Purchasing Model Summary

These two supplier and trading partner purchasing models offer different advantages. With the basic model, suppliers can have reduced overhead because they do not need to build and manage a Web site for remote shopping. On the other hand, because it is entirely up to the customer to display the supplier's products on a Web site or another type of buyer application, the supplier is no longer in control of how their products are presented, and whether they are presented in the complete context of the associated support and services. For example, customers might display similar products from different suppliers side-by-side, emphasizing price differences and thus suggesting that the products are nothing more than commodities.

With the remote shopping purchasing model, the supplier incurs higher overhead because they must build and maintain a Web site through which product information is provided. However, because this Web site is in their control, they are able to promote their products and associated services, helping to prevent customers from making purchasing decisions based solely on price. Depending on how much of the shopping experience is pushed back to the supplier's Web site, the trading partner's Web site or procurement application could be simplified. In the extreme, it might just contain links to each supplier's site, perhaps with a high-level description of the type of products offered.

Many suppliers will want to use the remote shopping purchasing model, regardless of the increased cost, because it offers them the following advantages:

The supplier remains in control of the detail shown for their products, and can include images, detailed descriptions, and so on.
The supplier can provide better product configuration because they can customize their own Web site as required for their products. Often, they have this rich functionality anyway, for use on their retail Web site.
The supplier can retain and exploit their brand name, which, depending on the brand, can be worth a lot.
The supplier can provide a personalized shopping experience by remembering customers from previous visits, customizing content according to their preferences, and so on.
The supplier can make sure their product information is current with respect to such factors as price and inventory, reducing their dependence on the catalog upload frequency supported by a particular trading partner.

In any event, the purchasing model chosen by a particular trading partner/supplier pair needs to be negotiated. From the perspective of the customer, who initiates a purchase, the systems run by the trading partner and the supplier need to work as one integrated system.

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