Dealer Management System (DMS) Features, Benefits, and Software

Managing multiple manufacturing plants with a network of dealers is not easy. With your sales agents, influencers, and end customers in the mix, there are just too many stakeholders. 

You need a dealer management system to monitor and optimize these operations end-to end.  

It’s a one-stop platform to enhance your efficiency and boost the overall business performance. 

With the right integrations, you can also ensure an amazing customer experience for your dealers/ distributors, influencers, and end customers. 

This article will answer all your questions about dealer management system (DMS) and help you choose the right software for your business. 

So, let’s get into it! 

What is a Dealer Management System (DMS)? 

Dealer Management System (DMS) is a software that enables manufacturers to efficiently manage and track inventory movement, across various dealers and distributors. It helps them smoothly organize their supply chain and business operations.  

A dealer management system is widely used across various manufacturing, automotive, and retail industries where there is a huge network of dealers to manage. It gives them a 360-degree view of their inventory, order management, and order fulfilment across all their dealers. 

Let’s take an example of how a dealer management system (DMS) aligns processes for a cement business. 

A cement manufacturing company has ten cement manufacturing plants and a network of over 3000 distributors across the country. 

The sheer volume makes it difficult to manage and keep up with orders and deliveries. Here’s where a dealer management system (DMS) comes into play.  

Distributors can place their orders directly on the system. Once the order is confirmed, the cement business will raise an invoice on the application. 

Through this application, the distributor also has real-time visibility into the status of his order till it reaches him. 

Now that you understand how a Dealer Management System (DMS) works, let’s go through the key features you should look for. 

Key Features of a Dealer Management System (DMS) 

Key Features of a Dealer Management System

1. Inventory Management 

Inventory management allows manufacturers to list out the stocks of all the products on the dealer management system. This ensures that the team doesn’t lose out on any sales opportunities. Real-time updates on stock levels can also help timely replenishment of products and decrease overproduction.  

2. Order Management  

A dealer management system helps manufacturing businesses build a user-friendly platform where dealers and distributors can directly place their orders.   

With the application, dealers can view the transaction history and modify their orders.  The system communicates the placement of orders, tracks the delivery schedule, reflects payment summaries, and can offer discounts to the dealers to promote a higher order frequency.  

3. Order Processing and Fulfilment 

Customers always appreciate transparency on their orders. So, once the order is placed, a DMS helps the dealer track its status. They can monitor their order from processing to shipping and delivery.  

Manufacturers can use the system to notify the dealers on the same through email, SMS or any other communication channels. 

4. Accounting and Payments 

You can enable secure transactions by integrating your dealer management system with various payment gateways. It calculates the total order amount and applies offers and taxes to generate invoices. 

Most systems also offer complete transparency into previous transactions and pending invoices.  

5. Reporting and Dashboards

To make data-driven solutions in the future, reports are crucial. You can analyze revenue reports to track your total revenue, understand what products sell more, and so much more. 

Sales performance reports, analytics related to order processing, and inventory levels are some of the reports to look for. This information can help you make informed decisions about how to optimize your sales and operations. 

Now that you are aware of the key attributes, let’s delve deeper into why you need to implement a dealer management system and how it can benefit your business. 

5 Benefits of Dealer Management System (DMS)  

1. Enhanced Operational Efficiency 

A dealer management system (DMS) can help you reduce manual tasks and paperwork. Workflow automation eliminates lengthy processes such as keeping track of stocks, managing duplicate data entries, etc. It also improves communication between various departments for higher employee productivity. 

Order processing is streamlined since all the data and processes are on a single system. By improving your supply chain operations on a dealer management system, you can reduce the turnaround time and cater to queries faster.  

2. Improved Dealer Collaboration 

Dealer management system enables manufacturers to seamlessly share information and communicate with their dealers. Through DMS they have complete visibility into every dealer/distributor’s order and target. 

This brings down the chances of miscommunication and helps you build a better relationship with your distributors. 

