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UPS B2B 
purchasing insights: 
Behaviors, preferences and perceptions 
of industrial supplier performance
Introduction 
Industrial distribution, once dominated by family-owned companies built on generations of personal relationships, has 
undergone a quiet but dramatic renaissance. Vendor reduction initiatives, widespread mergers and acquisitions and the 
inevitable growth in online selling have intensified competition for available dollars. 
The UPS B2B Purchasing Insights Study, conducted in partnership with research firm TNS, is designed to shed light on 
factors driving the purchase decisions of those who buy or influence industrial supplies purchases. Touching on both 
current and intended purchase behaviors, the study offers distributors a glimpse into their competitive position in the 
marketplace as well as potential areas for growth. 
n=302 
n=197 
n=104 
n=82 
n=81 
n=66 
n=61 
n=63 
n=53 
n=42 
n=47 
n=31 
n=29 
n=10 
n=333 
General Manufacturing/processing 
Contractor/service Provider 
Residential Construction 
Commercial Construction 
Hospital/healthcare 
Automotive 
Energy 
Government/military 
Hospitality 
OEM (Original Equipment Manufacturer) 
Utilities 
Aerospace 
Machine Shop 
Mining 
Other 
13% 
20% 
7% 
5% 
5% 
4% 
4% 
4% 
4% 
3% 
3% 
2% 
2% 
1% 
22% 
industry base 
Buyer 
Commodity manager 
Contract manger 
Maintenance manager/supervisor 
Materials manager 
owner/principal 
Procurement manager/director/officer 
Purchasing manager/director/officer 
Sourcing manager/director/officer 
Supply Management director/supply chief 
Other 
n=101 
n=60 
n=100 
n=176 
n=92 
n=533 
n=100 
n=146 
n=23 
n=58 
n=112 
7% 
4% 
7% 
12% 
6% 
36% 
7% 
10% 
2% 
4% 
7% 
career base 
UPS B2B Purchasing Insights Study | April 2014 2 
Methodology 
TNS conducted an online survey of 1,501 
industrial supplies purchasers in December 
2013. Respondents included sole/joint 
decision makers or strong influencers of 
sourcing and purchasing decisions. 
Survey respondents purchase catalog or 
stock-type products (not custom-made 
items) from a predefined list of product 
categories representing a wide range 
of industries. Purchasers with annual 
spending levels on industrial products 
of less than $50,000 (n=680), $50,000 
to $250,000 (n=504), and more than 
$250,000 (n=317) were included in the 
study. Factors such as age, tenure as a 
buying professional and size of supply 
base were also studied. Demographic 
differences are provided where the 
findings were significant and useful. 
career 
experience 
23% 
33% 
3% 
40% 
Less than 1 year 
1-5 years 
5-10 years 
More than 10 years
Executive Summary 
The UPS Purchasing Insights study, a broad view of the industrial supplies buyer’s 
mindset, studies customer perceptions across five key factors of the purchasing process. 
Key factors of purchasing process 
Researching and Selecting Suppliers 
Purchasing 
Website Features and Functions 
Delivery and Returns 
Post-sales Service and Support 5 
Researching, selecting and purchasing behavior are in transition 
As expected, factors considered important in choosing a supplier and making a purchase 
are dominated by enduring features such as product quality, availability and price, 
followed closely by shipping, delivery and returns capabilities. Yet, it’s interesting 
that only half of purchasers say having a catalog and having a sales representative are 
important to their supplier decisions. That is not to suggest that catalogs and sales 
representatives aren’t important to the purchase process, because they are, but it does 
signal that the wants, needs and actions of industrial supplies buyers have taken a 
noticeable turn. 
Readers may be most surprised to learn how quickly web-based research and 
purchasing has grown, with more than half of buyers now making some of their 
purchases online. One-third of buyers spend most of their budgets online. Buyers report 
that the majority of their suppliers have websites that offer online ordering. And, it 
can be argued that e-commerce is having an impact on buyer-supplier relationships -- 
34% of buyers say they’ve gone outside of their existing supply base to make an online 
purchase with a new vendor. For suppliers, finding strategic ways to be in the right 
place at the right time is the key to retention and growth. 
But perhaps one of the most unexpected findings is how very satisfied buyers are with 
their current suppliers’ capabilities in all the areas they consider most important to the 
supplier selection process. This is great news for distributors in good standing with their 
customers, and perhaps concerning to those looking to expand a customer base. 
UPS B2B Purchasing Insights Study | April 2014 3
But perhaps one of the most unexpected findings is how 
very satisfied buyers are with their current suppliers’ 
capabilities in all the areas they consider most important 
to the supplier selection process. This is great news for 
distributors in good standing with their customers, and 
perhaps concerning to those looking to expand a 
customer base. 
A common need - integration 
Taking a big picture view of the findings reveals a common thread: the capabilities 
buyers rank most important require greater integration of a seller’s systems and 
processes – inventory, shipping and returns – in order to provide a more competitive 
and satisfying customer experience. For example, data suggests that offering real-time 
product availability, negotiated pricing and shipping costs into the online purchase 
experience may help to fill a need for many buyers. 
The results that follow help to reveal windows of opportunity for distributors seeking 
to retain and even grow their businesses. The findings suggest that suppliers who 
are not yet meeting their customers’ purchasing demands must act quickly to remain 
competitive and grow. 
UPS B2B Purchasing Insights Study | April 2014 4 
Inventory 
Shipping 
Returns
Factors Affecting Supplier Selection 
Selection criteria 
While the vast majority of buyers rank product-related features as important when selecting a supplier, more notable is that 
delivery and returns capabilities, along with the ability to buy on a supplier’s website, are important to more buyers than 
having a sales representative and having a printed catalog. 
The findings presented ahead show that sales representatives and catalogs are still important and relevant to the supplier 
research process, but the data does signal a shift toward less traditional methods of research. 
Diving more deeply into the selection requirements shows that more higher-spending buyers assign importance to 
supplier websites, sales representatives, catalogs and added-value services. They also rely more on word-of-mouth 
recommendations from coworkers and peers. 
Figure 1: Important Criteria When Selecting Suppliers 
Base: All respondents - n=1,501 
How important are the following when deciding which industrial supplies vendors 
to purchase from? ? 
top -2 box 
25% 
26% 
24% 
42% 
41% 
39% 
36% 
31% 
34% 
70% 
66% 
63% 
95% 
93% 
92% 
91% 
84% 
80% 
78% 
75% 
74% 
71% 
70% 
69% 
69% 
59% 
58% 
56% 
* Respondents asked to rate “Extremely Important” attributes first 
followed by “Very important” up to a maximum of five attributes. 
Attributes randomly selected if more than five, prioritizing 
“Extremely Important” attributes. 
