pay or isn’t willing to pay the installation fee for an on-premise solution, then a cloud-based option will be your best bet.

Another significant difference between these deployment methods is availability. Cloud distribution solutions are accessible from anywhere at any time as long as you have internet access. On-site software can only be used from a device or computer with immediate access to your company’s network. However, it may be accessible when there is no internet available, unlike a cloud-based option. Depending on when and where users need access to the distribution program, you may opt for a program that is available from multiple locations or one that is available when the internet isn’t accessible.

The method and cost of obtaining software updates is another factor that differentiates cloud and on-premise distribution programs. Because cloud-based solutions are connected to the internet, updates are relatively simple and may even be conducted automatically. On the other hand, on-premise software updates can cost extra money and may require that you have someone to come into your office to assist in the implementation of the updated system.

Data security and privacy is a factor that many companies are concerned about when deciding between on-premise and cloud distribution programs. There is a misconception that cloud-based distribution software isn’t as secure as on-premise due to its connectivity to the internet. However, the security of cloud distribution software is better than ever before, and vendors offer incredibly secure platforms that are difficult for hackers to penetrate. Some companies may still opt for an on-site solution because of the sensitivity of their data. If you are concerned about a vendor potentially having access to your private data, you can always go with an on-premise program.

Final Thoughts
Distribution software for small business is a viable technology that can significantly improve productivity, increase revenue and improve customer retention. As an ERP solution, distribution software can connect to a broad suite of tools to automate various business processes. These tools are available both on-premise and as cloud-based solutions, making them accessible to a wide variety of businesses and users. As market competition continually becomes more fierce, impactful tools such as distribution software can help your company stick out from the pack.

By: Lindsey Jenkins, SelectHub