The trading process affects numerous different businesses from all the possible niches. Trading companies can deliver goods and services to end users (B2C), other businesses (B2B), and governmental bodies (B2G). Entrepreneurs sell everything from vegetables to airplanes and from toys to weapons. Regardless of the company’s focus industry or size, marketers have two key goals: increase profits and improve the brand’s presence. Modern software aka ERP for trading company greatly facilitates reaching both of these objectives.
While it may be clear that powerful programs can improve the results of trading firms, we want to dive a bit deeper to see how exactly ERP apps can contribute to your company’s growth. Further, you will find out how enterprise programs solve current trading challenges, which application types and modules are available for users, and how to get the maximum benefits out of the chosen software. Feel free to explore the most interesting sections but don’t forget to take a look at our FAQ that concludes the most important insights. Let’s begin!
Crucial Challenges for Marketers + ERP Solutions
To begin with, why not to review existing market challenges for trading firms? According to WTO, the global export value of both goods and services was $23 trillion in 2017. Wherein, the USA is responsible for $4.9 trillion trading size with other nations, including $1.9 trillion value of the export-import market with three key partners: China, Canada, and Mexico. You can check the American trading links using this interactive map with an exact breakdown of exported and imported values by countries.
These numbers are even bigger nowadays so businesses involved in the global trading process directly or indirectly can get insane profits if they have efficient strategies. Generally, an average ERP system for trading company optimizes business processes and provides better planning. The software can solve all the critical challenges for actual trading sphere:
- Client dependence. Customers are vital for any trading company. They can be common people, large corporations or whole nations but they are your clients and you must make them happy. With ERP tools, it becomes much easier to maintain customer relationships, predict their needs, and deliver exactly what they want.
- Interruptions and errors. Trading corporations often deal with transportation and warehousing. Numerous predictable and unexpected problems can arise, e.g. loss of cargo, delivery delays, regulation changes, and so on. ERP systems allow your staff reacting to these issues in real time and also minimize human-related errors.
- Managerial tasks. From finances to supply chain to employees, trading teams have to manage various departments to be successful. The exact importance of each task depends on the type of business but ERP programs have enough modules for all clients. You can install various apps, including HR, accounting, and tracking ones.
- Required evolution. New competitors appear all the time while old rivals introduce new promotions, top-quality products, and discounts. As a marketer, you should be flexible and open to changes. ERP apps not only help to introduce new ideas seamlessly but they also allow you to plan the future market expansion beforehand.
Of course, different business types and sizes come with different challenges. For instance, firms that are involved in the global B2B or B2G trading should remember about globalization and its impact, political issues such as sanctions, regulatory compliance, prices of natural resources, and so on. To realize the globalization size, you can look at two more maps: Shipmap designed by Kiln and Global Goods Trade created with the Blueshift Map Maker. Local companies with less ambitious goals should focus on customer relationships and warehouse management more than on global concerns.
Nevertheless, ERP applications can help in both cases. Let’s look at their capabilities.
The Idea Behind ERP for Trading Business
Basically, ERP program is a set of tools or modules that are designed to make business processes more optimized. According to the name, such apps help companies to manage all the available resources, including finances, time, employees, and materials. Depending on the brand’s niche, ERP systems can feature different modules and preferences.
Say, an aerospace agency would require top-notch security, tracking apps, and perfect compliance with various governmental rules. In the same time, distributors of smartphones and other gadgets opt for powerful CRM tools, platforms that facilitate interaction with suppliers, and analytical applications to measure profitability.
Definitions of ERP System for Trading Company
Vendors of prepackaged software that are described in the next subsection often feature different definitions of ERP. They just want to sell their software products. Thus, you should focus on unbiased approaches, for example, terms described by Gartner or Investopedia.
Still, these resources don’t define trading ERP tools precisely. Let’s try to figure out everything on our own. First things first, the trading industry features concepts of storing products/materials and selling them to clients through the related delivery. Means, trading ERP apps must provide for:
- Planning inventories.
- Covering customer relations.
- Managing the supply chain.
All other services may be useful but they aren’t obligatory. Modules like accounting or HR management facilitate in-house processes of all teams, not only trading ones. Later, we will talk about functional areas in more detail.
Actually, any modern ERP trading system is a software application that delivers CRM, SCM, and WMS tools but also can feature other components. Its main goal is to streamline core processes, i.e. storing, delivering, and selling goods and/or services.
Types of Programs
Despite there are a lot of different classifications, we want to look at the single one that includes only two ERP types:
- Out-of-the-box software. Applications that feature identical functions and high further fees. They are sent to all customers with poor customization or without changes.
- Bespoke software. Applications that come with unique features for each given client. They often include all the possible services (updates, support, etc.) in the final price.
As you can see, the main difference is in the development approach. When vendors of ready-made applications deliver same or similar products to all their clients, custom teams create unique software from scratch. It should be clear that both approaches have pros and cons so it’s only up to you which program to choose. We can only state that bespoke applications suit the needs of each customer perfectly and also provide a great advantage over other firms.
