Should a supplier use a hosted catalog or a punchout catalog? It’s a common question suppliers ask themselves when they have a customer that uses an eProcurement system. There is often a choice and each one has its own benefits.
What is a hosted catalog? A hosted catalog is a listing of goods and products offered by a supplier uploaded to their customer’s eProcurement system. The information is provided in a standard format that includes product name, price, product description, and a few other variable fields. The file is a static spreadsheet and is managed on the eProcurement system. The buyer uses the hosted catalog file to compare prices and products among their suppliers as well as make purchases.
The hosted catalog is a quicker and easier option to set up, but there are many challenges associated with it. Primarily there is less flexibility since it is not interactive. The only user interface is within the eProcurement system so the supplier loses control of upselling and cross-selling. Additionally the day the file is uploaded from the supplier to the eProcurement system it becomes out of date. If prices or content do not change frequently this may not be an issue, but for most suppliers that have price changes regularly, it can become a nightmare to constantly upload new catalog file. If a product is ordered but out of stock or the price is incorrect, the supplier may have to honor an older price because the hosted catalog was simply out of date.
What is a punchout catalog? A punchout catalog is an eCommerce website that integrates directly with an eProcurement or ERP system. Punchout catalogs allow companies to sell directly to their buyers from an online catalog, offering an interactive shopping experience that most users prefer. It gives the supplier control of product information and pricing. Punchout catalgs can provide all of the B2B features businesses request including electronic quoting, quick order tools, user favorites and the most up to date pricing/product mix.
So why isn’t everyone using a punchout catalog? The first challenge can be technical. Many businesses struggle with the punchout integration, so they stick with a hosted catalog, which is much simpler and can be managed in a simple Excel or flat file. Another common challenge is buyer related. Many buyers only offer punchout catalogs for those organizations that have existing capabilities and have the expertise. This is why choosing the right punchout partner to bring the expertise to assure your buyer that you have the punchout expertise to integrate with their systems and fulfill all of their requirements.
So which one is better? There is more upside to using a punchout catalog since it allows companies to developer a deeper, stickier relationship with the buyer. Punchout is not always available, so a hosted catalog is a safe fallback option in those cases. Most buyers prefer the rich shopping experience over a static flat file, and the benefits are more significant in the long-term. Ultimately, having control over your pricing and product mix gives punchout the overall advantage.
Do you have customers considering punchout but are overwhelmed by the technology? Contact us today to learn more about leverage eProcurement and punchout as an opportunity for suppliers large and small.