Ultimate Guide to PunchOut Catalogs in eCommerce

Punchout is a popular procurement automation tool in the B2B sector. In this article, I will explain how it works, its advantages and disadvantages, and how to integrate it with a modern ecommerce portal.

Introduction to PunchOut Catalogs

The idea of punchout is to export a product catalog from the supplier's ERP system or website to the buyer's ERP system or e-procurement application for convenient corporate purchasing.

The most popular definition of a PunchOut Catalog is an e-procurement solution that grants customers easy access to a vendor product catalog from the supplier's website without leaving the buyer’s e-procurement system. This solution also allows adding items to a shopping cart and other related activities.

The punchout technology was widely implemented in the 2000s, before the modern era of B2B ecommerce portals and marketplaces. Still, many large companies and government agencies are actively using punchout today because of its ease of use and the inertia of the established business processes in large companies. Accordingly, the task of integrating punchout systems with modern B2B ecommerce portals and marketplaces has become vital.

Punchout catalogs provide benefits for both buyers and sellers, such as increased efficiency, transparency of pricing and terms, and streamlined ordering processes. This solution is most convenient for medium size and large companies that are constantly purchasing items for production, requesting equipment maintenance or repair, reselling items to small business clients, etc., who want to standardize their procurement processes.

Punchout catalogs allow buyers to easily browse and search for products from their preferred suppliers, all within their own procurement application. This can save much time compared to manually searching and ordering products.

Punchout catalogs also provide sellers with a way to showcase their products and services to potential customers in a highly efficient manner. By making it easy for buyers to find and compare punchout catalogs from different suppliers, sellers can increase their chances of winning business.

Are you already working with B2B Punchout catalogs and want to learn how to build an integration with an ecommerce solution?

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Punchout Catalogs, APIs, EDI - Technologies for B2B eCommerce

Although this post is about punchout technology, it's fair to point out that there are other ways to integrate vendor and buyer computerized trading systems in B2B. This includes using APIs and EDI, so I will briefly discuss them to expand your knowledge in this area.

In modern B2B commerce, there are several technologies for buyers to work with supplier directories. The choice of method depends on the digital maturity of the company, its size, established business practices, and the availability of an in-house development team that can implement the most advanced technologies on the customer side.

  • A hosted catalog is the simplest way to share vendor’s product catalogs with buyers. The vendor exports its product catalogs in a universal format, such as excel, and places them in a password-protected folder on the website for download. This is a static form of catalog data exchange, and it is primitive because the information in these files is updated sporadically, and not all items in the catalog may have actual prices. The customer has to additionally contact the vendor's sales team to clarify the price and availability of the selected items.
  • A B2B punchout catalog is an e-procurement platform that allows clients to access a distributor's catalog from their ERP system. Punchout-enabled customers do not have to leave their ERP system to order goods from a verified supplier.
  • EDI stands for electronic data interchange, which is the transmission of commercial information such as purchase orders, invoices, change requests, and so on in a standardized format that each partner's systems can process. The advantages of EDI include improved competitiveness by forming relationships with suppliers and customers who use it. Currently, EDI is mostly implemented in the retail industry. Remember that EDI is not a peer-to-peer communication like punchout technology or API. It requires an EDI operator in the middle to exchange messages between a buyer and supplier. This is like the talk of two persons using mobile phones through an operator.
  • APIs (application program interfaces) are a set of protocols that govern how one application can send a request to another. In other words, an API connects one machine and software to another via a local network or the Internet. API is widely used for software integration in many e-commerce applications. API is a peer-to-peer communication like punchout technology and doesn’t require an operator for exchange between a buyer and supplier.

How Does a Punchout Catalog Work?

Technically, a punchout catalog is an online supplier catalog that is developed with an open catalog interface to support punchout procurement related to a customized punchout website. The punchout ecommerce solution enhances the structured relationship between an e-procurement system of the buyer or ERP and the storefront of the vendor.

The punchout system is designed so that the vendor isn't notified when any purchase is made by the customer. The buyer's e-procurement system serves as a processor for the items in the shopping cart. This makes it very easy for customers to migrate between different product catalogs.

It is important to note that a punchout catalog stands as the most effective way for customers to examine a vendor's catalog. Also, it's a convenient way to place orders using an e-procurement system.

What is a punchout catalog


What Format Are PunchOut Catalogs?

Punchout catalogs work on the principle of open catalog interface (OCI), a standard format used by SAP Supplier Relationship Management, Microsoft Dynamics AX, and other purchasing systems that links to an external punchout online catalog.

