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2026-03-25·Guide·7 min read

Build vs Buy ERP: Which Is Actually Cheaper?

The question every growing SME faces

At some point, spreadsheets stop working. You need a proper system to manage inventory, orders, invoicing, and reporting. The question is: do you buy an off-the-shelf ERP, or build one?

Option 1: Buy (SaaS ERP)

Popular options for SMEs:

PlatformStarting PriceWhat You Get
NetSuite$99/user/mo + $999 platformFull ERP suite
SAP Business One$94/user/moModular ERP
Odoo Enterprise$31/user/moOpen-source based
Zoho One$45/user/moSuite of 45+ apps

Pros:

  • Fast to deploy (weeks, not months)
  • Maintained and updated by the vendor
  • Established integrations

Cons:

  • Per-seat pricing scales poorly
  • Customization is limited or expensive
  • You don't own the data infrastructure
  • Vendor decides when features change or prices go up

Option 2: Build (Custom ERP)

A custom ERP built for your specific workflow.

Typical costs:

  • Simple (inventory + orders): $15,000–$25,000
  • Medium (+ invoicing, reporting): $25,000–$50,000
  • Full (multi-module, integrations): $50,000–$100,000

Pros:

  • One-time cost (no recurring per-seat fees)
  • Built around YOUR workflow, not a generic template
  • You own the code and data
  • Unlimited users at no extra cost

Cons:

  • Takes longer to launch (2-6 months)
  • You're responsible for maintenance
  • Needs a development partner you trust

The 3-year comparison

Let's say you have 20 users and need a medium-complexity ERP.

SaaS (NetSuite)Custom Build
Year 1$35,760$40,000 (build) + $2,400 (hosting)
Year 2$37,550 (+5%)$2,400 (hosting)
Year 3$39,425 (+5%)$2,400 (hosting)
3-Year Total$112,735$47,200
Savings-$65,535

And in year 4 and beyond, the gap only widens.

When building makes sense

Build when:

  • You have stable, well-understood processes
  • Your team is 10+ people (per-seat pricing hurts)
  • You need features no off-the-shelf tool offers
  • You want to own your data completely

When buying makes sense

Buy when:

  • You're very early stage and still figuring out your process
  • You need something running this week
  • Your team is under 5 people (per-seat costs are manageable)
  • You don't have a trusted development partner

The hybrid approach

Many of our clients start with a focused build covering just the modules they need most, then expand over time. Start with a custom CRM, keep your accounting in Xero, and add inventory management when you're ready.

You don't have to replace everything at once.