Dealers can also share insights on customers preferences, product performances, etc. which helps manufacturers identify areas of improvement. 

3. Data-Driven Decision Making 

Businesses need to constantly improve their strategies and make agile adjustments to stay ahead of the curve. But you can’t do that if reports take weeks to generate and the decision makers don’t have access to real-time performance tracking.  

A dealer management system generates comprehensive reports to help you identify underperforming areas in your operations and improve sales efficiency. These reports include supply chain key performance indicators (KPIs), revenue reports, and dashboards to monitor sales performance.  

4. Enhanced Customer Satisfaction 

Timely and accurate order fulfilment results in satisfied customers. Having a view of when the order will reach their dealership helps them plan better. Dealer management systems that come with mobile applications are an added bonus because they offer dealers with the ease and ability to place orders whenever and wherever they want.  

Constant communication and updates build trust with the dealers. Moreover, offering an avenue to share feedback, file returns, and enhanced support provides a satisfying customer experience

5. Decreases Inventory Costs  

A dealer management system optimizes inventory, decreasing the chances of over-stocked goods. This eliminates excessive carrying costs and unnecessary expenses. When you have visibility into future demand, you can better manage your inventory and reduce inventory holding costs. 

With an automated DMS, there are minimal chances of errors and operational bottlenecks. It streamlines supply chain operations and drastically reduces the chances of error-based expenditures. 

Although there is an initial expense involved in making DMS a part of your operations, in the long run it’s a valuable investment. 

You need to have the right dealer management system (DMS) to ensure you can leverage all these benefits. Here are a few steps that can help you pick the ideal solution for your organization. 

4 Steps to Choose the Right Dealer Management System (DMS) 

1. Analyse your Current Business Needs 

The first thing is to identify your business goals and objectives related to distribution. Jot down our current operation ecosystem and find out what’s lacking.  

Then, list down your specific requirements to make your existing process more efficient. Such as order management, inventory tracking, reporting, integration with existing systems, and more. 

Determine if the DMS can be customized to match your specific business needs. Generic solutions might not address all your requirements, so you need a tool that is customisable and can integrate with your existing software systems such as ERP, CRM, etc. Seamless integration minimizes data entry errors and enhances overall efficiency. 

2. Decide on a Budget 

Often, the most expensive solution is not the best. You need to understand the pricing structure of the dealer management system. Once all the relevant stakeholders have analysed the features offered, and shortlisted the most important ones, you need to tally the expenses with your budget.    

Before finalizing a tool, calculate the potential return on investment (ROI) the dealer management system (DMS) can bring in terms of improved efficiency, reduced errors, and increased sales.  

3. Choose a Scalable and Future-proof Solution 

Ensure that the DMS can scale as your business grows. It should accommodate your future expansion plans to keep up with the demands as your distribution networks grow.  

Check if the DMS is flexible enough to adapt to your unique processes and workflows while improving their efficiency.  

4. Evaluate Key Features 

First, research different Dealer Management System (DMS) options available in the market. Look for systems that are specifically designed for your industry and the size of your business. 

Then, create a shortlist of potential DMS providers based on their features, reputation, and user reviews. 

The DMS should have an intuitive and user-friendly interface. A complex system could lead to training challenges and reduced productivity. 

Data security and privacy is another aspect that is significant. Ensure the DMS employs strong encryption, secures access controls, and follows industry standards for data privacy. 

To help you with it, I have compiled a list of best dealer management systems (DMs) in the market. 

Top 4 Dealer Management Systems in 2023 

1. TallyPrime 

TallyPrime is complete business management software solution that optimizes all business processes from accounting, invoicing to managing inventory. It is one of the most popular dealer management solutions for manufacturers. 


  1. Inventory Management: Get updates on your current stock level. Also, keep track of the manufacturing and expiry date of your goods to improve inventory batch management. 
  1. Easy to Use: Its user-friendly interface makes it accessible to multiple users with varying levels of software expertise. 
  1. Accounting: Easily generate multiple types of invoices customized to your business needs.  It also supports various currencies which lets you effortlessly accept payments and create bills across geos.  


