Facing the Giant

The news stories stating that Amazon is on a mission to take over B2B ecommerce in the distribution industry have been increasing since the giant released Amazon Business. We’ve read those stories, too.

It’s an appetizing arena for Amazon, B2B is a multi-billion-dollar pie and they want to gobble up their slice.

Should the competition just give up?

Absolutely not.

Dealers need to stay sharp, this is not a time to be complacent. How are you going on the offensive in the light of the potential encroachment? Some lines of action come to mind; we’d like to hear how you plan on responding or if you are staying the course and not altering an already positive go-to-market strategy.

You can focus on the value proposition you already bring to your customers. And work to strengthen it: top-level customer service, convenience, loyalty programs, trusted technology partners, etc. Dealers can “out-Amazon” the competition with a passion for treating their customers like gold. They are the precious commodity.


The number of SKUs Amazon Business offers is over 10 million. We’ve heard of an interesting approach to using this immense breadth of inventory to your advantage. Look at it as an opportunity to use Amazon as a wholesaler option. Do the research to ensure you get acceptable margins, as a dealer you already meet the requirements of a FEIN (IRS tax ID #), and can make the minimum dollar purchase or pieces required. Wholesale sourcing at a discount by buying in bulk from Amazon is an approach worth exploring. Some businesses add to their supply chain by leveraging Amazon’s MCF (Multi Channel Fulfillment) option to fulfill orders from their own website.

Begin strengthening your technology efforts. Being shrewd and knowledgeable about advancements in technology, combined with your business know-how, will propel you to making positive decisions to transform your business.

Are you willing to make changes if necessary? The attitude and passion you bring to learning new and different approaches will benefit you as we face the future, even help you invent it for yourselves.

Why Offer Punchout?

In a previous DealerCloud post we talked about EDI (Electronic Data interchange) vs. cXML (commerce eXtensible Markup Language). We’re back to sing the praises of the B2B punchout, one of the ways cXML shines. An online experience is stronger when a dealer’s eCommerce site uses technology to simplify a complicated workflow. And that’s exactly what the punchout website does.

The punchout process takes your customer from your site’s shopping cart to a supplier’s website, lets them shop around and create a customized product, then returns them to YOUR e-procurement site and places the customized item into YOUR site’s shopping cart. Your customers expect to easily buy online at their businesses with the type of smooth buying experience they have online at home. Punchout manages interactive communication sessions over the Internet from one website to another, enabling a seamless transaction.

Let’s look at punchout in action.

cXML is used to punchout in scenarios other than out from a dealer’s eCommerce site to a supplier catalog (such as HON Office Furniture, Konica Minolta and others).

A dealer’s customer can enter the eCommerce site through HTTP, create a shopping cart, then when it’s confirmed/checked-out, return to the customer’s ERP system URL, for example SyQuest, People Soft, or TriMega. Or, the dealer’s customer can enter the ERP with a Purchase Order using cXML (post to VibeNet URL, for example), VibeNet will return a response to customer’s ERP system.

As B2B eCommerce continues to grow – we hear it’s continuing to trend; sales will top $1.1 trillion in the US by 2020 – you might want to consider offering your customers the best online experience with punchout.

Auto Replenishment and the IoT

By now most of us are almost blasé when our household devices connect to the Internet. From thermostats to speakers and TVs, even our scale is connected. As businesses explore this technology, making use of it while keeping it secure and reliable, the benefits to dealers are not totally futuristic but could be leveraged in the present.

A few years ago Amazon CTO Werner Vogels announced the Amazon Web Services IoT (Internet of Things), a platform for processing and using data from Internet-connected devices. While onstage, Vogels demonstrated a basic example of the new product in action—each hand sanitizer dispenser at the 19,000 person conference was constantly sending back its status to a central location, letting the conference staff know when one needed more soap. This platform is available to any company willing to tap into the cloud with AWS.


Does the IoT solve an auto-replenishment problem by creating an efficient, cost saving technology that can also drive sales?

For the B2B dealer it could help by managing inventory that currently requires staff resources and human accuracy. You might be ahead of the game if business partners offered auto replenishment that combined cost savings and increased sales. For example, hospitals have connected medical devices that can replenish supplies before they’re at the critical point. This is an obvious benefit to patients and medical staff.

But does it drive sales?

In a B2B marketplace, vendors and manufacturers who offer IoT auto replenishment are providing a convenience and efficiency and that could promote sales and loyalty. Your customers would come to depend on having their favorite products always on hand. Auto replenishment could remove the “shopping around” element of online purchasing. Instead of making purchases somewhere else, the dealer who offers convenience could be rewarded with loyalty. We see this with the Amazon Dash Button that connects directly to your Amazon Prime account. At the touch of a button the item is reordered and sent to your home in a matter of days. At the conference we talked about earlier, blank buttons were given to developers to program and innovate with, only limited by their imagination.

It wasn’t so long ago that the IoT seemed beyond comprehension or even useless. Now it’s part of our everyday lives. Dealers who innovate and are ready for change can decide how to move forward. The first step might be to find a trusted vendor who understands the industry and then work together to find their best solutions.

Are you ready?


EDI vs. cXML

Many years ago (I decline to admit how many!) I often overheard our EDI (Electronic Data Interchange) expert in a nearby office cubicle as she supported multiple dealer transactions. The conversations were highly technical with a level of heightened urgency. She focused on keeping the dealers’ business transactions flowing without any bumps or lag time.

Is EDI still relevant to the independent dealer today or is it being overtaken by cXML?

EDI was created to allow businesses to exchange paperless information with their trading partners. The American National Standards Institute (ANSI) is a governing body that defined and developed a common format called EDI x12 . Because EDI adheres to strict standards and definitions of these documents; purchase orders, invoices, advanced ship notices; the transactions are very predictable and reliable. Each document is assigned a three-digit number, like 850 for purchase order, 810 for invoice, etc. The documents have agreed upon segments and elements that tell the business partners what they’re sending, usually through FTP (File Transfer Protocol).

It’s all very structured and consistent. Many industries trust EDI with their financial transactions.


In comparison, cXML (Commerce eXtensible Markup Language) can appear like the Wild, Wild, West. It was created by Ariba in 1999, so it’s not all that new. In cXML there isn’t a governing body for standards. The Internet allows a shift to the future where “anything goes” — which opens the door to many possibilities. One of those that dealers can harness are powerful punch-out catalogs on their e-commerce sites. cXML software opens a catalog seamlessly on another website and lets your customers select items that go into your Webstore’s shopping cart; that’s an example of harnessing the exchange of information in a less structured way.

It isn’t nostalgia that keeps EDI around. Lillian Yeh, CEO of Thalerus Group, calls it, “the greatest idea ever.”

The loyal EDI doesn’t appear to be giving up for the “new” kid on the block. It’s about knowing what tool is right for the job.