What is a merchandise management system?

Merchandise management: definition and purpose

A merchandise management system manages the goods of a trading or manufacturing business from purchasing to shipping. It maintains item master data, stock levels, suppliers, purchase orders, customer orders, delivery notes and invoices. Every movement is posted so that the stock in the system matches the actual warehouse. The result is a reliable answer to what is deliverable and what is not.

Merchandise management is a sub-area of an ERP system. For retailers without their own production it is often sufficient as the central tool, because it covers exactly the processes that count in daily business. Accounting and payroll usually run in separate programs and are connected via interfaces.

Features at a glance

Core functions are inventory management with minimum quantities and reorder points, reorder suggestions, quote and order processing, invoicing, shipping handling and reports on revenue, margin and slow movers. Depending on the industry, batch or serial number tracking, several warehouses, bills of materials and drop shipping, where the supplier delivers directly to the customer, are added.

For online retail, the connection to stores and marketplaces is crucial. Orders flow into the merchandise management system automatically, and stock and prices go back to the store. Well-known solutions include JTL-Wawi, Xentral and Plentymarkets; there are also industry solutions and custom developments.

• Inventory management with minimum quantities and reorder suggestions
• Quotes, orders, delivery notes and invoices
• Multiple warehouses, batches and serial numbers
• Connection to online store, marketplaces and shipping providers
• Reports on revenue, margin and inventory turnover

Real-world example: a retailer with a shop and an online store

A specialist retailer sells in a physical shop and through an online store. So far, stock levels are reconciled by hand. The result: items are sold online although they are already gone in the shop, and customers receive cancellations. With a merchandise management system, shop and store work from the same stock levels, and sales are posted immediately.

In addition, the system generates reorder suggestions for suppliers, prints shipping labels and passes invoices to accounting, for example via a DATEV interface. The retailer saves time in the office and sells more reliably because availability and delivery times are right. Returns and credit notes can also be traced cleanly, without anyone having to reconcile lists.

Selection, common mistakes and imple­menta­tion

Before selecting, check which processes are really necessary and which interfaces the system needs. Typical mistakes are unmaintained master data, goods movements not posted, too many special solutions and missing training. Plan the data migration and a stocktake at the start carefully so that stock is correct from day one.

Nano Concepts connects merchandise management, online store, marketplaces and accounting via interfaces and develops additional functions when standard solutions do not map your processes, for example a warehouse app for the smartphone, custom pricing logic or reports for management. On request we also support the switch from Excel or a legacy solution.