  1. Poor Integrations: Limited integration with third-party tools and software as compared to its competitors in the market. 
  1. No Mobile Application:  One of the biggest drawbacks of TallyPrime is that it is only available on PC.  

Rating: 4.4/5 (via G2)  


The pricing for TallyPrime starts from 600 INR/month for a single-user edition and goes up to a one-time payment of 54,000 INR for the lifetime license of the multi-user edition. 

2. Infor LN 

Infor LN is a dealer management software specifically designed for the manufacturing industry. It is an end-to-end suite that helps with logistics, accounting, comprehensive reporting, and more. 


  1. Purchase Order Management: You can easily track your order, automate your supplier plant and generate invoices and receipts for the order. 
  1. Analytics and Reporting: Infor LN generates detailed reports for your current KPIs, which can be used to get actionable insights to improve operations 
  1. Mobile Access: The system is easily accessible on mobile, which allows for flexibility in tracking finances and inventory on the go. 


  1. Steep Learning Curve:  The system is quite vast and complex to use which can drag out the implementation and adoption process. 
  1. Slow: The system is quite old-fashioned and with one user session visible at a time, this makes it harder to multitask and delays the overall process.  


You’ll have to get in touch with the team for a custom quote.  

Rating: 4/5 (via G2)  

3. Marg ERP 

Marg ERP is designed to help manufacturing businesses of various sizes with their business operations. It offers a range of modules like inventory tracking, distribution, and purchase management. 


  1. Sales Tracking: Marg ERP can help you track your sales orders and stock transfers. It can streamline your distribution management and improve customer service. 
  1. Run Discounts – Categorize your dealers and allow to apply discounts and schemes based on previous purchases. 
  1. Data Security: With auto backup and encryption software, Marg ERP will keep your data safe and secure. 


  1. Scalability: While MARG ERP is suitable for small and medium-sized enterprises (SMEs), it may have limitations in terms of scalability for very large businesses with complex operations. 
  1. Poor Customer Support: Marg ERP has poor after-sales and customer service. The software is a bit complex, and not having training support can be a challenge. 


The pricing for Marg ERP has three editions starting from 8991 INR/year for the basic edition to 25,200 INR/year for the gold edition. 

Rating: 4.3/5 (via G2

4. Vyapar

Vyapar is a cloud-based software designed to help businesses manage their financial transactions, invoices, inventory and other aspects of business operations. 


  1. Order Tracking: Users can track their product inventory, manage stock levels, and receive low-stock alerts to ensure efficient stock control. 
  1. Payment Tracking: It allows you to track payments from customers and monitor outstanding invoices. 
  1. Customer and Vendor Management: Users can maintain records of their customers and vendors to streamline communication and manage business relationships. 


  1. Scalability:  Vyapar is specifically designed for small and medium enterprises and might not be suitable for manufacturers who have a roadmap to becoming a large enterprise in the near future. 
  1. Limited Integrations: Vyapar has limitations in integrations especially with payment platforms which could be a hindrance in customizability. 


Vyapar offers two plans, silver and golden starting from 3399 INR/year with both mobile and desktop access. 

Rating: 4.6/5 (via G2

Now that you know what software you can go for, it is important to acknowledge some challenges that come with having a huge dealer network spread across the country. I will also suggest ways to tackle them. 

Challenges to Look Out for 

Manufacturing businesses have a unique set of difficultie out of s while implementing a new system: 

  • Resistance to New Technology: The huge network of dealers also includes hard-to-reach rural areas. They might not be tech-savvy to use software to place orders online.  
  • Averse to Adaptability: Manufacturers have designated sales teams across their distribution chain. These sales users have built long-term relationships with the dealers. The dealers usually prefer to place orders with them rather than on a new system. Moreover, the field sales team also has monthly targets that they have to reach. 
  • Other Stakeholders: There are also many stakeholders, like influencers, that bring in a lot of orders. A dealer management system isn’t enough to incentivize these stakeholders. 

