CHRIS: Then there can be things like the total combined cost of the order needs to be this amount and you get this much of a discount. You can place these items for order, but we're not sure that you're going to get this discount because they're dependent on other people who said they're going to purchase, but they haven't purchased yet. So coordinating all of these details among the members, this is ultimately the responsibility of the buying group.
To some extent, it's the same idea as an auction, but it's effectively, “If all of the members can get to this certain quantity, then they win the auction of getting these discounts.” And we're trying to coordinate everyone through this buying group so that they can get the most discount possible while still getting the items fulfilled in the timeline that the majority, if not everyone in that group purchase, needs them buy. We're trying to leverage those factors and optimize within those. So there's a lot more detail to hard and soft stops.
There's a lot around notifications, a lot around getting participation because, again, a lot of people are just super busy, and we want to be intelligent about how often we notify them. We don't want to be a nuisance. So if we can see that, like you were talking about earlier on, they keep putting a certain item into their basket, into their cart, but they're not checking out. Then maybe they're a good candidate for receiving a notification email that, “Hey, this is a big potential discount if everyone participates, and here's the time limit for the deal.” So that's pretty interesting, too.
This ultimately ties into bulk purchasing options, including those like manufacturing group purchasing organizations. The idea, again, is that we need to be able to present the different price breaks. This can be really easy to understand conceptually, but logistically extremely complex to implement. I mean, think about it. Where are you getting all this data from? Do you have all of it precisely and accurately in your ERP? If so, that's great. Are you keeping it up to date? If so, that's awesome. We can just integrate it and we're done.
A lot of our clients that are buying groups, group purchasing organizations, they don't necessarily have all of the data. They have a lot of it for certain vendors, but some vendors don't do a very good job of normalizing their data, and they actually just don't really have it anywhere in a data format. It might be like PDFs and things like that.
You're probably going to have a spectrum of participation with regards to standardized data. So we're going to want to collaborate and figure out how you want to bring that data in that isn't standardized. And you know what the model is going to be for that as well. So that's really where the integration comes into this, is being able to seamlessly and consistently bring in that data despite the data format that is sourcing from.
RON: Yeah, that sounds good. I'm going to give just one real-world example of a hard and soft stop. I'm going to end up showing one on the screen before we go to our last section here. So the one hard stop that I think almost everybody has seen many times, every time you go to Costco, what happens when you go to buy a bottle of Heinz ketchup? You go to pick it up and it's in a pack of two. That's a hard stop. You can't buy a [single] bottle of ketchup. And that's part of the negotiation with the distributor that's selling the Heinz ketchup. They made that discount for Costco so Costco could sell it to their buying group for that discount.
The hard stop was, “I tell you what, I'll give it to you cheaper if you buy our two 7000-ounce bottles of ketchup. Make everybody buy these huge ketchups. They're going to last in our house for three weeks. but for other houses, for two years! That's a simple hard stop.
On the screen here I'm going to put up a screenshot of a soft stop. This is for one of our clients that sells pool parts. And in this particular screenshot, one of the deals that Hayward came up, Hayward came up and said, “Hey, if we're going to offer this, we're going to sell it in lots of 100. You have to buy 100 units from us at any given time because most of our stuff weighs enough that the FedEx, UPS people can't deliver this. This is a LTL trucking and it's got to be on a pallet. It's very costly. So you have to buy 100 units.
As you can see on the screen here, this could be a hard stop. You have to buy in quantities of 100 or you cannot buy. But as you see here on the screen, it's got a section that lets you know that you haven't hit the 100 limit. And if you haven't hit the 100 limit and you don't want to buy 100, then you can pay a $50 fee, and then we'll go ahead and that's what it's going to cost. And so that's a soft stop. We're going to stop your purchase, give you a requirement that you need to surpass or agree to to continue this purchase.