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Merchanting's Golden Ratio; How the ability to be different really sets your business apart

Merchanting's golden ratio

We often say every business is unique – and it’s true. We work with a lot of merchants, and in almost every case, they say to us, “Our business is really simple.” And yet, no two are identical.

Every client uses slightly different methods and processes, so the way they use their order and stock management system always differs slightly. And it’s those little differences that make every merchant - and their software requirements - unique.

However, there will always be shared functions and experiences. The bulk of functions required in any retail or merchant business will always be similar to most others, and there will always be functions within each industry sector that share similarities. But with every merchant we’ve ever worked with, there’s that little bit of top that sets them apart from the competition, and it’s that section that needs to be allowed to shine.

The golden ratio

We estimate the approximate ratio for this split of functionality to be around 70:20:10.

% on a balloon

That is, roughly 70% of any merchant’s business will need the same core functionality as any other merchant business. Around 20% will vary depending on industry sector, whether you specialise in hardwood or aggregates, plumbing supplies or industrial scale seed supply, and so on. And the 10% on the top is what makes your business different.

The majority of businesses which trade construction materials will require the basic functionality of stock management, quotation, PO raising, sales orders and so on. But the specifics will vary depending on the type of business; if you’re a timber merchant, you might need more flexibility on lengths or volume metrics, while a stone or steel merchant might require more sophisticated weight options. So there’s a need for industry sector specific functionality on top of the basics of trading and stock management.

The final part is where a software system can really add value, with particular processes and features to allow your business to operate and flourish in the best ways it can. That customisation really sets the system apart from off the shelf solutions, but because it’s built on a proven foundation of fundamental components, you’re not paying for (or waiting for!) a fully bespoke system either.

Why "off-the-shelf" won't cut it for merchants

Stack of logs

When starting out, a lot of merchants opt for a simple, off the shelf solution for trading, especially if they're launching with an eCommerce option. Perhaps that's an extension of your accounts package, like Sage, Xero or Quickbooks, or perhaps it's an app-based selling tool like Shopify or similar.

The problem is, when you trade measured product in a complex market, with differentiation between trade and domestic customers, and a highly tailored logistics requirement, "off the shelf" solutions that claim to be the one-stop-shop of trading can rarely offer the granular functionality that merchants need for their particular line of work.

Non-industry specific order and stock management software won't give the control and visibility that the best sector-specific business systems will offer - where you can trade, stock and optmise your stock by length, weight or volume, deal with single produts, loose stock and packs, or incorporate milling and finishing instructions and complex certification standards along the way. That's where a lot of the value lies in industry-specific ERP software like Merchanter.

The crucial 10%

The huge value of an industry-specific system is in the detail. It’s the functions and features built specifically for the types of products you trade – whether that’s insightful reporting on products stocked by weight or length, the ability to add complex milling or finishing instructions to a PO and manage forward contracting with ease, it’s the complex functions relating to your niche area that really add the most value.

So if 20% of that added value is in industry-wide materials, the 10% of features and functions needed only by your business really is what can set a system apart, and in turn, set your business apart from its competition. It’s in that customisation that you can tweak things to work the way you want them, build in the reporting and analytics capability that you want, and set up the integrations you require to link seamlessly with PIMs, eCommerce, finance packages or any other platforms and packages you want.

Fully “bespoke” systems carry a prohibitively hefty price tag, and we aim to make systems which are accessible to any size and scale of merchant. We can of course incorporate more customisation for clients who require it and are happy to invest more in that unique proposition, but we aim to offer the right balance for everyone, allowing smaller independents to compete with major national chains in terms of the tools they’re using and the competitive advantages that great software can add.

Benefit from the best of both

By structuring our software against this same approximate ratio, we believe merchants benefit from the best of both worlds: the tried and trusted foundation of a system used day in, day out by merchants all over the country, combined with the tailoring and customisation that allows the things which set your business apart to shine.

If you’d like to try the system for yourself to see how easy and intuitive it is to use, please register here for login details.


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