UPS B2B Purchasing Insights Study | April 2014 5 
25% 
27% 
31% 
28% 
34% 
38% 
37% 
34% 
35% 
35% 
35% 
33% 
34% 
32% 
32% 
31% 
39% 
Very Important 
Extremely Important 
23% 
36% 
41% 
50% 
61% 
Product quality 
Product availability 
Product price 
Delivery when products are needed 
Shipping costs 
Return policies and procedures 
Product catalog / product information on supplier website 
Contract / negotiated pricing 
Ability to make purchases on the supplier’s website 
Value-added services, such as repairs, training or technical support 
The supplier’s website overall 
Payment options 
Having a nearby physical location where I can purchase or pick up 
Word-of-mouth recommendations from coworkers or peers 
Having a sales representative 
Online reviews of the supplier 
Printed / hardcopy product catalog 
54% 
Higher spending firms place greater importance on suppliers’ websites, 
as well as traditional offline criteria, including value added services, 
sales reps and printed catalogs.
Supplier performance on selection criteria/attributes 
Buyers indicate their suppliers are performing very well on all the criteria important to selecting a vendor. No meaningful 
differences could be found among the three annual spending levels. 
At the same time, this raises a chicken or egg question. Are industrial suppliers, in general, performing well across the 
board? Or, are buyers choosing to work with vendors who better meet their needs on all these criteria? Regardless of the 
answer, the performance standard for suppliers is quite high, and it’s reasonable to assume that those who anticipate and 
meet buyers’ expectations stand the best chance of success. 
Figure 2: Supplier Performance on Attributes 
Base: Varied bases among those placing importance on each attribute* 
How well do your current suppliers meet your needs regarding those 
factors that are important to you? (Select one for each response) ? 
top -2 box 
61% 
64% 
65% 
58% 
58% 
57% 
57% 
53% 
61% 
56% 
65% 
55% 
55% 
58% 
37% 
32% 
36% 
35% 
35% 
35% 
39% 
31% 
34% 
25% 
34% 
34% 
30% 
98% 
96% 
95% 
94% 
93% 
92% 
92% 
92% 
92% 
90% 
90% 
89% 
89% 
88% 
UPS B2B Purchasing Insights Study | April 2014 6 
Very Well 
Extremely Well 
57% 
29% 
30% 
Product quality 
Product availability 
Having a sales representative 
Delivery when products are needed 
The supplier’s website overall 
Ability to make purchases on the supplier’s website 
Return policies and procedures 
Having a nearby physical location where I can purchase or pick up 
Product catalog / product information on supplier website 
Payment options 
Product price 
Printed / hardcopy product catalog 
Value-added services, such as repairs, training or technical support 
Contract / negotiated pricing 
Shipping costs 
86% 
Research methods - most used and most preferred 
More buyers choose websites and search engines to research industrial supplies purchases, and they’re also the most 
preferred methods. A majority of buyers are researching supply purchases via supplier websites (68%), and 52% are 
using search engines. 
Purchasers who prefer non-web based research – which includes everything from catalogs to independent reviews to 
technical articles – cite personal interaction and unbiased information as their reasons for choosing offline methods. As 
might be expected, buyers spending more than $250,000 annually on industrial supplies are much more likely to rely 
on sales representatives and catalogs for information. However, buyers in higher spending brackets may have greater 
access to sales representatives.
Given buyers’ high satisfaction levels with supplier performance on key selection criteria, and considering that web-based 
research is most preferred, it’s reasonable to infer that many buyers consider online research essential to their supplier 
selection process. The use of search engines means that suppliers may be at greater risk of losing share to companies whose 
products are perhaps easier to find, in stock or more competitively priced. On the other hand, suppliers whose products are 
easy to find online and meet buyers’ criteria may also stand to gain customers. 
Figure 3: Industrial Supplies Purchasers’ Research Methods 
Base: All respondents n=1,501 
What is your most preferred method for researching industrial products? (Select one) 
How do you currently research your industrial supplies purchases? (Select all that apply) ? 
most preferred 
research method 
Suppliers’ website 68% 30% 
Search engine results that take me directly to the product I need 52% 19% 
Suppliers’ print/hard copy catalogue 47% 11% 
Account / Sales Representative 43% 12% 
User reviews and recommendations 40% 12% 
Reviews from independent trade publications 29% 7% 
Technical articles or whitepapers from the product’s manufacturer 28% 5% 
Purchasing 
Purchasing online is the most used and most preferred method, but traditional methods endure 
Sixty-three percent of industrial supplies buyers purchase through websites, whether directly from suppliers or through 
a third-party provider, but use and preference for phone, fax and placing orders through sales representatives or emails 
remain strong. Across all purchase methods, the reasons cited were factors related to speed, ease and convenience. Those 
who prefer offline channels to make purchases cited personal interaction and the ability to get answers to order-related 
questions. Some participants noted company procurement policies dictated the purchase method they used. 
Figure 4: Important Criteria When Selecting Suppliers 
Base: All respondents - n=1,501 
Which of the following methods do you use to purchase industrial supplies? (Select all that apply) 
Which of these are your preferred methods to purchase industrial supplies? (Select up to TWO responses) 
? 
Purchase methods(s) Most preferred purchase methods(s) 
40% 
37% 
6% 
32% 
19% 
13% 
32% 
21% 
12% 
27% 
17% 
12% 
UPS B2B Purchasing Insights Study | April 2014 7 
6% 
30% 
38% 
50% 
26% 
41% 
54% 
33% 
46% 
63% 
59% 
20% 
57% 
2% 
(Net) Website 
Directly from the industrial supplier’s website 
Third-party website (e.g. AmazonSupply or Google Shopping) 
(Net) Phone or fax 
Phone or fax to customer service 
Phone or fax to a designated account representative 
(Net) In-Person 
In-person at the supplier’s physical location 
In-person during sales visit from account rep. 
(Net) Email 
Email to customer service 
Email to a designated account representative 
Electronic data interchange (EDI)
Looking at buyers’ projected purchase behavior in Figure 5, it’s fair to assume that the rate of online purchasing from 
supplier websites will continue to rise. 
Figure 5: Approximate Percent of Annual Spend Conducted on 
Suppliers’ Websites 
Base: Among supplier website purchasers; n=863 
Approximately how much of your annual spend on industrial 
supplies is conducted on suppliers’ websites? (Select one) ? 
How do you foresee the amount you spend on 
suppliers’ websites changing in the next few years? ? 
UPS B2B Purchasing Insights Study | April 2014 8 
14% 
31% 
18% 
36% 
Less than 25% 
25-50% 
50-75% 
75% or more 
39% 
4% 3% 
54% 
Spend more online 
About the same 
Spend less online 
Don't know
Most purchases are a combination of repeat and one-off orders 
The majority of buyers across all spending levels report making a combination of repeat and one-off purchases, 
indicating that suppliers may have ample opportunity to acquire new customers. Since buyers expect to increase 
their online purchases in the future, and a clear majority prefer to research supplies online, having robust e-commerce 
and Search Engine Optimization (SEO) and Search Engine Marketing (SEM) strategies are essential for suppliers 
seeking to add or potentially retain customers. 