A customer interested in buying a product leaves—or “punches out” of—their procurement application and moves to the seller's webspace or e-catalog. The buyer can then shop and add items to their cart while a connection is established between the buyer’s procurement application and the supplier’s web-based catalog.

When the buyer wants to place an order, the cart and items are sent back to the buyer's procurement application, and the customer does not follow a standard checkout procedure. Instead, the cart is sent back, and the order is placed through the application to the buyer organization for financial approval; once it is verified, a purchase order is created and sent to the supplier to fulfill.

The moment there is a punchout integration with the buyer's e-procurement application, a purchase would look like this:
How does a punchout catalog work?
  • The prospective buyer (client’s employee) uses the e-procurement application and selects your supplier’s name as the vendor.
  • The vendor website and its contents would be fully displayed to the user even though they haven't logged in or visited the actual website. The user can now browse and search for the products or goods and add them to the shopping cart; however, instead of checking out, they punch out.
  • When the user finishes the product selection, a request is sent for approval within the user’s company's e-procurement application. The moment the approval is granted, the system sends the product list to the supplier's original site, and the normal procedure for online purchase begins.
  • The punchout process is quite straightforward and helps the buyer’s organization search for and purchase products freely on numerous sites without leaving their e-procurement applications.

What Is the PunchOut e-Procurement System?

Electronic procurement is a standardized way that large organizations and government agencies purchase many items for their daily needs. Although the process may seem similar to regular buying from shopping sites, there is a big difference—electronic procurement requires an e-procurement application to monitor management policies, vendor agreements, and other specifications.

An e-procurement system is a specialized application used by business organizations to conduct electronic transactions. It is a software tool through which employees of an organization or an agency purchase goods needed by that organization from a supplier.

Businesses ask their employees to conduct transactions only through their e-procurement system. The application can also be used to browse and look for products online from different suppliers. When the procurement officer sees an item that needs to be purchased, this user adds it to the cart and sends it to the buying organization for approval via the e-procurement system. Once approved, an order request is sent to the supplier.

Organizations are establishing procedures for their purchasing employees to conduct transactions only through their e-procurement system. An e-procurement software application can also be used to browse and search online for items from various vendors.
What is the punchout procurement system?
After approval from the finance department or a senior manager, the purchase order is sent to the supplier for fulfillment. Often, the approval process in organizations is built accordingly to order amount limits—small orders can be approved automatically, larger orders require approval from the purchasing manager, and especially large ones from the CFO.

There are several kinds of vendor catalogs for e-procurement systems:


Hosted catalogs

A hosted catalog is a list of products available for purchase and created by the vendor (usually in an excel format) to give vital information for searching for offered goods and services. Suppliers can easily create such kinds of catalogs, and buyers easily access them; this type of catalog is ideal for catalog lists that rarely change. However, it is unable to share information with the e-commerce website.

CIF catalogs

The Common Interchange Format (CIF) is a worldwide standard for catalog descriptions. Thousands of procurement systems from many manufacturers around the world use it. CIF catalogs are divided into two categories: full-line and cross-tabular.

  • Full-line catalogs are the most common type. They list all items in the catalog and their descriptions and prices.
  • Crosstab catalogs only list items that have been updated since the last time the file was generated. They don't include descriptions or prices.
Which type of CIF catalog you use will depend on your needs. If you need to update your catalog frequently, crosstab might be a better option. But a full-line is probably better if you want to include more information about each item.

PunchOut catalog

The punchout catalog could be available as a vendor application that provides adequate information for ordering goods and services and supplies marketing and promotional information directly to B2B customers. It is far more dynamic and automated and can be integrated with an ecommerce system.
The events that happen in a punchout catalog are:

  • Connect: Allows buyers to browse the supplier's website and lets them view the product catalog through the e-procurement system.
  • Shop: A buyer searches for items without actually visiting the supplier site. When the selection of goods is complete, the buyer waits for approval from the buyer's company management.
  • Purchase order: Once the approval is given and account information is provided, the buyer's e-procurement application sends the order to the supplier.
  • Redirect and Data transfer: Using the punchout system, the order is redirected or transferred to the supplier's site using standard languages like cXML or OCI.
  • Shipping: When the order is processed by the supplier, the packing and delivery of the products begin.
  • Record keeping: When the products have been successfully shipped and the transaction completed, the punchout system sends data back to the e-procurement system for future reference, inspections, and reports.

