If you’re managing purchasing and inventory in Dynamics 365 Business Central, there are three features that can make a big difference in how you source and buy items: Vendor Catalogs, Item Substitutions, and Vendor Prices. Each of these helps you work smarter by giving you more flexibility, visibility, and control over what you buy and how you buy it.
What’s the difference?
Vendor Catalog is where you can see all the items a vendor offers—even if you don’t stock them regularly. Maybe you normally only purchase 100 of the 500 items they offer. Instead of cluttering up your item list, the rest stay in the vendor catalogue until you need them. When you’re ready, you can convert a catalogue item into an actual item card and start using it just like any other stocked item. to set up these items https://learn.microsoft.com/dynamics365/business-central/inventory-how-work-nonstock-items?WT.mc_id=MVP_348604
Item Substitutions come in handy when something you normally buy or sell isn’t available. You can set up equivalents or alternatives and let Business Central suggest a substitute when an item is out of stock or discontinued. For instance, if item A123 is unavailable, the system can recommend item A124 if it’s marked as a substitute. It’s a great way to keep sales flowing or avoid delays in production.
***Use Copilot to speed up the process of finding similar items for substitutions. https://learn.microsoft.com/en-us/dynamics365/business-central/suggest-item-substitutions-copilot?WT.mc_id=MVP_348604
Vendor Prices help you manage the actual cost you pay—especially when pricing depends on quantity, timing, or vendor-specific agreements. With vendor price records in place, Business Central knows when to apply the right cost. Say you’ve negotiated that you’ll pay $4.00 each when you buy 100 or more of a certain item—this will be applied automatically on the purchase order when that condition is met, saving you time and reducing errors. To learn more https://learn.microsoft.com/dynamics365/business-central/across-prices-and-discounts?tabs=current-experience&WT.mc_id=MVP_348604
***Don’t forget to keep in mind that the vendor price may not be landed price. With today’s tariff climate and the challenges it presents, just knowing the vendor’s item price (your direct cost) might not be enough information for use in determining your selling price or the true contribution to the cost of production.
So while these tools may seem small on their own, together they give you a much more responsive and efficient purchasing process. Vendor Catalogs help you see more options. Substitutions give you a backup plan. Vendor Prices ensure you get the deal you negotiated.
Cheat Sheet
| Feature | Purpose | Key Use Case | Example |
|---|---|---|---|
| Vendor Catalog | Maintain a list of items a vendor can supply | Access non-stocked vendor items and convert when needed | Vendor offers 500 items, you only stock 100 |
| Item Substitutions | Define alternatives or equivalent items | Fulfill orders when preferred item is unavailable | If A123 is out of stock, suggest A124 instead |
| Vendor Prices | Store negotiated prices per vendor/item | Apply correct vendor-specific price during purchasing | 100+ units of item from Vendor X = $4.00 each |
Why do we need them all?
- Vendor Catalog helps expand purchasing options without cluttering your inventory.
- Item Substitutions keep orders moving and reduce fulfillment delays.
- Vendor Prices ensure you don’t miss out on negotiated savings.
These features support smarter procurement and better inventory control in Dynamics 365 Business Central.
