Discover what some large B2B companies require before starting collaboration. Gain an edge over other businesses through a single integration.

What will you find in this article?

How can a client’s procurement system be connected to B2B e-commerce?
What do we gain through PunchOut integration?
What is PunchOut integration?
Who needs PunchOut integration?
Is PunchOut integration possible in Magento?
How much does PunchOut cost?
Advantages of PunchOut integration
Summary

How can a client’s procurement system be connected to B2B e-commerce?

Firstly, a simple answer to a question primarily of interest to B2B companies, B2B sales directors, B2B ecommerce managers, and B2B company boards.

Connecting a client’s procurement system, such as SAP or Ariba, to your ecommerce is possible. This is typically achieved using a feature known as a PunchOut catalog.

In this article, I will describe a specific integration type that allows access to your offer directly from your customer’s procurement system. This key solution facilitates easier and faster procurement processes for large B2B companies, such as manufacturing companies and factories, which increasingly require the ability to order through their own procurement systems.

punchout integration team

What do we gain through PunchOut integration?

With PunchOut integration, procurement specialists on the client side, using their internal systems like SAP and Ariba, can access a complete product catalog and place orders with their terms without logging into an external B2B ecommerce.

All purchases are organized from their procurement system, representing a significant convenience. These systems are commonly referred to simply as e-procurement solutions. A frequently implemented solution for such integration is PunchOut integration (sometimes called PunchOut catalogs).

What is PunchOut integration?

PunchOut integration involves connecting your B2B ecommerce to the client’s procurement system. This integration results in your product catalog being browsed directly within your client’s system. When a user in the e-procurement system selects what is known as an external product catalog, it simply displays your B2B ecommerce.

PunchOut integration is a forward-looking step for companies wanting to maintain competitiveness in the B2B market. This revolutionary solution closely ties the supplier with the purchaser (making the supplier change more costly).

On your B2B e-commerce, the buyer can browse products, add them to the cart, and then transfer all products and prices to their ordering system (e.g., in SAP) with a single click at the final checkout stage.

The process then continues in accordance with the company’s internal procedures. The buyer has access to the full offer on your B2B ecommerce, which facilitates the implementation of strategies to increase cart value, such as cross-selling or up-selling. At the same time, the SAP system user can execute the procurement process according to the standards established by the company.

Who needs PunchOut integration?

Such solutions are essential for B2B companies. Mostly, large buyers need this. If you have secured a huge factory or large international customer, it is common to connect B2B ecommerce to their procurement systems.

This is because such organizations must have a standardized procurement process. It is not feasible for a procurement officer to use 40 different platforms and place orders in 40 different places. This is unacceptable in large companies, as it would simply reduce the efficiency of the entire procurement process.

If you have acquired a vast buyer with several factories worldwide, it is practically impossible to collaborate with them other than by connecting your B2B ecommerce to their procurement system.

These e-procurement systems are usually large and complex, yet not very flexible solutions. Suppose you already have such a large client. In that case, they usually take the initiative and ask whether connecting your B2B ecommerce to their e-procurement system using a PunchOut catalog is possible.

Then, you probably agree and decide to perform such integration. Of course, a B2B e-commerce is necessary to carry out such integration.

Is PunchOut integration possible in Magento?

Not every ecommerce can be integrated with a procurement system, mainly due to API limitations.

Magento, a popular solution in the B2B, allows such integration. Moreover, there are even third-party modules often labeled “PunchOut,” which significantly facilitate the process.

However, remember that integration costs often fall on the supplier. In our implementations, the large buyer usually required the supplier to perform the integration (and thus pay for it) from the Magento side.

punchout integration

How much does PunchOut cost?

Regarding costs, we prepared several quotes and performed various integrations using Magento.

If the B2B ecommerce was already ready, only the integration needed to be performed. It typically took between 200 to 250 work hours (there are third-party modules, but they often require additional work and customization). At a rate of 65 USD/EUR per hour, the cost was approximately 13.000 – 16.000 USD/EUR.

