Today we're delving into the under-explored, yet critical world of PunchOut and its role in modern B2B eCommerce. A common narrative is that B2B companies should emulate B2C experiences – the 'Amazon-like' shopping journey. However, the reality of B2B procurement is far more complex and nuanced.

That's where PunchOut comes into play, promising a superior digital experience while capturing the intricacies of B2B procurement, and opening the door for vendors to provide unique SKUs, bespoke pricing, and create a shopping experience specific to a customer's business unit or location.

Sure, building a PunchOut catalog might seem like a daunting task, involving product data, tailored buying experiences, upselling, and cross-selling. But it sets you apart from the sea of vendors listed on a static catalog, creating a value proposition beyond just price comparison. It also reduces the dependency on direct salesperson involvement, fosters customer loyalty, and facilitates more efficient, exploratory purchasing experiences.

Static catalogs might seem like the easier route, but consider the potential of PunchOut as a powerful tool to elevate B2B procurement experiences and vendor-customer relationships.

Let's delve deeper and discover why PunchOut is the future of modern B2B distribution.


All right, folks. 

Today we're gonna talk about why PunchOut is critical in modern B2B distribution. 

I think this is an important topic because there's always this conflation that B2B organizations need to really step up their game and be like a B2C retailer and build their commerce platform exactly like an Amazon-experience, or exactly like some experience that any home user around digital commerce is going to be leveraging, like Wayfair or maybe, or when in reality, B2B procurement is extremely different. 

Now, that's not to say that you shouldn't have a really good digital experience.

In fact, that's the entire point of PunchOut. And that's the difference between maybe some legacy ways that B2B procurement used to occur. 

But the point is, PunchOut embeds some of that nuance of B2B procurement that is critical and so important to this model. 

So let's go through why PunchOut is important. 

And I get that within the industry, sometimes there's actually some cynicism around PunchOut or the efficacy of why we would want to invest in something like PunchOut when we have basic static catalogs already available on these third-party procurement applications, such as Ariba or Yardi or OpsTechnology. 

So before we even dive in there, let's take a step back. 

Let's understand how B2B procurement or how "digital B2B procurement" has occurred over the last couple decades. 

So if I'm an organization and I'm the end customer and I run a business, let's say I run a really large hotel chain. It's this global hotel chain. I have multiple brands. I need to support operations at every one of these hotels. 

I need paint so that I can refresh my lobby or refresh the rooms with fresh paint. Maybe I need new keyboards or mice for my front desk. 

So I need to work with distributors that give us IT equipment and hardware. 

Maybe I need new furniture because some things break and I need to replace those areas. 

Or maybe I need safety equipment or all of the cleaning equipment for my maid service. Those pieces of equipment may come from various vendors. 

I may have tens, even hundreds of vendors, providing me various things for my operations that I need. 

Maybe I'm a manufacturer, I manufacture cars. And within that manufacturing facility, I need tons of safety equipment. I need tons of replacement parts for all of my manufacturing equipment. 

Again, I have a bunch of different vendors that I'm looking for to buy all of this stuff, all of this stuff to make sure operations within my organization is going smoothly. 

Now, I as an end customer running this massive hotel chain or running this manufacturing facility, I don't want to call up and talk to and build procurement processes and payment processes with tens or hundreds of different vendors. 

I want to figure out some unified way of making my orders. 

And that's where third-party procurement applications really started proliferating, because these organizations had a need for all these different parts from a bunch of different vendors. 

So Ariba comes along, and they say, "Hey, you know, end customer, use my platform. Get all of your manufacturers, get all of your suppliers, get all of your vendors on this platform, and it'll be really easy for you to make purchases. We'll handle all of the purchasing process end-to-end within these platforms." 

And now there's still the process of being able to select SKUs and what I want and what I want to purchase. 

And the way of doing it, that's still being used now for probably the majority of procurement applications is what's called a static catalog.

Static Catalog

I, as a vendor who wants to support this end customer, will upload a catalog of SKUs right onto this third-party application. 

It'll have the SKU number. It'll have a short description. It'll of course have the pricing. It might have the lead time. And that's kind of it.

And it will be intermingled with all of the other vendors that support this customer so that they can make a purchasing decision.

Now on its face, you could call that a digital buying process. I go to an online procurement portal and I make all of my purchases. The problem is, I as the vendor have no differentiation. I have no way of building loyalty to my actual business. I have no way of actually having an integrated way of upselling or cross-selling or building a model that would influence customers to purchase better products or better SKUs that could lead to a win-win for both organizations.

