Buying direct-from-manufacturer and from e-marketplaces is on the rise, according to the UPS 2017 Industrial Buying Dynamics Study. In Europe in 2017 over 90 percent of industrial buyers are purchasing directly from manufacturers – a 27 percent increase over 2015, when UPS last surveyed these buyers. The study also shows buyers are now spending more of their budget with manufacturers: direct-from-manufacturer sales now account for 44 percent of customer spend in Europe.

“The story of industrial buying in 2017 is a story of disruption: direct and online models of commerce are supplanting old established buyer-distributor relationships,” said Kiel Harkness, marketing manager, UPS UK. “Whether it is buying direct-from-manufacturers or e-marketplaces, the traditional intermediary is under pressure everywhere – and online information and transaction capability are the great drivers of this change.”

Improving post-sales service

How can industrial sellers capture this shifting demand? The single biggest factor, according to the UPS study, is improving post-sales services, as 86 percent of industrial buyers now expect post-sales services from their supplier, an eight percent increase from 2015. While an effective returns process is the most important post-sales service, buyers also expect a much wider range of services, with on-site maintenance and repairs being the most important for 70 percent of respondents. In fact, post-sales services help suppliers increase their customer loyalty and profitability, as 55 percent of respondents indicated a willingness to switch suppliers due to post-sales services.

Buyers also expect faster delivery. Two in five buyers say they need same-day delivery for at least a quarter of their industrial orders, and 60 percent say they typically need delivery for all orders within 48 hours or less.

 “Those companies that recognize the changing patterns of industrial distribution will retain customers and expand into new markets,” said Harkness. “That means offering user-friendly sales channels, investing in their supply chains, and recognizing the importance of post-sales services.”