Figure 6: Repeat Versus One-off Purchases 
Base: All respondents; n=1,501 
Which of the following best describes your company’s purchases of industrial supplies? 
(Select one response) ? 
(n=1,501) (n=680) (n=504) (n=317) 
Annual Spend on industrial supplies 
Total <$50k A $50k - $250K B $250k+ C 
5% 5% 4% 6% 
60% 58% 62% 62% 
The opportunity to gain or lose online customers is underscored in Figure 7, showing that 34% of buyers say 
they’ve gone outside their existing supply base to make an online purchase. Buyers spending less than $50,000 
per year are more likely to purchase online from a supplier with which they had no previous relationship. 
Figure 7: Pre-existing Offline Relationship with Supplier(s) for Online Purchases 
Base: Among supplier website purchasers; n=863 
Thinking about the industrial suppliers whose websites you currently purchase from, did you have an 
offline relationship with them before making your first online purchase with them? (Select one) ? 
Annual Spend on industrial supplies 
Total <$50k A $50k - $250K B $250k+ C 
UPS B2B Purchasing Insights Study | April 2014 9 
61% 
34% 
50% 
44% BC 
68% A 73% A 
27% 
22% 
5% 6% 5% 4% 
Yes 
No 
I don't know 
(n=863) (n=381) (n=303) (n=179) 
Letters indicate statistical 
significance at 95% 
confidence level 
35% 37% 34% 32% 
All or almost all of our puchases 
are one-off purchases 
We have a mix of repeat purchases 
and one-off purchases 
All or almost all of our purchases 
are repeat purchases 
(n=1,501) (n=680) (n=504) (n=317)
Supplier websites 
Online ordering has become table stakes; most buyers say half or more of their vendors offer 
website ordering 
For 67% of buyers, the ability to order through a supplier’s website is considered either very important (38%) or extremely 
important (29%). Buyers with larger budgets, and younger purchasers, assign the highest importance to online ordering. 
Buyers indicate that the majority of their suppliers offer website ordering. Again, it can be questioned whether the majority 
of suppliers actually offer website ordering or whether buyers have established more relationships with vendors who meet 
their expectations for that capability. Regardless of the explanation, the importance buyers assign to online ordering is high 
and worthy of supplier attention. 
Despite the growth in current and projected online sales, many industrial supplies purchasers still rely on traditional methods 
when researching and ordering products. It could be argued that the complexity of B2B purchasing, such as negotiated 
pricing and procurement policies, means that online buying is unlikely to completely replace all offline methods in the 
immediate future. 
Figure 8: Importance of Ordering from Supplier’s Website 
Base: All respondents - n=1,501 
How important is it that a supplier offer the ability to order 
products directly from its website? ? 
How many of your current suppliers offer the ability to 
order products directly from their website? (Select one) ? 
UPS B2B Purchasing Insights Study | April 2014 10 
29% 
38% 
26% 
7% 
Extremely important 
Very Important 
Somewhat Important 
Not at All Important 
30% 
39% 
11% 
16% 
1% 4% 
All 
Most 
About half 
Some 
None 
I don't know
Supplier website features and functions are apparently on the right track 
As seen earlier in the report, buyers on the whole are satisfied with their suppliers’ websites. In fact, 93% of purchasers 
report the websites they order from are the same or better than the consumer websites they use to make personal online 
purchases. The higher the annual spend, the more favorably B2B websites are viewed compared to consumer websites. 
Figure 9: Suppliers’ Websites vs. Consumer Websites 
Base: Among supplier website purchasers; n=863 
How do the industrial suppliers’ websites you use to make online purchases compare to the 
websites you use to make personal online purchases? (Select one) ? 
UPS B2B Purchasing Insights Study | April 2014 11 
7% 9% 
1% 5% 5% 
56% 
68% BC 
50% C 
40% 
22% 
18% 
24% 
26% A 
15% 
4% 
20% A 
29% AB 
Much better 
Somewhat better 
Same 
Somewhat worse 
Much worse 
(n=863) (n=381) (n=303) (n=179) 
Letters indicate statistical 
significance at 95% 
confidence level 
Annual Spend on industrial supplies 
Total <$50k A $50k - $250K B $250k+ C 
Online buyers appreciate website features that offer more insight into order cost and status 
Among buyers who purchase through suppliers’ websites, the ability to know shipping costs before ordering is one of 
the most mentioned benefits. Other frequently named benefits are real-time product availability, purchase history and 
delivery dates 
Figure 10: Benefits of Ordering from Suppliers’ Websites 
Base: Among supplier website purchasers; n=863 
What are the benefits of ordering from industrial suppliers’ websites? 
(Select all that apply) ? 
64% 
63% 
63% 
63% 
59% 
59% 
58% 
58% 
54% 
33% 
2% 
Ability to know shipping costs before ordering 
Ability to see real-time product availability 
Ability to view purchase history 
Ability to see estimated delivery date when ordering 
More convenient than phone or fax 
Ability to see very detailed product information 
Ability to easily make repeat orders 
Ability to see the most up-to-date product information 
Faster order processing 
Ability to see my negotiated pricing 
Other
Industrial supplies buyers do have a website wish list 
Earlier, we saw that industrial supplies buyers are very satisfied with their vendors’ performance. Buyers do see areas for 
improvement in the online buying experience, though. Specifically, having better visibility into real-time product availability 
is the feature buyers most want improved, and by a sizeable margin. Suppliers who fully integrate their e-commerce and 
inventory management platforms may have a competitive advantage here. 
Figure 11: How Suppliers’ Websites Could Improve 
Base: Among supplier website purchasers; n=863 
In what ways could the suppliers’ websites you use improve? ( ? Select all that apply) 
53% 
37% 
37% 
35% 
34% 
29% 
27% 
27% 
26% 
UPS B2B Purchasing Insights Study | April 2014 12 
20% 
5% 
Show real-time product availability 
Make it easier to find the products I’m looking for 
Show shipping costs before making a purchase 
Improve site navigation 
Show estimated delivery date when purchasing 
Make it easy to make repeat orders 
Offer online chat with customer service 
Show my negotiated pricing on the website 
Show detailed order history of past orders 
More up-to-date product information 
Other 
Those who buy through suppliers’ websites see some downsides, such as less personal service (57%), and more difficult to get 
answers to product or order-related questions (40%). It’s possible that buyers who have access to knowledgeable customer service 
representatives via online chat may possibly rely less on more traditional methods of purchase 
Figure 12: Drawbacks of Ordering from Suppliers’ Websites 
Base: Among supplier website purchasers; n=863 
What are the drawbacks of ordering from industrial suppliers’ websites? 
