What an ERP Should Actually Do for Your DTC Brand

If you ask ten different founders what an ERP is, you’ll get ten different answers.

The term has become so diluted that even the giants can’t agree. Oracle recently published a blog post arguing that Workday, a $65 billion company, isn’t actually an ERP. If the biggest software companies in the world are fighting over the definition, it’s no wonder DTC operators feel lost.

The confusion stems from a simple fact: the acronym "ERP" is a relic of 1990s manufacturing. It was built for factories that owned every part of their supply chain, from raw materials to the trucks leaving the dock.

But, what you’re dealing with is different. You're dealing with real orders, real inventory, and real money moving through multiple channels. You need numbers that actually match what's happening, not some textbook definition that made sense 30 years ago.

So let’s define what an ERP should be purely from a DTC brand’s perspective.

The Three Resources That Matter

ERPs are ultimately sources of truth. But the "truth" each business needs to track, depends entirely on the industry they operate in. Hospitals track patients; law firms track billable hours.

And for DTC brands, the truth revolves around three resources:

1. Inventory

You need to manage your product catalog and send accurate availability to every sales channel. This means knowing what's physically in each warehouse, what's available to commit for future orders, and what's pre-sold. 

Get this wrong, and you're either overselling (destroying customer trust) or letting inventory sit in warehouses (destroying cash flow).

2. Orders

You're pulling orders from Shopify, Amazon, wholesale partners, retail partners like Costco and Nordstrom, and maybe physical stores. Each channel speaks a different language, has different data formats, and different fulfillment SLAs. Managing orders means unifying this chaos into a single operational stream.

Get this wrong, and your team is stuck manually copy-pasting order data between systems and jumping between 3PL WMS screens, leading to shipping errors, missed wholesale delivery windows, and chargebacks that eat your margin.

3. Cost of Goods Sold

You need to know what you actually paid for your inventory, not just the PO price, but the landed cost, including freight, duties, insurance, and tariffs. Then you need to understand your unit economics after returns, shipping, and channel fees.

Get this wrong, and you are flying blind on profitability, potentially scaling ad spend on products that look profitable on Shopify but are actually losing money once you factor in the true landed costs and return rates.

What About Everything Else?

What about HR and payroll? You use Gusto or Rippling.

Think about why. You didn't settle for the payroll module bundled inside your accounting software. You chose a specialized platform because you realized that a finance tool isn't automatically good at people management.

The same logic applies here.

What about Fixed Assets? It’s a nice-to-have, certainly. But it shouldn't be the deciding factor. Prioritizing a Fixed Asset module at the expense of best-in-class Order and Inventory management is a bad trade for a modern merchant. You can manage depreciation in a spreadsheet if you have to; you cannot manage high-volume fulfillment in one.

But if you don't have proper Order Management? You're spending hours exporting and massaging spreadsheets just to know your revenue. For an 8 or 9-figure brand with millions of transactions, spreadsheets just can't handle the volume. Anyone who’s done it knows that these sheets either crash, freeze, or take hours to recalculate.

This is the complexity that matters.

When You Actually Need an ERP

It’s rarely about a specific revenue number.

I’ve seen complex $1 million brands doing in-house manufacturing that desperately need an ERP (but cannot afford one). I’ve also seen simple $50 million brands with one 3PL and 5 SKUs that run perfectly fine on Shopify and spreadsheets.

For DTC brands, the cracks start showing when the cost of chaos exceeds the cost of centralization.

This usually comes from three types of complexity:

1. SKU proliferation: Your t-shirt line expands to 5 colors and 6 sizes. Then hoodies. Then accessories. Suddenly, a simple catalog is 500 SKUs, and Excel formulas start breaking. Apparel and footwear brands hit this wall fastest because of sizing.

See related: ERP Systems for Shopify Apparel Brands: Operational Guide

2. Location expansion: You add a second warehouse on the East Coast. Then, a UK fulfillment center. Then a retail pop-up. Now, "Inventory Count" isn't one number; it's a matrix of numbers across five locations.
3. Channel growth: You expand from Shopify to Amazon. Then you land a deal with Costco. Then you open a Faire account. Each channel acts as a separate data silo, and manual reconciliation becomes a full-time job.

You know you need an ERP when you have legitimate problems to solve. You’ll know it’s real when you find:

• Your team spends more hours cleaning data than analyzing it.
• You can’t answer "What is our true inventory position?" without logging into three different systems.
• Month-end close takes 20 days because you’re stitching together reports from Shopify, Amazon, your 3PL, and your bank.
• You’re making million-dollar inventory purchasing decisions based on a spreadsheet that hasn't been updated in 48 hours.