Integrating a punchout system has become easy and inexpensive, and the process is easy to understand and execute. However, languages and protocols must be properly configured and managed. Most companies, even government agencies, are trying to stay in a competitive marketplace. An e-procurement system is a great way to control employee purchases, authorize only the right ones, keep track of company expenses, and save procurement staff time.

Interested in Punchout catalog integration with an ecommerce solution?

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Cif/Hosted vs. Punchout catalogs - understanding the difference

Punchout and CIF/Hosted catalogs both allow suppliers and organizations to display their products for sale through an e-procurement application. However, the approach toward fulfilling this goal differs.

A CIF (catalog interchange format) catalog is a static list that only provides information about goods displayed within the organization's procurement system; it is also referred to as a line-item catalog. The supplier must always compile the data for this type of catalog and upload it to the buyer's e-procurement system. Examples include SAP Ariba, Coupa, and JAGGAER.

A punchout catalog is a more dynamic tool that can integrate with a buyer's e-procurement system in real-time and handles data automatically. The trend is that organizations use this format more frequently.

Why Do You Need to Use a Punchout Catalog?

Most companies and institutions have strict purchasing policies, budgets to follow, regulations for adding new vendors to the pool of verified vendors, and many other rules. Punchout apps help these organizations manage procurement activities and provide several benefits, such as:

  • Reduced costs: A punchout system offers some opportunities to save money by reducing labor costs, mostly using automation. There are also discounts from vendors on their e-commerce sites. Working with a punchout system is a cost-effective process.
  • Productivity: A punchout catalog provides a stable online connection between an organization's e-procurement application and the supplier's website. This means the buyer won't waste time searching vendor websites when they want to purchase items for the organization, and less time will be spent placing orders because the process is automated.
  • Reduce errors and increase speed and accuracy: A punchout catalog helps reduce purchasing errors in the buying organization. It also makes purchasing fast because of working with a verified supplier. Procurement processes become easier to manage.
  • Centralized docflow: Companies can better manage information and purchasing with a single punchout catalog because the customer must send the product through the e-procurement application for approval. Companies can set the appropriate internal docflow rules, automate them, and manage the process.
  • Real-time updates: Product information and prices in punchout catalogs are always automatically updated on the supplier side so that information is available to customers in real-time.
  • Preventing Unauthorized Purchases: Unauthorized purchases are items purchased by employees that are not on the approved purchasing list. If items were purchased with company money and in the company's name, it could cause losses. Having a punchout system in place means that all transaction reports are sent back to the company through the e-procurement app, so dark purchases can be checked and prevented.
  • Verified Supplier Pool: It can be difficult to keep track of all the suppliers a company deals with and the products they supply. However, with the punchout system, a buyer can easily search for products from various sources without leaving the e-procurement application.

Although punchout procurement methods may seem complex and troublesome initially, they are essential for efficiency in large companies and government agencies with rigid procurement rules and multi-step internal docflow.

PunchOut Catalog Benefits

For several reasons, many B2B clients opt for the B2B punchout catalog, and product vendors have been asked to provide these catalogs. Most suppliers don't understand the reason for this and might not be quick to adapt, but experienced suppliers know how important a catalog is and the benefits it gives their customers. Benefits of using a punchout catalog include:

  • Keeping valuable customers
  • Getting new sales opportunities
  • Raising Revenue
  • Improving customer loyalty
  • Giving the supplier an edge over competitors
  • Raising customer experience and purchase satisfaction
Punchout is steadily becoming a must-have for supplier companies. This technology easily solves a complicated product search by allowing users to access vendors' product catalogs, increasing the chances of making a purchase.

The vendor company gains more loyalty from the B2B customers, more sales, and faster deals with a punchout system.

cXml and OCI Document Languages for PunchOut

cXML (Commerce eXtensible Markup Language) is a standard document language that gives B2B users with procurement systems the ability to punchout to a vendor's e-commerce website.

OCI (Open Catalog Interface) is similar to XML; however, it uses field mapping to connect the buyer's procurement system and the supplier's e-commerce site. OCI document language is more configurable than CXML and is more versatile.

cXML parameters

Vendor setup

External catalogs

  • cXML mode
  • Send purchase request updates
  • Send purchase request delete
  • Archive path
  • Max characters for street line
  • Send purchase over cXML
  • Punchout protocol types
  • Order properties
  • Punchout extrinsics

PunchOut Catalog Examples

There are many other examples of punchout catalogs, each with unique features and benefits. Here are just a few punchout catalog examples:

  • PunchOut2Go (currently rebranded as TradeCentric) is the leading provider of punchout catalog integration solutions. They offer a simple, turn-key solution that makes it easy for buyers to connect to any punchout catalog and a wide range of other ecommerce platforms. Learn more about punchout integration capabilities with Virto Commerce below.
  • Amazon Business PunchOut: This punchout catalog gives buyers access to millions of products from Amazon Business, the B2B marketplace from Amazon.com. With Amazon Business PunchOut, buyers can enjoy the same convenient shopping experience they're used to from Amazon while also getting the added benefit of competitive pricing and discounts available only to businesses.
  • SAP Ariba PunchOut: Ariba punchout is a popular punchout catalog that connects buyers to suppliers through the Ariba Network. With SAP PunchOut, you can provide an updated and personalized shopping experience for customers browsing SAP Ariba catalogs. B2B shoppers are redirected to the vendor's website, where the latest products, prices, and ordering options are displayed in real-time.
  • Oracle iProcurement: PunchOut Catalogs allows Oracle iProcurement users to punch in and shop on vendor websites while completing the verification and approval process internally at the Oracle enterprise application suite.

Why Choose Virto Commerce?

Virto Commerce serves as a commerce integration platform that simplifies the integration of advancing B2B e-commerce abilities with other systems of business like punchout that ignite faster starts.

Punchout integration allows businesses to connect their ecommerce store with their punchout system. This enables buyers to easily punch out and purchase items from the ecommerce store and suppliers to receive orders and invoices automatically.


Why is integrating punchout systems and ecommerce so vital?

The advantage of punchout integration lies in the fact that it can save a company a lot of time and money. For example, if a business uses an ecommerce store to sell products but still has to handle orders and invoices manually, the process can be very time-consuming and expensive. By integrating the two systems, businesses can automate the process and save both time and money.

Features and benefits of punchout catalog and ecommerce integrations

Punchout integration offers many benefits for businesses, including:

  • Reduced costs: Businesses can save on labor costs associated with manual processing by automating the process.
  • Increased efficiency: Automated punchout can help businesses reduce errors, increase accuracy, and improve turnaround time for orders.
  • Improved customer satisfaction: Businesses can improve customer satisfaction by making it easier for customers to punch out and purchase items.
  • Increased sales: Businesses can increase sales by making it easier for customers to purchase items. To summarize, punchout integration is vital for businesses that want to save time and money, increase efficiency, and improve customer satisfaction.

How do you integrate a punchout application with the virto commerce platform?

To integrate a punchout application with the Virto Commerce Platform, we cooperate with TradeCentric. TradeCentric is the perfect partner for businesses looking to connect, automate, and scale their digital trading capabilities.

TradeCentric's unique position at the intersection of ecommerce and eprocurement makes it the perfect partner for businesses looking to connect, automate, and scale their digital trading capabilities.

In conclusion, Virto Commerce stands among the greatly developed product companies in the business space. You can check out the program and its enormous benefits and solutions, like B2B marketplace platform, to get started and have a flawless operation. Your customers can rest assured that your site is secure and always updated. Companies can download and use Virto Commerce for a free trial. Virto Commerce is available for all companies to handle their online needs.

Contact Virto Commerce today to learn more about our punchout integration solutions for B2B sellers and buyers.

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FAQs

What is the meaning of punchout?

Punchout is a term used to describe a situation where customers gain access to their supplier’s website through a punchout catalog that connects the customer e-procurement application to the supplier’s site.

What is punchout in ecommerce?

Punchout is an e-procurement platform that allows customers to access a distributor's catalog from their ERP system. Punchout-enabled customers do not have to leave their ERP system to order goods from a verified supplier. This streamlines the procurement process and makes it more efficient for both the customer and the supplier. Punchout can be used for various industries, such as automotive, aerospace, industrial, and medical.

Pros and cons of punchout catalog ecommerce integrations

There are several advantages of integrating punchout with ecommerce:
 
  • Increased Efficiency: Automating the punchout process can save buyers a lot of time. They can simply punch out from their ecommerce store, and all their order information will be sent to the supplier automatically. This also eliminates errors that can occur when manually entering order information.
  • Greater convenience: Punchout integrations make it more convenient for buyers to purchase items from suppliers. They can simply punch out from their ecommerce store, and all their order information will be sent to the supplier automatically. This saves buyers the hassle of going to the supplier’s website and manually entering their order information.
  • Increased sales: By making it more convenient for buyers to purchase items from your ecommerce store, you can increase sales. Punchout integration can help you to reach a wider audience of potential buyers and turn them into customers.