(Select all that apply) ? 
57% 
40% 
24% 
21% 
18% 
14% 
14% 
10% 
10% 
6% 
Less personal service 
More difficult to get answers to product or order-related questions 
My suppliers’ sites don’t show my negotiated pricing 
Not all payment options are available 
My suppliers’ sites aren’t updated regularly with latest product information 
My suppliers’ sites are difficult to navigate 
Harder to find the product(s) I need 
Placing repeat orders is difficult 
My suppliers’ sites don’t show the delivery date 
Other
Barriers to online purchasing 
Despite buyers’ satisfaction with suppliers’ websites, those who don’t buy online cite several reasons; top among them 
are those who simply prefer to buy through offline channels. Other reasons cited are related to the need for answers 
to product questions or pricing. In fact, since multiple reasons could be selected, some of the reasons are likely 
interrelated. While some buyers may remain more resistant to online buying than others, it’s reasonable to assume 
that satisfying the need for more detailed product and pricing information through online channels may help to migrate 
existing customers to online channels, or to help gain new online customers. 
Figure 13: Barriers Preventing Non-web Purchasers from Transacting on 
Suppliers’ Websites 
Base: Among non-web purchasers whose suppliers offer web purchases; n=626 
Which of the following prevent you from purchasing industrial supplies from 
suppliers’ websites? (Select all that apply) ? 
30% 
29% 
27% 
26% 
24% 
22% 
18% 
17% 
UPS B2B Purchasing Insights Study | April 2014 13 
12% 
10% 
9% 
3% 
Nothing prevents me, just prefer current method 
Need advice / information from knowledgeable sales person 
Product information is not detailed enough 
Pricing information is not detailed enough 
Difficult to find the products I need 
Shipping information is not detailed enough 
My contract / negotiated pricing is not available online 
Returns information is not detailed enough 
Suppliers don’t offer website ordering 
I can’t bill an online order to my account with the supplier 
Can’t use my preferred payment method 
Other
Shipping, Delivery and Returns 
Earlier, Figure 3 showed that the overwhelming majority of buyers indicate their suppliers are performing well on criteria 
related to shipping, delivery and returns. Digging deeper, Figure 14 below illustrates that a majority of all surveyed buyers 
see shipping and delivery factors as very important or extremely important in the purchase process. Buyers want to see 
accurate shipping costs (87%) and estimated delivery dates (85%) before they buy, and 85% indicate that it’s important to 
have discounted shipping for large orders as well as tracking information. 
These results underscore that buyers are looking for an integrated and seamless purchasing experience. Suppliers, in order 
to meet their customers’ needs and remain competitive, should make sure their online and offline purchasing systems are 
highly integrated with order management, inventory, e-commerce, billing and returns processes. 
Figure 14: Shipping and Delivery Experience 
Base: All respondents; n=1,501 
How important are the following aspects regarding the shipping and delivery of 
industrial supplies? (Select one for each) ? 
top -2 box 
Detailed, accurate shipping costs prior to payment 87% 
Very Important 
Extremely Important 
85% 
85% 
85% 
75% 
68% 
67% 
61% 
How important are the following when deciding which 
industrial supplies vendors to purchase from? ? 
25% 
27% 
31% 
28% 
34% 
38% 
37% 
34% 
35% 
35% 
35% 
33% 
34% 
32% 
32% 
31% 
39% 
25% 
26% 
24% 
42% 
41% 
39% 
36% 
31% 
34% 
70% 
66% 
63% 
Product quality 
Product availability 
Product price 
Delivery when products are needed 
Shipping costs 
Return policies and procedures 
Product catalog / product information on supplier website 
Contract / negotiated pricing 
Ability to make purchases on the supplier’s website 
Value-added services, such as repairs, training or technical support 
The supplier’s website overall 
Payment options 
Having a nearby physical location where I can purchase or pick up 
Word-of-mouth recommendations from coworkers or peers 
Having a sales representative 
Online reviews of the supplier 
95% 
93% 
92% 
91% 
84% 
80% 
78% 
75% 
74% 
71% 
70% 
69% 
69% 
59% 
58% 
56% 
UPS B2B Purchasing Insights Study | April 2014 14 
Estimated delivery date prior to payment 
Discounted / free shipping for larger orders 
Tracking information after payment 
The ability to choose different shipping options to meet my desired delivery date 
The ability to pay with my preferred shipping carrier account 
Batch shipping – all the products in my order arrive at the same time 
The ability to use my preferred shipping carrier 
37% 50% 
37% 48% 
35% 50% 
35% 50% 
36% 39% 
33% 35% 
34% 33% 
32% 29% 
Figure 1: Barriers Preventing Non-web Purchasers 
from Transacting on Suppliers’ Websites 
Base: Among non-web purchasers whose suppliers offer web purchases; n=626 
top -2 box 
Very Important 
Extremely Important 
23% 
36% 
41% 
50% 
61% 
Printed / hardcopy product catalog 
54% 
Returns policies are important to buyers 
At the opening of this white paper, Figure 1 showed 
that return policies and procedures are high among 
criteria considered important when selecting a 
supplier.
As shown in Figure 15, over half of buyers in the $250,000+ spending category indicate they make returns; 
29% say they return industrial supplies frequently (14%) or very frequently (15%). 
Figure 15: Frequency of Returns 
Base: All respondents n=1,501 
How often do you return industrial supplies that y ? ou purchase? (Select one) 
Letters indicate statistical 
significance at 95% 
confidence level 
Among those who make returns, pre-printed shipping labels top the wish list 
There are a variety of opportunities to make the returns process more streamlined and convenient, with the key needs being 
ease, speed, and flexibility. Most buyers who make returns (53%) think the returns process could be improved by including 
a pre-printed return shipping label with the original delivery. Forty-percent think the ability to handle all aspects of a return 
online would help. 
Annual spending levels do show differences in responses, however. Buyers with $250,000+ annual spend are more likely to 
choose handling all aspects of returns online while those spending less than $50,000 annually more often cite the ability to 
return products to a physical location. 
Figure 16: Improving Returns Process 
Base: All respondents who make returns n=1,339 
UPS B2B Purchasing Insights Study | April 2014 15 
Annual Spend on industrial supplies 
<$50k A $50k - $250K B $250k+ C 
5% A 
15% AB 
1% 
12% A 
14% A 
13% 
21% A 
24% A 
68% BC 
55% C 44% 
17% BC 
7% C 3% 
(n=680) (n=504) (n=317) 
Never 
Rarely 
Occasionally 
Frequently 
Very frequently 
A B C 
Which of the following would improve industrial suppliers’ returns processes? 
(Select all that apply) ? 
