Unlocking New Revenue Streams: Extending Catalog through Direct Integration with Suppliers

Suppose you want to offer your customers a broader selection of products and services or greater control over your supply chain. In that case, direct integration with suppliers can help address the issues of managing and controlling your offering. Supplier integration brings many benefits, from differentiating your company from competitors to achieving economies of scale without acquiring new businesses. However, it also posits many challenges, such as adopting and implementing new technological systems and ensuring a seamless flow of information between the parties without compromising security. Many of those technological problems can be efficiently addressed and solved by adopting and further customizing the B2B ecommerce platform and its integration with third party systems.

Situation

Pretend your company has established ecommerce operations, meaning you have a robust and relatively constant consumer base with several websites selling your products and services and would like to expand your operations. Then, you may consider integrating with your suppliers to extend the offering of products to the same consumer base. Through direct integration, you can achieve a massive increase, from thousands to millions of products, which will further lead to increased satisfaction of existing customers, unswerving customer loyalty, an influx of new buyers, and more profits.

Customer loyalty can be explained rather straightforwardly: with an expanded offering from one supplier (you), customers are less likely to shop around and instead order more products with an existing partner, hoping, in the meantime, for bulk discounts and special offers.

On the other hand, your business increases the purchase volume from your own suppliers, all the while lowering procurement prices and increasing profit margins.

Challenges

Few companies are willing to expand the offering in a traditional way, which implies buying out, storing, selling products, and taking all the risks associated with such an arrangement, including constant catalog maintenance and management. New ways to expand the business must be devised.

One of the primary challenges of integration is that not all ecommerce solutions can maintain catalogs with millions of products. While some solutions state the limitations overtly, others don’t and need to be inquired separately. It is essential to know how much your ecommerce can handle. If it can only support up to one million products, your expansion efforts might prove futile. Even solutions as Salesforce and Hybris have limitations that might not be openly disclosed, so you should inquire privately.

Another challenge is the implementation of the required changes to the business model. Although changes might not be as dramatic as turning your store into a marketplace or incorporating drop shipping, certain changes are still required: your suppliers shall be able to upload and maintain their products without external help. At the same time, customers have a birds-eye view of the current stock and detailed information on the delivery terms. For suppliers to make relevant changes to the catalog, it needs to be available via APIs. Access to the catalog implies that your platform needs to have customizable permissions and granular access levels. Seamless digital catalog management is one of the top priorities and perhaps, the main challenge to overcome to make direct integration successful.

The catalog management also implies the need for automatic pricing or a pricing module capable of assigning prices to a multitude of products without manual intervention.

After pricing, you need to configure business logic for payment and delivery of products. From a customer’s standpoint, they will still think they are buying products directly from you; however, in reality, your suppliers are responsible for organizing the shipment of their products. Such a complex arrangement requires your ecommerce solution to be in sync with your suppliers’ inventory and shipment/delivery modules. For example, suppose a customer chooses a product that belongs to your supplier. In that case, you have to be transparent with your customer about the logistics process involved and the expected delivery dates. When you have millions of products in your catalog, it becomes virtually impossible to handle every order manually. Hence your solution needs to provide such information automatically so that customers are aware of the movement of their orders and any other relevant details (such as additional overhead costs).

Solution

Virto Commerce B2B ecommerce platform flawlessly deals with the above challenges.

First of all, the solution is API-first and has built-in functionality that allows you to customize access levels for both employees and third parties.

The Virto Commerce solution also has a Price Module that can be further configured to incorporate any custom business logic, including automated pricing and syncing with third party systems (ensuring the same prices are shown across the board).

Moreover, the solution works well with big volumes of data, thanks to its modular nature and cloud deployment, as will be later demonstrated by the described use case.

The solution is pliable enough to extend its current business logic and incorporate many other complex scenarios pertinent to the B2B context.

Regardless of any specific customization and unique business logic, the Virto Commerce B2B ecommerce platform (thanks to the built-in extensibility mechanism) allows for painless updates. If a solution undergoes some degree of customization, every update is typically a painful procedure that requires additional labor resources. With Virto Commerce, every update, regardless of how customized the solution, is relatively painless and doesn’t entail overhead costs.

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 architectural guidelines 

Suppose you are not ready to divest your legacy solution or move some of your business processes to the new B2B ecommerce platform. Then, you can keep it and still use Virto Commerce for operations where your older solution is underperforming or unable to handle more complex scenarios. Virto Commerce can exist in parallel with any of your older platforms, integrate with them, or extend them so that all solutions function together. For example, if you have Magento, you don’t necessarily have to abandon it. You can integrate it with Virto Commerce and build the required functionality on top of the new solution, while leaving Magento as the master data.

Case study

Standaard Boekhandel, a large Belgian bookstore chain, had an initial offering of 100 thousand books (which the company stored in its warehouse). Thanks to Virto Commerce, the company has been able to expand its offering to 16 million titles. Besides expanding their offering by dint of seamless integration with the suppliers, the new features have enabled the company to improve search functionality for their brands, handle complex pricing models for varying product types and distribution channels.

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Now, if a customer orders a product that’s not in the company’s warehouse, the customer’s request is transferred directly to the supplier (publisher). The system prompts the customer to choose a convenient pickup location and notifies him about the time required for delivery to the destination. The supplier then delivers the book to the central warehouse, where it gets shipped to the customer’s preferred location. When the book arrives at the chosen bookstore, the customer receives a notification.

As we can see – there are enormous benefits to integration but also associated risks, which can be avoided with the right B2B ecommerce platform.

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Marina Vorontsova
Technical author and eCommerce advocate