A Simple Guide for B2B eCommerce and Procurement
Your customer asks, “Do you support PunchOut?”
Your procurement team says they need a PunchOut catalog.
Your implementation partner starts talking about cXML, OCI, procurement systems, and integrations.
And suddenly you’re wondering: What exactly is PunchOut?
If that’s you, you’re not alone.
Despite being widely used in B2B commerce, PunchOut is one of those technologies that many people use without fully understanding. The good news is that PunchOut is much simpler than it sounds.
In fact, most people understand the basic concept within a few minutes of explanation. The challenge isn’t that PunchOut is difficult—it’s that the industry often explains it using technical jargon instead of plain language.
So let’s put the jargon aside and explain PunchOut in plain English.
What Is PunchOut?
At its simplest, PunchOut is a way for a buyer’s procurement system to connect directly to a supplier’s online store.
Instead of shopping on a supplier’s website and then manually entering products into a purchasing system, PunchOut allows buyers to shop directly on the supplier’s website and transfer their shopping cart back into their procurement system for review, approval, and ordering.
Think of PunchOut as a bridge between two systems:
- The buyer’s procurement platform
- The supplier’s eCommerce website
The bridge allows the buyer to enjoy a modern online shopping experience while still following their organization’s purchasing process.
A Common Misconception About PunchOut
One of the biggest misconceptions is that PunchOut manages the entire purchasing process.
It doesn’t.
PunchOut is responsible for the shopping experience and transferring the shopping cart back to the procurement system.
The procurement system then takes over, handling approvals, budgets, Purchase Orders, and purchasing policies.
A simple way to remember it is this:
PunchOut handles the shopping experience. The procurement system handles the purchasing process.
Understanding this distinction makes it much easier to understand how PunchOut fits into the bigger picture of B2B purchasing.
Why Does PunchOut Exist?
Large organizations need purchasing to follow rules.
Employees may need manager approval before buying products. Budgets need to be monitored. Preferred suppliers need to be used. Purchase Orders need to be generated and tracked.
At the same time, suppliers want customers to enjoy the convenience of shopping online with rich product information, search, images, and contract pricing.
Without PunchOut, buyers often have to switch between systems and manually re-enter product information.
PunchOut connects the two worlds, making purchasing faster, more accurate, and far less repetitive.
Why Is It Called “PunchOut”?
The name comes from the idea that a user temporarily “punches out” of their procurement system to visit a supplier’s website.
After shopping, they return their cart to the procurement system to continue the purchasing process.
Although it feels like the user is moving between two separate systems, the experience is actually powered by an integration working behind the scenes. For the user, it feels like they’ve never left their procurement system.
How Does PunchOut Work?
The technical details can get complex, but the overall process is straightforward.
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The buyer starts in their procurement system.
They select an approved supplier or product category.
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A PunchOut session begins.
The procurement system securely identifies the buyer and connects them to the supplier’s online store.
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The buyer shops online.
They browse products, build a shopping cart, and see information that’s specific to their organization, such as contract pricing or approved product catalogs.
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The shopping cart is returned.
Instead of checking out on the supplier’s website, the buyer sends the shopping cart back to their procurement system. The procurement system recreates the cart and prepares it for review.
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Purchasing continues.
The procurement system routes the request through any required approval workflows. Once approved, a Purchase Order is generated and sent to the supplier so the order can be fulfilled.
It’s important to note that while the PunchOut session ends when the shopping cart is returned, the procurement process continues until the order has been placed and, in many cases, through invoicing and payment.
A Real-World Example
Imagine an employee needs to order safety gloves.
Without PunchOut, they might search a supplier’s website, copy product information, paste it into their procurement system, submit it for approval, and hope nothing was entered incorrectly.
With PunchOut, they simply launch the supplier’s online store from their procurement system, shop as they normally would, and return the shopping cart for approval.
Once approved, a Purchase Order can be automatically generated and sent to the supplier.
No copying and pasting. No re-entering product information. Just a smoother, more efficient purchasing process from start to finish.
What Are the Benefits of PunchOut?
Benefits for Buyers
PunchOut helps buyers:
- Reduce manual data entry
- Improve purchasing accuracy
- Enforce purchasing policies
- Access negotiated pricing
- Simplify approvals
- Improve visibility into spending
Benefits for Suppliers
PunchOut helps suppliers:
- Increase online order adoption
- Reduce order errors
- Strengthen customer relationships
- Support contract pricing
- Improve customer experience
- Reduce administrative workload
For many suppliers, supporting PunchOut has become a requirement for doing business with larger organizations.
Final Thoughts
Despite its unusual name, PunchOut is actually a simple concept.
It connects a buyer’s procurement system with a supplier’s online store, allowing buyers to shop online while remaining connected to their organization’s purchasing process.
For buyers, that means fewer manual tasks and better purchasing control.
For suppliers, it means a better customer experience and more efficient order processing.
Once you understand that PunchOut connects shopping with purchasing, the rest of the procurement process starts to make much more sense.
Want to Learn More?
This article covers the fundamentals, but there’s much more to explore.
In our Ultimate Guide to Understanding PunchOut, we dive deeper into topics like:
- Procurement systems
- PunchOut catalogs
- cXML and OCI
- Endpoints
- Purchase Orders
- The complete procure-to-pay process
Whether you’re new to PunchOut or planning an implementation, it’s the perfect next step.