53% 
40% 
37% 
37% 
34% 
25% 
16% 
2% 
Pre-printed return shipping labels included with the original delivery 
The ability to handle all aspects of the return online using the industrial supplier’s website 
The ability to speak directly with a customer service representative regarding my return 
Faster delivery of replacement industrial products 
More flexible timeframes for making returns 
Ability to return products to a physical location 
The ability to make batch returns 
Other
Post-sales service and support could be a differentiator 
When buyers were asked whether having better access to post-sales service and support information online, such as product 
manuals and warranty information, would affect their willingness to purchase from a new vendor, 68% indicated that it 
would make them somewhat likely (50%) or much more likely (18%) to purchase from a new vendor. 
The influence of post-sales information appears strongest for buyers at higher annual spending levels, particularly at 
$250,000 or more per year, for which 82% are either somewhat more likely (50%) or much more likely (32%). 
The obvious implication is that for suppliers looking to gain new customers and retain existing customers, offering an 
enhanced level of post-sales information and support on their websites may be a competitive advantage. 
These findings also suggests that suppliers should not view their websites as merely online catalogs and transaction 
vehicles, but platforms to engage purchasers across the entire customer lifecycle. 
Figure 17: Post-sale Service/Support on Website’s Influence on 
Selecting New Supplier 
Base: All respondents n=1,501 
How much influence would these types of post-sale information and materials on a supplier’s 
website have on your willingness to do business with a new supplier? (Select one) ? 
Letters indicate statistical 
significance at 95% 
confidence level 
UPS B2B Purchasing Insights Study | April 2014 16 
Annual Spend on industrial supplies 
Total <$50k A $50k - $250K B $250k+ C 
(n=680) (n=504) (n=317) 
18% 
9% 
19% A 
32% AB 
50% 
45% 
57% AC 
50% 
32% 
46% BC 
24% 18% 
No influence. I would be no 
more likely to do business with 
a new supplier because of this 
Somewhat more likely 
Much more likely 
(n=1,501)
Conclusions and Implications 
Online selling is changing the dynamics of buyer-vendor relationships. While more traditional selling channels 
like catalogs, phone/fax or sales representatives are still in demand, buyers use and prefer online channels more. 
Thirty-four percent of buyers surveyed say they’ve gone outside of their supply base to make an online purchase. 
Their responses imply that if they can’t find the product, price and delivery date they need, another vendor is 
just a click away. 
More than ever, suppliers need to be in the right place at the right time online, but that’s not all. Buyers want 
features that make them more confident in their orders before clicking submit, such as real-time product 
availability and firm or guaranteed shipping dates. They also want to know the returns policy and see their 
negotiated pricing. One of the greatest challenges suppliers face in meeting those needs is making sure 
their e-commerce systems are integrated with front- and back-office systems to create a seamless customer 
experience across multiple channels. 
In the end, suppliers who deliver the buying channels their customers want, while continuing to advance 
and improve their customers’ online buying experience, would seem to have the greatest 
competitive advantage. 
Potential actions for suppliers 
• Embrace e-commerce (but not exclusively): Suppliers who are not yet online risk being excluded 
from consideration by buyers at all spending levels. While traditional selling methods should not 
be abandoned yet, to not be present where a majority of buyers are increasingly spending their 
budgets will make it difficult, if not impossible, to compete. 
• Continually improve the customer experience: The factors that buyers rate most important when 
researching and buying require a high level of integration between inventory, pricing, shipping 
and returns processes. Providing a seamless and complete purchase experience gives buyers the 
confidence they need to place an order, and can reduce inquiries and potential write-offs. 
UPS B2B Purchasing Insights Study | April 2014 17 
• Be in the right place when buyers are looking: Having a superior supplier website with 
stellar functionality means little if buyers can’t find the site or don’t know it’s available. 
Making sure products and supplier information can be found easily by search engines 
(Search Engine Optimization – SEO), and being visible when buyers search for products 
(Search Engine Marketing – SEM), are essential strategies for retaining and increasing a 
customer base. 
©2014 United Parcel Service of America, Inc. UPS, the UPS brandmark and the color brown are registered trademarks of United Parcel Service of America, Inc. All rights reserved.

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Purchasing insights

  • 1. UPS B2B purchasing insights: Behaviors, preferences and perceptions of industrial supplier performance
  • 2. Introduction Industrial distribution, once dominated by family-owned companies built on generations of personal relationships, has undergone a quiet but dramatic renaissance. Vendor reduction initiatives, widespread mergers and acquisitions and the inevitable growth in online selling have intensified competition for available dollars. The UPS B2B Purchasing Insights Study, conducted in partnership with research firm TNS, is designed to shed light on factors driving the purchase decisions of those who buy or influence industrial supplies purchases. Touching on both current and intended purchase behaviors, the study offers distributors a glimpse into their competitive position in the marketplace as well as potential areas for growth. n=302 n=197 n=104 n=82 n=81 n=66 n=61 n=63 n=53 n=42 n=47 n=31 n=29 n=10 n=333 General Manufacturing/processing Contractor/service Provider Residential Construction Commercial Construction Hospital/healthcare Automotive Energy Government/military Hospitality OEM (Original Equipment Manufacturer) Utilities Aerospace Machine Shop Mining Other 13% 20% 7% 5% 5% 4% 4% 4% 4% 3% 3% 2% 2% 1% 22% industry base Buyer Commodity manager Contract manger Maintenance manager/supervisor Materials manager owner/principal Procurement manager/director/officer Purchasing manager/director/officer Sourcing manager/director/officer Supply Management director/supply chief Other n=101 n=60 n=100 n=176 n=92 n=533 n=100 n=146 n=23 n=58 n=112 7% 4% 7% 12% 6% 36% 7% 10% 2% 4% 7% career base UPS B2B Purchasing Insights Study | April 2014 2 Methodology TNS conducted an online survey of 1,501 industrial supplies purchasers in December 2013. Respondents included sole/joint decision makers or strong influencers of sourcing and purchasing decisions. Survey respondents purchase catalog or stock-type products (not custom-made items) from a predefined list of product categories representing a wide range of industries. Purchasers with annual spending levels on industrial products of less than $50,000 (n=680), $50,000 to $250,000 (n=504), and more than $250,000 (n=317) were included in the study. Factors such as age, tenure as a buying professional and size of supply base were also studied. Demographic differences are provided where the findings were significant and useful. career experience 23% 33% 3% 40% Less than 1 year 1-5 years 5-10 years More than 10 years
