Well, that escalated quickly. 

eProcurement is an umbrella term for digital buying that lives in the Enterprise Resource Planning (ERP) or EPI systems on any eCommerce platform.

eProcurement is also known as electronic procurement or supplier exchange. Put another way, it is the purchase and sale of supplies, equipment, products, and services through an online system.

The technology is designed to unify and automate interactions between an organization, customers, and other partners to improve the speed and efficiency of procurement practices. This ultimately reduces the cost of doing business while boosting efficiency and effectiveness. 

Punchout is a tool that connects your catalog with your partners’ procurement tools. Your partners’ employees can research and buy your products from within their ERP or eProcurement system, seeing their specific contractual terms, conditions, prices, shipping costs, etc. The catalog they view is personalized and transfers purchase orders to their own internal procurement systems.  

Often this looks like a button within their system that takes them toa “Punchout Catalog” (or a similar term). Once there, they can view and select the products they want to purchase from the hosted catalog, add them to the cart, and submit an order for review and approval through the procurement system. 

As an electronic catalog, Punchout is a key part of the process of digitalizing commerce transactions between companies and their suppliers.

A January 2022 report from digitalcommerce360.com reports that eProcurement sales continue to grow: 

[In 2021], e-procurement sales volume grew to $934.2 billion, up 17% from $798.4 billion in 2020. And one channel they are using much more of these days is e-procurement and punchout, which enables businesses to purchase supplies directly from a supplier’s ecommerce website or B2B marketplace without leaving their own e-procurement application. In 2021, e-procurement once more emerged as among the fastest growing digital commerce sales channels. In fact, in 2022 e-procurement for the first time will top $1 trillion in annual sales, based on a projection from Digital Commerce 360.

Many very large organizations or enterprises require eProcurement and Punchout. And even if your current customers don’t require it, it can present a huge opportunity for capturing revenue online. Implemented well, eProcurement and Punchout reduces the friction and roadblocks from purchasing your goods and services, ultimately boosting sales and increasing revenue. Additionally, as more and more enterprises invest in digitalization, eProcurement and Punchout it is quickly becoming the way of the future.

Download the White Paper Five Problems Tech Leaders in Manufacturing Face (and How to Solve Them)

What is a Punchout Catalog?

And what does good Punchout look like? Punchout is an opportunity to build a digital experience that is customized for your users. It helps your customers’ buyers order more quickly and easily by managing catalog and pricing:

  • It shows only approved products.
  • It displays custom pricing, bulk discounts, and any customer-specific pricing rules.
  • It shows inventory and availability in real-time.

This is an opportunity to design the digital experience with the customer experience in mind, seeing how your site will appear in their ERP or eProcurement system, and design for those parameters.

Other considerations include:

  • Accessible design to expand access (and avoid lawsuits)
  • Clean, clear user design that makes your site easy and intuitive to interact with
  • Robust search with detailed filtering and facets pulled from your product data
  • Research capabilities
  • Detailed product information
  • Additional content/information, like product PDFs, detailed product specifications, videos
  • Product comparisons

Assessing the Need for Punchout

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Risks

Customers may require Punchout or competitors are offering a robust Punchout experience.
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Challenges for Change

Understanding and enabling a new experience, managing and keeping product data clean, delivering custom catalogs and pricing at scale.
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Opportunities

Ability to capture digital revenue faster and easier, and create competitive purchasing experiences.
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Considerations

  • How will you create custom Punchout Catalogs for customers?
  • Where do you start in terms of the key customers, the at-risk customers, and the high-need customers?
  • How can you design and optimize the Punchout digital experience for easy adoption, usage, and to drive revenue?
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Key Performance Indicators (KPIs)

  • Partners: Punchout adoption rate, usage rate, conversion rate, average order value (AOV), customer lifetime value (CLV), time on site, and retention rate.

Assessing the Need for D2C

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Risks

Competitors are gaining market share with their own D2C channels, losing resellers and distributors, and the supply chain makes distributed selling more expensive and difficult.
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Challenges for Change

Channel conflict may occur between existing partners, with organizational hesitance to expand the business model.
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Opportunities

Consider new, high-margin revenue channels, ownership of the customer journey, marketing, and the ability to capture first-party product insights and data.
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Considerations

  • What is your business strategy for D2C? Who is your target market? Where are they? How are they currently being served (or not) by your existing channels?
  • How can you make a strategic plan for resellers/distributors (e.g. pricing, specific promotions, owned product categories) to protect the relationship?
  • What are the digital experiences you want to create for customers? How will you personalize, customize, and tailor the experience to their needs?
  • How will you build your best tech stack, meeting business goals and digital experience needs?
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Key Performance Indicators (KPIs)

  • Customers: conversion rates, average order values (AOV), customer lifetime values (CLV), time on site, retention rates, and product margins.
Why Manufacturers Need A D2C Channel

About the Author

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Sarah Falcon

VP, Marketing Global

Sarah is a nimble and creative marketing leader with 15 years of experience in a mix of agencies, B2B, and B2C enterprises. She brings a background in building and driving impactful marketing practices and processes for growing businesses. Sarah has expertise in brand, content marketing, lead generation, and marketing operations. She’s a co-author of the 2019 book on B2B eCommerce Digital Branch Secrets: eCommerce Playbook for Distributors.

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