The following article was prepared by Mike Taylor, C.P.M. for distribution to NAPM affiliate newsletters. 


E-Commerce Cataloging

One of the issues you will have to decide when implementing an E-Commerce solution is "Who will keep the order catalog?". Seems like a mundane question, but catalog location and maintenance is one of the significant differences between various E-Commerce suppliers and software.

The printed catalog we get in the mail from Book-of-The-Month club is an example of a supplier owned and maintained catalog. Any order we place uses the new prices, changed descriptions, added items, updated shipping charges, etc. The advantage to us is that we don't have to try and keep track of the changes, when the new catalog shows up, we can just throw away the old. The advantage to the supplier, is that they can control their own business by stocking and selling what they want at whatever price they want to propose.

Our weekly grocery list is an example of a customer owned catalog. We decide what is on the list, and are responsible to keep it current. If the kids want a different breakfast cereal we have to make the change to the list before going shopping or run the risk of buying something no longer wanted. The list may also include a target price. "We'll buy Tofu only if it is on sale at less than $1.00 per pound. etc" The advantage to us is that we decide what to purchase and can use any distributor.

The buyer and seller could also hire a third party to keep and maintain the catalog. The "Taste of the Northwest Restaurant Coupon Book" is a simple example of a third party catalog. We pay for the coupon book, the restaurant pays to have coupons included and the book producer is responsible for getting the descriptions correct, making changes, advertising, etc. Does the added purchase price of the coupon book pay for itself? In this case the answer is obviously yes, or else we wouldn't buy it and the restaurants wouldn't participate.

Each of these three catalog systems solves issues like: maintenance of descriptions; item price; accuracy; administrative effort; preparation cost; distribution to customers; responsibility for mistakes; numbers of items to be included, in a different way.

When setting up an E-Commerce solution for your company, the catalog decision will be based on factors such as numbers of internal customers, numbers of items on the contract, pricing method, risk of errors, flexibility, etc.. Your decision about cataloging also makes a difference in the E-Commerce software you purchase as well as impact the options you have in contracting with your suppliers. Of course all of the other E-Commerce issues, (electronic communication, computer compatibility, user interface, etc.) will also affect the catalog decision. It shouldn't be a surprise that each Electronic Commerce company has recommendations and alternatives for handling the catalog issue.

As a buyer you have the opportunity to research this subject and make sure that catalog maintenance is part of the E-Commerce planning and purchasing process. This is not a decision you want to make by accident. You can start the collecting facts by discussing catalogs with various E-Commerce facilitators. A partial list of E-Commerce facilitators is at www.mltweb.com/ecref.htm.


 

MLTWEB is assembled and maintained by Michael L. Taylor, C.P.M. 
Materials and articles prepared by Mike may be shared for purchasing education provided that this source is cited and no fee is charged. The rights for any other use are withheld.
Copyright;  Michael L. Taylor, C.P.M.
Last Updated: 02/26/2012