  • 3. Executive Summary The UPS Purchasing Insights study, a broad view of the industrial supplies buyer’s mindset, studies customer perceptions across five key factors of the purchasing process. Key factors of purchasing process Researching and Selecting Suppliers Purchasing Website Features and Functions Delivery and Returns Post-sales Service and Support 5 Researching, selecting and purchasing behavior are in transition As expected, factors considered important in choosing a supplier and making a purchase are dominated by enduring features such as product quality, availability and price, followed closely by shipping, delivery and returns capabilities. Yet, it’s interesting that only half of purchasers say having a catalog and having a sales representative are important to their supplier decisions. That is not to suggest that catalogs and sales representatives aren’t important to the purchase process, because they are, but it does signal that the wants, needs and actions of industrial supplies buyers have taken a noticeable turn. Readers may be most surprised to learn how quickly web-based research and purchasing has grown, with more than half of buyers now making some of their purchases online. One-third of buyers spend most of their budgets online. Buyers report that the majority of their suppliers have websites that offer online ordering. And, it can be argued that e-commerce is having an impact on buyer-supplier relationships -- 34% of buyers say they’ve gone outside of their existing supply base to make an online purchase with a new vendor. For suppliers, finding strategic ways to be in the right place at the right time is the key to retention and growth. But perhaps one of the most unexpected findings is how very satisfied buyers are with their current suppliers’ capabilities in all the areas they consider most important to the supplier selection process. This is great news for distributors in good standing with their customers, and perhaps concerning to those looking to expand a customer base. UPS B2B Purchasing Insights Study | April 2014 3
  • 4. But perhaps one of the most unexpected findings is how very satisfied buyers are with their current suppliers’ capabilities in all the areas they consider most important to the supplier selection process. This is great news for distributors in good standing with their customers, and perhaps concerning to those looking to expand a customer base. A common need - integration Taking a big picture view of the findings reveals a common thread: the capabilities buyers rank most important require greater integration of a seller’s systems and processes – inventory, shipping and returns – in order to provide a more competitive and satisfying customer experience. For example, data suggests that offering real-time product availability, negotiated pricing and shipping costs into the online purchase experience may help to fill a need for many buyers. The results that follow help to reveal windows of opportunity for distributors seeking to retain and even grow their businesses. The findings suggest that suppliers who are not yet meeting their customers’ purchasing demands must act quickly to remain competitive and grow. UPS B2B Purchasing Insights Study | April 2014 4 Inventory Shipping Returns
  • 5. Factors Affecting Supplier Selection Selection criteria While the vast majority of buyers rank product-related features as important when selecting a supplier, more notable is that delivery and returns capabilities, along with the ability to buy on a supplier’s website, are important to more buyers than having a sales representative and having a printed catalog. The findings presented ahead show that sales representatives and catalogs are still important and relevant to the supplier research process, but the data does signal a shift toward less traditional methods of research. Diving more deeply into the selection requirements shows that more higher-spending buyers assign importance to supplier websites, sales representatives, catalogs and added-value services. They also rely more on word-of-mouth recommendations from coworkers and peers. Figure 1: Important Criteria When Selecting Suppliers Base: All respondents - n=1,501 How important are the following when deciding which industrial supplies vendors to purchase from? ? top -2 box 25% 26% 24% 42% 41% 39% 36% 31% 34% 70% 66% 63% 95% 93% 92% 91% 84% 80% 78% 75% 74% 71% 70% 69% 69% 59% 58% 56% * Respondents asked to rate “Extremely Important” attributes first followed by “Very important” up to a maximum of five attributes. Attributes randomly selected if more than five, prioritizing “Extremely Important” attributes. UPS B2B Purchasing Insights Study | April 2014 5 25% 27% 31% 28% 34% 38% 37% 34% 35% 35% 35% 33% 34% 32% 32% 31% 39% Very Important Extremely Important 23% 36% 41% 50% 61% Product quality Product availability Product price Delivery when products are needed Shipping costs Return policies and procedures Product catalog / product information on supplier website Contract / negotiated pricing Ability to make purchases on the supplier’s website Value-added services, such as repairs, training or technical support The supplier’s website overall Payment options Having a nearby physical location where I can purchase or pick up Word-of-mouth recommendations from coworkers or peers Having a sales representative Online reviews of the supplier Printed / hardcopy product catalog 54% Higher spending firms place greater importance on suppliers’ websites, as well as traditional offline criteria, including value added services, sales reps and printed catalogs.
  • 6. Supplier performance on selection criteria/attributes Buyers indicate their suppliers are performing very well on all the criteria important to selecting a vendor. No meaningful differences could be found among the three annual spending levels. At the same time, this raises a chicken or egg question. Are industrial suppliers, in general, performing well across the board? Or, are buyers choosing to work with vendors who better meet their needs on all these criteria? Regardless of the answer, the performance standard for suppliers is quite high, and it’s reasonable to assume that those who anticipate and meet buyers’ expectations stand the best chance of success. Figure 2: Supplier Performance on Attributes Base: Varied bases among those placing importance on each attribute* How well do your current suppliers meet your needs regarding those factors that are important to you? (Select one for each response) ? top -2 box 61% 64% 65% 58% 58% 57% 57% 53% 61% 56% 65% 55% 55% 58% 37% 32% 36% 35% 35% 35% 39% 31% 34% 25% 34% 34% 30% 98% 96% 95% 94% 93% 92% 92% 92% 92% 90% 90% 89% 89% 88% UPS B2B Purchasing Insights Study | April 2014 6 Very Well Extremely Well 57% 29% 30% Product quality Product availability Having a sales representative Delivery when products are needed The supplier’s website overall Ability to make purchases on the supplier’s website Return policies and procedures Having a nearby physical location where I can purchase or pick up Product catalog / product information on supplier website Payment options Product price Printed / hardcopy product catalog Value-added services, such as repairs, training or technical support Contract / negotiated pricing Shipping costs 86% Research methods - most used and most preferred More buyers choose websites and search engines to research industrial supplies purchases, and they’re also the most preferred methods. A majority of buyers are researching supply purchases via supplier websites (68%), and 52% are using search engines. Purchasers who prefer non-web based research – which includes everything from catalogs to independent reviews to technical articles – cite personal interaction and unbiased information as their reasons for choosing offline methods. As might be expected, buyers spending more than $250,000 annually on industrial supplies are much more likely to rely on sales representatives and catalogs for information. However, buyers in higher spending brackets may have greater access to sales representatives.
