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Define SAP Merchandise Distribution

This SAP SD (Sales and Distribution) tutorial, explains the step-by-step procedure to define Merchandise Distribution in the SAP system with the proper screenshots.

What is Merchandise Distribution in SAP?

A customer hierarchy in SAP SD is a flexible structure consisting of the level of customers in the SAp system. Every customer with the exception of the uppermost (higher) customer refers to another customer at a higher level in the hierarchy. The primary purpose of Customer Hierarchy is Pricing and Reporting.

How to Define Merchandise Distribution in SAP?

Please follow the steps below to define the merchandise distribution in your SAP system:

Enter t-code SPRO in the SAP Command Field and then press Enter button to Execute.


Now on Customizing: Execute Project screen click the SAP Reference IMG button to proceed.

Reference IMG

Next, navigate to the following SAP IMG path:

SPRO > SAP Reference IMG > Investment Management >  Sales and Distribution > Master Data > Business Partners > Customers > Customer Hierarhy > Define Hierarchy Types

IMG path

Next on the Change View "Customer Hierarchy Types": Overview screen, you will see the previously defined merchandise distribution on your SAP system.

Previous List

Next, click the New Entries button to define a new Merchandise Distribution in your SAP system.

New Enteries

Now, provide the following details for the new Merchandise Distribution as shown in the image below:

  • CustHtype: Enter a single character that defines the new customer hierarchy.
  • Name: Enter the short name.
  • PartFunct.: Choose the Partner Function for the new customer hierarchy.


Once all the details are entered click the Save button to save the details of the new merchandise distribution.


Next, select your Customization Request id and press Enter to proceed.


A message Data was saved will be displayed on the bottom of your screen.

Data was saved

You have successfully created a new Merchandise Distribution in your SAP system.

New Customer Hierarchy