For trading teams, the unique brand’s voice is essential so custom software should be more useful than out-of-the-box analogs. Means, you will be able to attract more users thanks to better targeting, analyzing, and predicting their behavior. Unlike ready-made alternatives, bespoke apps can distinguish your trading company out of the crowd.
Using a single powerful ERP for trading business, employees can handle each and every important process. Modern platforms deliver all the core features and stand for the concept of the all-in-one management. Simultaneously, the most complex firms can consider using two-tier ERP systems that try to decentralize management and split functions between several separate applications. Regardless of the chosen type and the complexity of the team, you should know which functional areas are crucial for ERP apps.
The majority of software tools provide for the next modules. Most of all prepackaged programs include them and, obviously, you can ask to add them by contacting custom devs. Globally, key functions for trading teams are based on four directions that include minor tasks:
- Sales management. Focuses on outbound orders and financial tasks related to them. This area also can be covered with more advanced CRM tools used not only for sales but also for lead processing, mailing, analysis, and so on.
- Purchases management. Tools are similar to the previous point but they focus on procurement. With this module, your staff can manage orders, requests, complaints, shipment, billing, and other interactions with vendors.
- Inventory management. Covers the entire warehousing process, including storage planning, goods tracking, scheduling, analysis of costs, various rules and requirements, measurements, descriptions, and general inventory in/out movements.
- Supply chain management. Partially, this module intersects with all the previous ones but with higher attention to shipment itself. It covers quantity/quality management, tracking of products and fleet en route, communication with suppliers and clients, etc.
Apart from these modules, ERP apps also may include analytical and reporting tools, HR apps for internal management, financial systems, and administrative stuff.
Moreover, designers of bespoke solutions can integrate other desired parts in the final product. You’re only limited with imagination and budgets!
ERP Software for Trading Company Key Benefits
Okay, now, let’s move to exact advantages of the described systems and their functions. For different trading teams, the benefits also can vary because of unequal demands and capabilities. Still, the most valuable and game-changing things remain the same for each brand from a small Brazilian football shop to a giant gadgets’ manufacturer with a fruit logo. These benefits are listed right below:
- Accurate reporting. All the core data is visible and available so analytics can easily get it to deliver useful reports for various purposes. As a result, the team can improve its performance by focusing on key areas.
- High transparency. Respectively, important information is always available for employees that can use it as they wish. By checking inbound and outbound flows, you can make more elaborate decisions related to the company’s growth.
- Pleased clients. Being combined, proper CRM and data management lead to great results. Clients feel this personal attention and have more chances to turn into brand advocates. As well, you get higher conversion rates for new customers.
- Precise planning. Again, having key data at your fingertips facilitates all stages of planning. It becomes easier to forecast future demand and, hence, manage inventory and sales better. Good predictions are valuable in modern trading.
- Smooth control. Last but not least, quality ERP systems provide for perfect control over various aspects, including employees’ performance, shipment schedules, and so on. You always can check how the company’s things are going.
If you want to get the maximum advantages, consider cooperating with custom developers that can tailor the software to your needs. Let’s talk about this approach more detailed.
Choosing the Most Suitable Software
Here, be sure to grasp the main insight: you must always know what your team exactly needs. It may sound odd but some companies do well without ERP apps at all. Businesses like local retail shops simply don’t need large and complex software, for example.
The next important thing to know relates to program types. Traditional out-of-the-box ERP software for trading company suit different businesses just because they are happy with basic functions. Say, a regular bookstore without great ambitions can order a prepackaged app for relatively low initial price and stick to it in the future.
However, if you want to get market advantage and/or have unique requirements, we’d suggest opting for custom ERP systems. These applications can take more time to be developed and feature higher upfront costs but they will have much higher ROI later. Plus, you can foresee scalability needs, upgrades, and maintenance that will be included already.
The last section is all about short conclusions. You can move through these questions to refresh key insights and remember the most important things from the article.
What Does ERP Mean?
ERP is a strategy for companies that want to manage available resources better. As well, the abbreviation covers software apps that are used for this task.
Why Use ERP for Trading Company?
ERP tools simplify all the stages of the trading process: getting leads, converting them to clients, selling and delivering goods, managing inventory, etc.
What Are Pros and Cons of Trading ERP?
Trading apps reduce money and time costs, boost performance, and improve the brand’s presence. Nonetheless, these apps are pretty expensive and require proper planning.
How Much ERP Implementation Costs?
Prices vary greatly depending on the modules installed and the overall program’s complexity. You can choose between license-based ERP apps that cost from $10 to $200 per user per month and one-time payments that can go up to several million.
What Is the Best ERP Software for Trading Company?
Talking about customization and meeting your needs, custom ERP systems are better than prepackaged ones. However, if you want to get your software quickly without high upfront expenses, choose out-of-the-box solutions.
ERP programs are wonderful. They help to manage various processes and, respectively, can benefit your business. But they are top-tier software solutions so you should remember about careful planning and understanding of the brand’s requirements. Implement ERP apps only when you really need them.
If it’s difficult to define the company’s needs and strategies or you simply have ERP-related questions, address them to our development team at Diceus.