  • 7. Given buyers’ high satisfaction levels with supplier performance on key selection criteria, and considering that web-based research is most preferred, it’s reasonable to infer that many buyers consider online research essential to their supplier selection process. The use of search engines means that suppliers may be at greater risk of losing share to companies whose products are perhaps easier to find, in stock or more competitively priced. On the other hand, suppliers whose products are easy to find online and meet buyers’ criteria may also stand to gain customers. Figure 3: Industrial Supplies Purchasers’ Research Methods Base: All respondents n=1,501 What is your most preferred method for researching industrial products? (Select one) How do you currently research your industrial supplies purchases? (Select all that apply) ? most preferred research method Suppliers’ website 68% 30% Search engine results that take me directly to the product I need 52% 19% Suppliers’ print/hard copy catalogue 47% 11% Account / Sales Representative 43% 12% User reviews and recommendations 40% 12% Reviews from independent trade publications 29% 7% Technical articles or whitepapers from the product’s manufacturer 28% 5% Purchasing Purchasing online is the most used and most preferred method, but traditional methods endure Sixty-three percent of industrial supplies buyers purchase through websites, whether directly from suppliers or through a third-party provider, but use and preference for phone, fax and placing orders through sales representatives or emails remain strong. Across all purchase methods, the reasons cited were factors related to speed, ease and convenience. Those who prefer offline channels to make purchases cited personal interaction and the ability to get answers to order-related questions. Some participants noted company procurement policies dictated the purchase method they used. Figure 4: Important Criteria When Selecting Suppliers Base: All respondents - n=1,501 Which of the following methods do you use to purchase industrial supplies? (Select all that apply) Which of these are your preferred methods to purchase industrial supplies? (Select up to TWO responses) ? Purchase methods(s) Most preferred purchase methods(s) 40% 37% 6% 32% 19% 13% 32% 21% 12% 27% 17% 12% UPS B2B Purchasing Insights Study | April 2014 7 6% 30% 38% 50% 26% 41% 54% 33% 46% 63% 59% 20% 57% 2% (Net) Website Directly from the industrial supplier’s website Third-party website (e.g. AmazonSupply or Google Shopping) (Net) Phone or fax Phone or fax to customer service Phone or fax to a designated account representative (Net) In-Person In-person at the supplier’s physical location In-person during sales visit from account rep. (Net) Email Email to customer service Email to a designated account representative Electronic data interchange (EDI)
  • 8. Looking at buyers’ projected purchase behavior in Figure 5, it’s fair to assume that the rate of online purchasing from supplier websites will continue to rise. Figure 5: Approximate Percent of Annual Spend Conducted on Suppliers’ Websites Base: Among supplier website purchasers; n=863 Approximately how much of your annual spend on industrial supplies is conducted on suppliers’ websites? (Select one) ? How do you foresee the amount you spend on suppliers’ websites changing in the next few years? ? UPS B2B Purchasing Insights Study | April 2014 8 14% 31% 18% 36% Less than 25% 25-50% 50-75% 75% or more 39% 4% 3% 54% Spend more online About the same Spend less online Don't know
  • 9. Most purchases are a combination of repeat and one-off orders The majority of buyers across all spending levels report making a combination of repeat and one-off purchases, indicating that suppliers may have ample opportunity to acquire new customers. Since buyers expect to increase their online purchases in the future, and a clear majority prefer to research supplies online, having robust e-commerce and Search Engine Optimization (SEO) and Search Engine Marketing (SEM) strategies are essential for suppliers seeking to add or potentially retain customers. Figure 6: Repeat Versus One-off Purchases Base: All respondents; n=1,501 Which of the following best describes your company’s purchases of industrial supplies? (Select one response) ? (n=1,501) (n=680) (n=504) (n=317) Annual Spend on industrial supplies Total <$50k A $50k - $250K B $250k+ C 5% 5% 4% 6% 60% 58% 62% 62% The opportunity to gain or lose online customers is underscored in Figure 7, showing that 34% of buyers say they’ve gone outside their existing supply base to make an online purchase. Buyers spending less than $50,000 per year are more likely to purchase online from a supplier with which they had no previous relationship. Figure 7: Pre-existing Offline Relationship with Supplier(s) for Online Purchases Base: Among supplier website purchasers; n=863 Thinking about the industrial suppliers whose websites you currently purchase from, did you have an offline relationship with them before making your first online purchase with them? (Select one) ? Annual Spend on industrial supplies Total <$50k A $50k - $250K B $250k+ C UPS B2B Purchasing Insights Study | April 2014 9 61% 34% 50% 44% BC 68% A 73% A 27% 22% 5% 6% 5% 4% Yes No I don't know (n=863) (n=381) (n=303) (n=179) Letters indicate statistical significance at 95% confidence level 35% 37% 34% 32% All or almost all of our puchases are one-off purchases We have a mix of repeat purchases and one-off purchases All or almost all of our purchases are repeat purchases (n=1,501) (n=680) (n=504) (n=317)
  • 10. Supplier websites Online ordering has become table stakes; most buyers say half or more of their vendors offer website ordering For 67% of buyers, the ability to order through a supplier’s website is considered either very important (38%) or extremely important (29%). Buyers with larger budgets, and younger purchasers, assign the highest importance to online ordering. Buyers indicate that the majority of their suppliers offer website ordering. Again, it can be questioned whether the majority of suppliers actually offer website ordering or whether buyers have established more relationships with vendors who meet their expectations for that capability. Regardless of the explanation, the importance buyers assign to online ordering is high and worthy of supplier attention. Despite the growth in current and projected online sales, many industrial supplies purchasers still rely on traditional methods when researching and ordering products. It could be argued that the complexity of B2B purchasing, such as negotiated pricing and procurement policies, means that online buying is unlikely to completely replace all offline methods in the immediate future. Figure 8: Importance of Ordering from Supplier’s Website Base: All respondents - n=1,501 How important is it that a supplier offer the ability to order products directly from its website? ? How many of your current suppliers offer the ability to order products directly from their website? (Select one) ? UPS B2B Purchasing Insights Study | April 2014 10 29% 38% 26% 7% Extremely important Very Important Somewhat Important Not at All Important 30% 39% 11% 16% 1% 4% All Most About half Some None I don't know
  • 11. Supplier website features and functions are apparently on the right track As seen earlier in the report, buyers on the whole are satisfied with their suppliers’ websites. In fact, 93% of purchasers report the websites they order from are the same or better than the consumer websites they use to make personal online purchases. The higher the annual spend, the more favorably B2B websites are viewed compared to consumer websites. Figure 9: Suppliers’ Websites vs. Consumer Websites Base: Among supplier website purchasers; n=863 How do the industrial suppliers’ websites you use to make online purchases compare to the websites you use to make personal online purchases? (Select one) ? UPS B2B Purchasing Insights Study | April 2014 11 7% 9% 1% 5% 5% 56% 68% BC 50% C 40% 22% 18% 24% 26% A 15% 4% 20% A 29% AB Much better Somewhat better Same Somewhat worse Much worse (n=863) (n=381) (n=303) (n=179) Letters indicate statistical significance at 95% confidence level Annual Spend on industrial supplies Total <$50k A $50k - $250K B $250k+ C Online buyers appreciate website features that offer more insight into order cost and status Among buyers who purchase through suppliers’ websites, the ability to know shipping costs before ordering is one of the most mentioned benefits. Other frequently named benefits are real-time product availability, purchase history and delivery dates Figure 10: Benefits of Ordering from Suppliers’ Websites Base: Among supplier website purchasers; n=863 What are the benefits of ordering from industrial suppliers’ websites? (Select all that apply) ? 64% 63% 63% 63% 59% 59% 58% 58% 54% 33% 2% Ability to know shipping costs before ordering Ability to see real-time product availability Ability to view purchase history Ability to see estimated delivery date when ordering More convenient than phone or fax Ability to see very detailed product information Ability to easily make repeat orders Ability to see the most up-to-date product information Faster order processing Ability to see my negotiated pricing Other
