A Commercial Transaction

It would not be possible to build a complete marketplace in one chapter. Indeed, such a solution needs to be very flexible and support many activities ”from procurement to payment to shipping to much more.

Figure 7.1 illustrates how a company can buy goods from another electronically .

Figure 7.1. A transaction means several interactions and just as much paperwork!

The transaction includes the following steps:

1. The buyer (GoodBuy) issues a purchase order.

2. The supplier (GreatProducts) checks the purchase order. It could approve or reject it. Not rejecting it is typically taken for approval.

3. GreatProducts manufactures the goods and delivers them through a shipper (NiceTruck).

4. GreatProducts invoices GoodBuy.

5. After receiving the goods and checking the invoice, GoodBuy pays GreatProducts.

This example has many simplifications , and many options are not covered in it. For example, it does not show how the two organizations start their relationship: typically terms and conditions must be agreed upon, including payment terms.

Furthermore, it hides the relationship between the shipper and the bank. Typically, the shipper issues bills of lading, packing lists, and its own invoices.

Also, payment can be electronic, by check, or by other means. In the U.S. checks are very popular, but other countries have different preferences. For example, in Belgium, most payments are by direct transfer between accounts.

Finally, this scenario applies to goods but doesn't cover services.

As you can see, there are probably as many variations as there are businesses, and a good e-commerce product accounts for these variations. In this chapter, we will concentrate on a few steps in the transaction, which clearly illustrate how to use XML (see Figure 7.2).

Figure 7.2. This chapter concentrates on ordering and invoicing .