Online procurement is no longer the hot topic of the week or a ‘nice to have’. It has now become essential for a business to have an online presence, and for their target and existing customer base to be aware of and take note of their offering to the customer. Online trading has allowed businesses to relook traditional processes and how they trade with their customers and suppliers, and has allowed for a more streamlined and integrated process.
Online procurement has become just as important to the customer as it has changed the way they trade with their suppliers, and gives the customers instant access to supplier information. Customers can access accurate and up-to-date product information and use this information to raise purchase requisitions and purchase orders. Purchase orders can also be submitted to the supplier with a much faster turnaround time as the online environment provides a direct route to the supplier.
Technology, in terms of devices, has also changed the landscape for online trading as users can access the internet from almost any communication device and are not only restricted to desktop computers. Mobile devices such as tablets and smart phones are now used to access procurement portals. This is just another reason why an online presence for your organisation is so important: your connection to the customer is no longer Monday to Friday, 08:00 to 17:00, but is now 24/7.
Online procurement can be split into two different relationships of trade: B2C (Business to Consumer) and B2B (Business to Business). Each one of these relationships speaks to a different audience and consumer. B2C is retail focused, based on the consumer you will usually find in your brick and mortar store, as well as being focused on price and fulfilling the consumer urge. B2B is your business account consumer, focused on value, service and trust, and on supplying other businesses for their procurement needs.
It is important that you identify the correct eCommerce relationship that your company provides. It is possible that your company will not only have the requirements to provide one specific relationship, but you could find that your company provides both. This is mostly dependant on the type of product or service you provide and who your target market is.
Companies are constantly looking at how they can do procurement more efficiently and how they can improve on the procurement process. Companies are opting for online procurement portals that serve as a central point of integration or provide access to multiple suppliers and vendors. Not only does this create a central point of access for the vendors and suppliers, but in most instances it allows the customer to integrate the platforms with their existing internal procurement or ERP solution to streamline the financial and operational aspects. This also ensures that purchase orders are executed and processed against a predetermined set of rules and processes.
As a vendor or a supplier of goods it could be very beneficial to your business to embrace the various platforms that your customers are using, as this could lead to getting more business. The more platforms you are listed on as a vendor, the more exposure you will enjoy as customers are usually looking for more suppliers, and it is usually easier to on-board a supplier or vendor that is already trading on the respective platform.
One of your main concerns could be the cost that is involved in being a listed vendor. This is understandable as this could start affecting your gross profit. The good news is that most of the time the cost is calculated on the transaction volume and the service provider will usually charge you a small percentage of the value of the transaction you have received. Other service providers will charge you an annual flat fee. It is important that you also look at the bigger picture and see how much potential business you might get from being listed as a supplier or vendor on the platform.