The biggest challenge here is the gap of communication between your sales teams, the dealers/ distributors, and other stakeholders. The solution to establish end-to-end distribution journey is integrating your dealer management system with a manufacturing CRM, such as LeadSquared.  

Integrating Dealer Management System (DMS) with CRM  

The following are a few features of a CRM, that when integrated with a dealer management system can completely transform manufacturing businesses.  

1. Field Force Automation for Sales Team 

The sales team might have to travel to remote areas to take orders from the dealers. A CRM with Field force automation proves to be very useful. It can help create route plans for your sales team for maximize productivity. Moreover, these applications work offline too. 

This enables your sales team to onboard more dealers and orders placed on the DMS are visible to your sales team. The sales agents will also have full visibility into the order status, which they convey to the dealers for complete transparency.  

Your sales users can have a complete view of all the dealers they are handling to track their performance. They can also help by nudging the underperforming dealers to fulfill their targets.  

Field force reports help managers track the performance of your all on-field salespeople.  This will give you a 360-degree view of all your operations, even in the remotest areas. 

2. Marketing Automation to Engage Dealers 

To encourage and engage your dealer network, you can also make use of a CRM’s marketing automation software. You can add the list of your dealer network on the software and share promotional material, schemes, and discounts to encourage them to complete their targets. 

These promotions and be automated via multiple channels, including WhatsApp, emails, phone calls, and SMS.  

3. Referral Chatbot for Influencers 

Influencers are another stakeholder that bring in a lot of customers for the dealers from the market. They are usually someone in the market who can sway purchasing decisions of the end customers. 

For example, in a building material manufacturing business, it can be the building contractors. They can make suggestions and influence the owner on what materials to buy for their home project. 

To incentivize and cater to these influencers to recommend your products, you can use a WhatsApp chatbot. 

While purchasing the product, they can add their name, phone number, quantity of product bought etc on the WhatsApp chat. Then, they can enter the unique code of the dealer/ retailer.  

Through this code, the dealer will receive an OTP to confirm the influencer’s purchase. Once confirmed, the influencer will receive reward points based on the quantity purchased. These points can be later redeemed by them for incentives. 

Ultimately, this integrated approach can help companies not only have smoother operations but also foster stronger relationships with all their stakeholders. 

To understand more about how you can leverage a CRM integration to improve your sales efficiency, get in touch with our team. 

Final Takeaways

In conclusion, managing a network of manufacturing plants, dealers, and stakeholders is complex. A Dealer Management System (DMS) streamlines operations, providing a 360-degree view of inventory, order processing, and more.  

It can help you efficiently collaborate, make data-driven decisions, improve customer satisfaction, while saving costs.  

Choosing the right DMS is essential but also comes with challenges.  Integrating your DMS with a CRM like LeadSquared  equips your business with solutions like field force automation, marketing automation, and referral chatbots, which can help you improve business outcomes.   

A well-implemented DMS simplifies complexity and drives success across the manufacturing ecosystem. 


1. What is the difference between a Dealer Management System (DMS) and a Customer Relationship Management (CRM) software? 

A dealer management system manages internal manufacturing operations like inventory, sales, and servicing. On the other hand, CRM focuses on external customer interactions to build and maintain relationships, streamline sales and marketing, and improve service. A combination of DMS and CRM enhances customer relationships and optimizes manufacturing operations. 

2. Can a dealer management system improve overall profitability? 

Yes, a well-implemented DMS with proper integrations can result in:  
1. Improved efficiency 
2. Better customer service 
3. Streamlined processes 
4. Reduced operational costs 
5. Enhanced sales performance 

3. Can a dealer management system be customized to match specific requirements?  

Many dealer management systems offer customization options to tailor the software to the unique needs of your business. This can include workflow adjustments and additional modules to meet specific operational demands.  

Want to see LeadSquared in action?