The "Light ERP" Illusion

When brands hit these pain points, they often reach for "Light ERPs." But this category is a misnomer. There are two types of systems hiding behind the label, and neither delivers what the name implies.

Type 1: The Rebranded Point Solution

Some "light ERPs" are inventory or order management tools that rebranded themselves. They solve one problem well, but now you have another system to integrate. Your data still lives in five places. You've added complexity, not removed it.

The pitch is "start simple, expand later." The reality is you've committed to a foundation that wasn't designed to expand. When you need landed cost tracking or multi-location inventory allocation, you're back to shopping for another tool and another integration - leaving you with the exact chaos you were trying to escape.

Type 2: The Analytics Middleman

Other tools are essentially glorified dashboards. They pull order data from Shopify, inventory counts from your 3PL, and push journal entries to QuickBooks. They show you what's happening across your business, which feels like progress.

The Trap: Visibility without control prevents improvement. When something goes wrong, you can't fix it from the dashboard.

• A customer needs their order rerouted? Log into the 3PL.
• Inventory count is off? Email > Spreadsheets > QuickBooks.
• Need to adjust a cost allocation? Open the spreadsheet, then update QuickBooks.

You're watching problems happen in real-time, but still opening three other systems to actually fix them. You end up paying for a really expensive way to see what's broken.

Why "Light" Doesn't Mean "Simpler"

The appeal of a "light" ERP is avoiding the complexity of traditional systems. But the complexity of a generic ERP comes from customizing it for your industry and integrating it with commerce tools. A "light" version doesn't solve this. It just gives you less functionality while leaving the integration problem intact.

You don't need a lighter ERP. You need one built for commerce operations from the start.

The Real Source of ERP Complexity

Traditional ERPs aren't complex because the software is hard. They’re complex because they are generic. You are forced to take a system built for everyone and pay consultants to make it work for you.

Generic ERPs charge you twice: once for the software license, and again for the consultants to fix it. NetSuite implementations routinely cost $150k–$500k and take 6–12 months. That spend isn’t for innovation; it’s just to make a generic tool understand basic commerce workflows.

NetSuite is a capable system, but DTC isn't its priority. Its core customer is a B2B distributor or a service company. Why would NetSuite build a native Shopify integration when 90% of their user base doesn't use Shopify? They won't. So you pay for third-party connectors and custom workflows just to import an order.

The sales pitch is "flexibility"—the idea that the system can do anything. But you are paying for optionality you'll never use while fighting for functionality you need every day. A system designed to handle construction, healthcare, and commerce will never handle commerce as well as a system dedicated to it.

The solution isn't to buy a "light" version. It's to buy a native version.

This shift has already happened elsewhere. Restaurants run on Toast because it natively handles table turns and kitchen firing times. Construction firms run on Procore because it speaks the language of blueprints and change orders. In each case, operators chose the system that worked out of the box over the one that required a consulting army to replicate basic industry workflows.

"Native" isn't marketing fluff. It means the data model respects your reality. A native ERP doesn't just bolt a "channel" field onto a generic order table. It understands that a Costco PO and a Shopify order have fundamentally different logic, compliance, and margins. That understanding is either in the DNA of the software, or it isn't. You can't consult your way there.

The Path Forward

Traditional ERPs aren't complex because the concept is hard; they are complex because they are generic. You have to fight them to make them understand that a "Sales Order" on Shopify is different from a "Wholesale Draft" on Faire.

The way to avoid this complexity isn't to buy a "light" tool that does less. It's to buy a specialized tool that does more of what actually matters to you, without the headaches of legacy software.

What DTC brands need are systems built from the ground up for commerce operations. Systems that natively understand:

• Bundles and Kits: That a "Gift Set" isn't a physical item, but a logical collection of components.
• Pre-orders: That selling inventory you don't physically have yet is a strategy, not an error.
• Landed Costs: That the profitability of a SKU changes based on which container it arrived in.
• Financial Reconciliation: That an order isn't truly closed until the cash hits the bank and the fees are accounted for.

If you are a construction firm, you should buy Procore. If you run a restaurant, you should buy Toast.

Of course we’re a bit biased, but if you are a modern DTC brand, that system is Fulfil.

We didn't build Fulfil for everyone. 

If you want to hire consultants to build your own workflows, buy a generic ERP. If you want to keep stitching together spreadsheets for the full picture, buy a "light" ERP.

But if you want a system that natively understands your business, without the need for an army of consultants, Fulfil was built for you.