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Initially we had one native product database, several years ago an employee split it to multiple databases by product group (all same vendor, no duplicating MFG ID's).  I am familiar with the con's of this current setup but wondering what "best practice" would be and if there are any benefits before I work to convert it back to all one database.

I can't see a benefit in this, other than if we're talking x00,000s of products.

You can split things into folders, within one database, which sounds like the same sort of thing.