For small buyers, this may be a significant amount, but for larger organizations, such as international retail chains, factories, or government agencies, it is a relatively small expense.

The problem arises if you do not yet have B2B ecommerce, as in addition to integration, you must also develop a complete ecommerce, which requires an appropriate visual layer (using the PunchOut catalog, the buyer is transferred to the B2B ecommerce frontend).

Using e-procurement systems, the user will see your B2B ecommerce by clicking on an external catalog. Therefore, the system should be intuitive and have an attractive graphic design to facilitate navigating your ecommerce, product searching, adding items to the cart, changing quantities, and communicating about products and accessories.

If you do not yet have a B2B ecommerce, it is necessary to develop one. Such a platform on Magento costs about 90,000 – 105,000 USD/EUR. This is the minimum amount you should anticipate. Additionally, the previously mentioned PunchOut integration cost must be added to this amount.

Advantages of PunchOut integration

This solution has several benefits; I will start with the most important for you.

Assured supplier position

First, when you are integrated with a client at the technological and systems level, replacing you as a supplier is harder.

The process of choosing a new supplier and integrating with them is time-consuming and requires organization, which discourages changing suppliers. If your products are directly available in the client’s ERP systems, this is a strong argument for long-term cooperation.

Access to the entire product offering

Second, with B2B ecommerce, your client can access an entire product offering.

Implementing cross-selling and up-selling strategies can significantly increase the average order value and the depth of the cart. Your B2B ecommerce becomes a “salesperson” available 24 hours a day, ready to work with the client at any moment. Of course, a necessary condition is to reflect all the client’s trade conditions in the B2B ecommerce (to ensure that, for example, certain discounts are accessible from the B2B platform).

Lower order fulfillment costs

Another benefit is automation, which lowers the cost of order fulfillment. Most of the responsibilities associated with order fulfillment shift to the buyer’s side.

Gone are the days of sending simple documents, customer service, sending price lists, and printing offers from the ERP system.

Automating procurement processes in the client’s system significantly simplifies and speeds up these processes and lowers costs.

Increased revenues

If you have well-developed up-selling and cross-selling strategies on B2B ecommerce, you can increase both the depth of the cart and the average order value.

You can use all available tools to improve the lifetime value (LTV) of a given client. Remember, if the buyer decides to use an external catalog, which is your B2B ecommerce, upon clicking this catalog, they will see your B2B ecommerce. It will not be a simple Excel sheet with products but an advanced B2B ecommerce.

How you implement usability and what sales promotion communication strategy you decide to apply will depend entirely on you, and you will have full control over it.

Summary

If you want to connect your client’s procurement system with your B2B ecommerce, it can be achieved through PunchOut integration. In practice, your B2B ecommerce, running on any ecommerce engine, is connected to the client’s procurement system, such as SAP or Ariba.

Hence, the person making the purchases can continue using their procurement system and remain in the process mandated in their corporation. Still, simultaneously, clicking on an external catalog transfers it to your B2B ecommerce.

There, they select products, add them to the cart, and then, after adding products to the cart, transfer them to their procurement system using the PunchOut function. The products are then transferred to the client’s procurement system, where the order is finalized following the established order placement procedures.

The cost of such integration depends on several factors, but it is most commonly in the range of 13.000 – 16.000 USD/EUR.

Most organizations, especially large and international ones, should be prepared to require their suppliers to perform PunchOut integration sooner or later.

This integration offers significant benefits, such as increased security. When procurement systems are closely connected, it is harder for a supplier to be removed from the ecosystem, which builds a competitive edge.

Contact us if you are considering performing PunchOut integration or need to carry it out quickly because it is part of a contract you just signed. You can do so by filling out a form on our website—we will contact you within 15 minutes to preliminarily discuss your situation and plan a longer conversation.


Growcode Ecommerce Blog / Ecommerce / Magento / What is PunchOut integration?