There are also some disadvantages of punchout integrations that businesses should be aware of:
  • Setup cost: There is a cost associated with setting up punchout integrations. Businesses will need to pay for the integration solution and any fees associated with connecting to the punchout system.
  • Maintenance cost: There is also a cost associated with maintaining punchout integrations. Businesses will need to keep their eCommerce store and punchout system up to date with the latest changes.
  • Limited flexibility: Punchout integrations can also limit flexibility. Once businesses have set up a punchout system, they may be limited in how they can change it. For example, businesses may be unable to add or remove products from their punchout catalog without changing the entire configuration.
  • Punchout integrations offer many benefits to businesses, but there are also some costs and disadvantages that businesses should be aware of. Businesses should weigh the pros and cons carefully before deciding if punchout integration is right for them.

What are PunchOut vendors?

These are parties that provide e-commerce agencies, suppliers and organizations attractive PunchOut programs and catalogs for use, in some cases some form of long term partnership might be formed.

What ecommerce products does virto commerce offer?

Virto Commerce's ecommerce platform product line includes both a ready-to-run SaaS version that is hosted and deployed for immediate use and a version for custom-built deployment in Azure, AWS, Alibaba cloud, or on-premises. For any business environment, customers can choose a special Virto Start version which would be installed and customized under the supervision of the Virto Professional Services team.

For customers interested in punchout integration with an ecommerce website, Virto offers a proven API-based solution in cooperation with TradeCentric as a partner.

How to create a punchout catalog:

Creating a punchout catalog with a provider usually requires a few steps:

1. First, you need to create an account with the punchout provider of your choice. 
2. Once you have created an account, you will be able to create your punchout catalog. 
3. To create your punchout catalog, you will need to provide basic information about your company, such as your company name, address, and contact information. 
4. Once you have provided this information, you can choose the products you want to include in your punchout catalog. 
5. After selecting the products you want to include in your punchout catalog, you will need to provide punchout instructions to your customers. 
6. Once you have provided punchout instructions to your customers, they can access your punchout catalog from their ERP system and order the products they need.
 

What is a punchout ordering system?

A punchout ordering system is an ecommerce app that allows businesses to streamline their purchasing process by integrating with their existing accounting and procurement software. This integration enables businesses to automate their ordering process, reducing the need for manual data entry. Punchout ecommerce systems typically offer a wide range of features and benefits, including managing multiple supplier catalogs, creating purchase orders, and tracking spending.

What is a dropout item?

This is an item that was originally seen within the buyer's e-procurement application that is connected to the supplier site. When the buyer decides to buy the product, a request is sent through the procurement system for approval. When approved, the buyer initiates an order and often continues to the supplier site for final purchase.

Would we need separate punch-out catalogs for direct B2C, B2B, and B2G?

No, when you have a punchout catalog, there is no need to create a separate punchout for direct B2C and B2B because the technology synchronizes the data moving to and from the ecommerce application. In other words, your ecommerce application is used for all direct B2C, B2B, or B2G e-procurement punchout orders.

What types of procurement systems can be integrated?

There are three kinds of integration available for procurement systems. Examples are SAP Aruba, Oracle, and Peoplesoft. The types of procurement systems are as follows:
  • Standard e-procurement is a resource planning application such as the management module in the SAP ERP system.
  • Add on e-procurement: this is usually attached to an ERP system to improve its functionality, such as "Supplier Relationship Management,"
  • Cloud-based e-procurement: this is a service that integrates with most systems, is able to get data from e-commerce platforms and other sources, and is the most versatile of integrations.

What is a CIF (Catalog interchange format) File?

A CIF file is not entirely a punchout but is a common data format used in the punchout process. It represents product data uploaded into a buyer’s e-procurement system. Unlike regular punchout, it has to be operated manually.

What is level 2 punchout?

A level 2 punchout catalog gives purchasing organizations a way of searching for products to purchase within their e-procurement application without having to go to the supplier's website directly. The buyer searches for an item in their own application. If there is a level two catalog within the application, the product in the supplier's punchout catalog site matching the search result would be displayed. If the buyer wants to place the final order on the product, the application will redirect the buyer to that product page on the supplier's site. A level two punchout gives the suppliers increased visibility and visits to their catalog.

Who is the preferred punchout vendor for integration with the Virto Commerce online marketplace and ecommerce platform?

Virto Commerce cooperates with the TradeCentric team to deliver this integration solution to the customer. TradeCentric's unique position at the intersection of ecommerce and e-procurement makes it the perfect partner for businesses looking to connect, automate and scale their digital trading capabilities.

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Oleg Zhuk
Oleg Zhuk
linkedin icon Technical Product Owner