ERP Software for Value-Added Distribution

Value-added distributors (VADs) depend on services to drive product sales and improve customer retention. Furthermore, services have higher margins and are less price sensitive than products, making them a lucrative source of revenue. However, according to a study from Epicor, 70 percent of distribution businesses bring less than 25 percent of their sales from services.  

Where are VADs going wrong? Why aren’t services contributing more to their bottom lines? It’s possible that their services aren’t quite what customers need. Perhaps they struggle to distinguish their offerings from the competition. Determining the right services to provide isn’t an easy task, but there is something that can help: enterprise resource planning (ERP) software. Below, we explain how distributors can use their ERP to select the best service offerings.  

Uncover Needs of Existing Customers

What exactly is it that your customers need to get the most from your products? Assembly services? Field maintenance? Customizations? If you don’t know the answer, there’s one simple solution you can use to find out: ask them! Create a quick, clear survey that asks customers what services they want. Entice clients to fill them out by offering an incentive, such as a discount. 

Another method is to leverage the insights from current customer data. When you integrate your ERP and CRM systems, back-end users gain easy access to customer interactions. From your clients’ feedback and reviews, you can see where current services are falling short and make a plan for future improvements.  

Once you’ve narrowed down your list of potential services to add or enhance, use your ERP tools to determine feasibility. Do you have the right people in place to perform value-added operations? Will you need to improve other processes in order to fulfill new services? What is your expected ROI for these changes? ERP consists of robust financial management features and a wealth of data on business processes to help you make your decision.  

Size Up Your Competition

Value-added services give your distribution company a competitive advantage—unless they aren’t the right services. Let’s say you want to include a service often provided by similar companies. How can you set your offerings apart? Is there a way you can lower costs or make services more comprehensive? Perhaps you have an idea for a service that isn’t so common. Have other companies tried to provide this service but failed? Conduct research on your competition to see where you can differentiate your business. 

But you don’t want to focus all your attention externally. Utilize your ERP to drill into datasets and reports. With Epicor ERP 10, you can even access BI tools and analytics at your fingertips in user-friendly dashboards. Leverage these insights to discover strategies to enhance your services.  

Monitor Success and ROI

Regardless of which strategies you implement, measure the success of your new initiatives using ERP software. ERP automatically tracks data on your manufacturing and service operations, providing deep insight into your performance and ROI. With real-time metrics, you can easily pinpoint your triumphs and your downfalls, helping you continuously grow and improve your business. 

An eCommerce platform can also be useful for both monitoring and marketing value-added services. An online store will attract modern buyers and make your business more discoverable. Furthermore, when eCommerce and ERP functionality are joined in one system, orders and payments are automated, accelerating processes and capturing data in a single solution. That makes ROI simpler to track, giving you more information to measure the success of your services.  

Wrap Up

Like everything in your business, incorporating value-added services requires careful planning. The interconnected modules and tools in your ERP system deliver a complete view of your data and processes, helping you locate areas for improvement and manage operations. This wealth of insights and functionality is invaluable to enhancing your distribution company’s services.  

At Datix, we’ve provided software solutions to manufacturers and distributors for over 20 years. We’re an Epicor Platinum Partner, making us leading experts in ERP consulting. Our consultants do it all, performing implementations, integrations, customizations and upgrades for ERP, CRM and eCommerce platforms. A one-stop shop for enterprise software, you can count on us to optimize business performance. 

Learn more about how Epicor ERP can power value-added distribution success. Contact Datix today!  

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