Overview of NetSuite Merchandise Hierarchy
How does this feature work? The Merchandise Hierarchy feature allows businesses to create a multi-level classification system for their products. This classification system categorizes inventory by different levels and nodes. For example, a retailer might organize a specific style of a jacket under categories like Jackets, Tops, Women’s Wear, Clothing, etc. Specifying these categories allows you to track and report on things like sales performance.
When setting up a merchandise hierarchy, there are three key components:
- Hierarchy Versions: You may create and manage different versions of a merchandise hierarchy over time.
- Hierarchy Levels: Hierarchy levels refer to the tiers within a hierarchy, representing different levels of product categorization.
In our example above, the levels might be Department (for Clothing, which is the highest category), Group (for Women’s Wear), Class (for Tops), and Silhouette (for Jackets). - Hierarchy Nodes: Hierarchy nodes are the exact specific categories or groupings within each level (for example, Clothing would be a node, Women’s Wear, etc.)
Setting Up Merchandise Hierarchy
If you plan to use the Merchandise Hierarchy, how would you get started? Here are the steps to enable and set up this feature.
1. Enable the Merchandise Hierarchy Feature
Before utilizing this feature, ensure it’s enabled in your NetSuite account:
- Navigate to Setup > Company > Enable Features.
- Under the Items & Inventory tab, locate and enable Merchandise Hierarchy.
2. Define Hierarchy Levels
Hierarchy levels represent the tiers of your product classification.
- Navigate to Setup > Merchandise Hierarchy > Levels > New.
- Enter a Name for the level (for example, Department, Category, Subcategory).
- Use the Insert Before dropdown to determine this level’s position in the hierarchy. When creating the lowest level (for example, “Silhouette” in the above sample), you will leave this field blank. Be sure to select the immediate child level for every other level you create.
- Save the level.
3. Create a Hierarchy Version
A hierarchy version serves as a container for your hierarchy levels and nodes.
- Go to Setup > Merchandise Hierarchy > Hierarchy Versions > New.
- Enter a Name and Description for the version.
- Set the Start Date and the End Date, if applicable.
- Under the tab Levels In This Version, select the levels you have previously created and wish to include in this version.
- Save the version.
4. Create Hierarchy Nodes
Nodes are the specific categories within each level where items will be assigned.
- Go to Setup > Merchandise Hierarchy > Nodes > New.
- Enter a Name and Description for the node.
- Assign the node to a Hierarchy Version, Hierarchy Level and, if applicable, a Parent Node.
- Save the node.
Note: Only leaf nodes (nodes without child nodes) can have items assigned to them. In our above example, “Jackets” is a leaf node.
Assigning Items to Hierarchy Nodes
Once your hierarchy is established, you can assign items to the appropriate leaf nodes. There are two ways you can do that: via the Hierarchy Manager or via the Item Record. Let’s take a look at both of these.
Assigning Items via Hierarchy Manager
- Navigate to Setup > Merchandise Hierarchy > Hierarchy Manager.
- Select the desired Hierarchy Version in the upper righthand corner.
- In the Hierarchy Tree Panel, choose the leaf node to which you want to assign items.
- In the Information Panel, click Assign Items.
- In the Assign Items window, select the items and click Add.
- Click Done to complete the assignment.
Assigning Items via Item Record
- Go to Lists > Accounting > Items and open the appropriate item in Edit mode.
- On the item record, locate the Merchandise Hierarchy tab.
- Select the checkbox next to the correct Hierarchy Version.
- Select the correct node for this item under the Hierarchy Node dropdown.
- Save the item record.
Benefits of Using Merchandise Hierarchy
Implementing the Merchandise Hierarchy feature can offer several key advantages for businesses, particularly those in retail, distribution, or other industries with a complex product catalog.
- Better Organization: Merchandise Hierarchy allows you to classify and view items in a structured, easy-to-navigate way.
- Smarter Reporting: This feature also generates reports based on hierarchy levels and nodes so you can identify trends and performance across product categories.
- Improved Searchability: When items are grouped by logical categories, searching for and using them becomes easier.
- Support for Multiple Versions: Using different hierarchy versions allows you to maintain and compare different hierarchy structures over time, supporting seasonal or strategic changes.
- Enhanced Analytics: You may use hierarchy-based attributes to drive deeper insights through NetSuite analytics or third-party BI tools.
Conclusion
NetSuite’s Merchandise Hierarchy feature gives you powerful tools to organize your product catalog in a way that reflects how your business actually thinks about and sells merchandise. If you’re ready to get started but want expert guidance on setting up a hierarchy tailored to your unique business model, the team at SuiteRep is here to help. Contact us to get the conversation started!