It's just very basic. I have a spreadsheet and I load in all of my SKUs onto this application. 

So along comes PunchOut

PunchOut allows for organizations to still use this third-party software that streamlines the procurement process, that streamlines the actual order management of how this is all going to work across all of their vendors. But it creates a bit of a tunnel or a portal into an actual digital commerce or eCommerce-like experience for the customer. 

So I as a vendor can have my own PunchOut experience.

It's just my SKUs. 

It could look exactly like any other website or any other digital commerce experience, but it has the nuance of specific SKUs that might be tailored to a customer. 

It would have their custom pricing that would be tailored to a customer, because most of the time in B2B, I have contracted pricing.

It's not like the B2C world where there's a price that everybody gets. 

Whether I sit here in Chicago or you sit in California or in New York or in Florida, this is going to be specific to my customer. 

And more so, it could be specific to a customer's business unit or location or different buyer or buying power that somebody is going in and making a purchase.

This is all very different than how a consumer-based, digital commerce experience is going to be designed. 

And now the counter to that is to say, "Okay, I'm a vendor. You've explained to me PunchOut, but this sounds like it's a lot of work. It sounds like I need to put a lot of effort into things like product data and things like all of the nuance on buying power and cross-selling and upselling.”

And my counter to that counter is, absolutely, it's a lot of work. 

But what you've done is you've separated yourself out from that sea of parts on a basic static catalog within these procurement applications because at that point, there is no differentiation. 

Your SKUs probably overlap with other vendors that that end customer works with.

And what ends up happening is I can simply create a competitive environment that creates the lowest common denominator of pricing being the only thing that I'm looking at within my procurement portal. 

So if I have a static catalog and I see two wrenches, and one is a buck and one is 80 cents, I'm obviously going to purchase that 80 cents wrench because that just seems like a better deal. 

They'll have no idea that the dollar wrench is actually going to last twice as long or is made in a country that you prefer or has all of these different areas that I think would probably better upsell a more expensive or premium product. 

You've created an incentive to only look at pricing. 

PunchOut allows for your products to get away from a side-by-side comparison and allows you to actually build a business value for an organization to work with you. 

On top of that, it lowers the way that somebody is going to have to work directly with a salesperson within your organization. 

With a procurement site that is using a static catalog, I still need to pick up the phone. I still need to be explained certain things. 

This is mainly meant as a transactional process, not an exploratory process. 

With PunchOut, I can now make a commerce experience that gives thought leadership around specific products, around specific categories of products to the customer that will build loyalty that reduces the amount of time that they're picking up the phone and debating what types of parts they should be purchasing. 

And remember, these folks aren't purchasing in small quantities like consumers.

These are thousands, if not tens of thousands of dollars, of purchasing power in one single transaction. 

That's why it's of the utmost importance that we focus on PunchOut and why PunchOut is so powerful in the B2B space. 

Importance of Data

The last thing that I wanna focus on is why data is so important in PunchOut. 

We talked about products and we talked about enriching those products so that I can have an exploratory process, right? 

We can build an eCommerce-like system for our B2B customers where I've got great digital assets associated with my products, where I've got a long description, short description, feature bullets, and all of my faceted search around all of my specifications that are associated with it. 

But what's more than product data is now I'm gonna start being able to build better customer data as well, and location data and really start intersecting all of this information and then ingesting it into my own systems as a vendor. 

Because now if I can collect more pieces of information, I've built out first-party data. 

And this is really the core to what a vendor needs to continue to grow their organization, to understand their customers better, to build out more and more sales from their end customers by being able to apply to them what they need and when they need it. 

And having a PunchOut experience with all of the different pieces of information associated with the customers and the locations of their customers and the business units that they work with, and the people that are actually doing the procurement for the business leads to this treasure trove of information that I haven't had before. 

And it creates a model that makes me very, very competitive and very powerful within the B2B distribution space. 

So those are a couple reasons why PunchOut is so critical in modern B2B distribution. I think it's easy to stick with static catalogs, but we need to start thinking about why PunchOut can be something that sets you apart, that allows for organizations and end customers to be really happy and really loyal to some of these select vendors that are truly investing in this experience for their end consumers.

About the Author

Blue dotted circleVinny Maurici

Vinny Maurici

VP of Data Engineering

As Vice President of Data Engineering, Vinny is accountable for the growth, success and thought leadership of the Data Management business at Object Edge. He brings 15+ years of master data, merchandising, and governance experience; and has launched several successful enterprise and Fortune 500 global product data programs in B2B Manufacturing and Distribution, Retail, and Food Services.

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