  • 12. Industrial supplies buyers do have a website wish list Earlier, we saw that industrial supplies buyers are very satisfied with their vendors’ performance. Buyers do see areas for improvement in the online buying experience, though. Specifically, having better visibility into real-time product availability is the feature buyers most want improved, and by a sizeable margin. Suppliers who fully integrate their e-commerce and inventory management platforms may have a competitive advantage here. Figure 11: How Suppliers’ Websites Could Improve Base: Among supplier website purchasers; n=863 In what ways could the suppliers’ websites you use improve? ( ? Select all that apply) 53% 37% 37% 35% 34% 29% 27% 27% 26% UPS B2B Purchasing Insights Study | April 2014 12 20% 5% Show real-time product availability Make it easier to find the products I’m looking for Show shipping costs before making a purchase Improve site navigation Show estimated delivery date when purchasing Make it easy to make repeat orders Offer online chat with customer service Show my negotiated pricing on the website Show detailed order history of past orders More up-to-date product information Other Those who buy through suppliers’ websites see some downsides, such as less personal service (57%), and more difficult to get answers to product or order-related questions (40%). It’s possible that buyers who have access to knowledgeable customer service representatives via online chat may possibly rely less on more traditional methods of purchase Figure 12: Drawbacks of Ordering from Suppliers’ Websites Base: Among supplier website purchasers; n=863 What are the drawbacks of ordering from industrial suppliers’ websites? (Select all that apply) ? 57% 40% 24% 21% 18% 14% 14% 10% 10% 6% Less personal service More difficult to get answers to product or order-related questions My suppliers’ sites don’t show my negotiated pricing Not all payment options are available My suppliers’ sites aren’t updated regularly with latest product information My suppliers’ sites are difficult to navigate Harder to find the product(s) I need Placing repeat orders is difficult My suppliers’ sites don’t show the delivery date Other
  • 13. Barriers to online purchasing Despite buyers’ satisfaction with suppliers’ websites, those who don’t buy online cite several reasons; top among them are those who simply prefer to buy through offline channels. Other reasons cited are related to the need for answers to product questions or pricing. In fact, since multiple reasons could be selected, some of the reasons are likely interrelated. While some buyers may remain more resistant to online buying than others, it’s reasonable to assume that satisfying the need for more detailed product and pricing information through online channels may help to migrate existing customers to online channels, or to help gain new online customers. Figure 13: Barriers Preventing Non-web Purchasers from Transacting on Suppliers’ Websites Base: Among non-web purchasers whose suppliers offer web purchases; n=626 Which of the following prevent you from purchasing industrial supplies from suppliers’ websites? (Select all that apply) ? 30% 29% 27% 26% 24% 22% 18% 17% UPS B2B Purchasing Insights Study | April 2014 13 12% 10% 9% 3% Nothing prevents me, just prefer current method Need advice / information from knowledgeable sales person Product information is not detailed enough Pricing information is not detailed enough Difficult to find the products I need Shipping information is not detailed enough My contract / negotiated pricing is not available online Returns information is not detailed enough Suppliers don’t offer website ordering I can’t bill an online order to my account with the supplier Can’t use my preferred payment method Other
  • 14. Shipping, Delivery and Returns Earlier, Figure 3 showed that the overwhelming majority of buyers indicate their suppliers are performing well on criteria related to shipping, delivery and returns. Digging deeper, Figure 14 below illustrates that a majority of all surveyed buyers see shipping and delivery factors as very important or extremely important in the purchase process. Buyers want to see accurate shipping costs (87%) and estimated delivery dates (85%) before they buy, and 85% indicate that it’s important to have discounted shipping for large orders as well as tracking information. These results underscore that buyers are looking for an integrated and seamless purchasing experience. Suppliers, in order to meet their customers’ needs and remain competitive, should make sure their online and offline purchasing systems are highly integrated with order management, inventory, e-commerce, billing and returns processes. Figure 14: Shipping and Delivery Experience Base: All respondents; n=1,501 How important are the following aspects regarding the shipping and delivery of industrial supplies? (Select one for each) ? top -2 box Detailed, accurate shipping costs prior to payment 87% Very Important Extremely Important 85% 85% 85% 75% 68% 67% 61% How important are the following when deciding which industrial supplies vendors to purchase from? ? 25% 27% 31% 28% 34% 38% 37% 34% 35% 35% 35% 33% 34% 32% 32% 31% 39% 25% 26% 24% 42% 41% 39% 36% 31% 34% 70% 66% 63% Product quality Product availability Product price Delivery when products are needed Shipping costs Return policies and procedures Product catalog / product information on supplier website Contract / negotiated pricing Ability to make purchases on the supplier’s website Value-added services, such as repairs, training or technical support The supplier’s website overall Payment options Having a nearby physical location where I can purchase or pick up Word-of-mouth recommendations from coworkers or peers Having a sales representative Online reviews of the supplier 95% 93% 92% 91% 84% 80% 78% 75% 74% 71% 70% 69% 69% 59% 58% 56% UPS B2B Purchasing Insights Study | April 2014 14 Estimated delivery date prior to payment Discounted / free shipping for larger orders Tracking information after payment The ability to choose different shipping options to meet my desired delivery date The ability to pay with my preferred shipping carrier account Batch shipping – all the products in my order arrive at the same time The ability to use my preferred shipping carrier 37% 50% 37% 48% 35% 50% 35% 50% 36% 39% 33% 35% 34% 33% 32% 29% Figure 1: Barriers Preventing Non-web Purchasers from Transacting on Suppliers’ Websites Base: Among non-web purchasers whose suppliers offer web purchases; n=626 top -2 box Very Important Extremely Important 23% 36% 41% 50% 61% Printed / hardcopy product catalog 54% Returns policies are important to buyers At the opening of this white paper, Figure 1 showed that return policies and procedures are high among criteria considered important when selecting a supplier.
  • 15. As shown in Figure 15, over half of buyers in the $250,000+ spending category indicate they make returns; 29% say they return industrial supplies frequently (14%) or very frequently (15%). Figure 15: Frequency of Returns Base: All respondents n=1,501 How often do you return industrial supplies that y ? ou purchase? (Select one) Letters indicate statistical significance at 95% confidence level Among those who make returns, pre-printed shipping labels top the wish list There are a variety of opportunities to make the returns process more streamlined and convenient, with the key needs being ease, speed, and flexibility. Most buyers who make returns (53%) think the returns process could be improved by including a pre-printed return shipping label with the original delivery. Forty-percent think the ability to handle all aspects of a return online would help. Annual spending levels do show differences in responses, however. Buyers with $250,000+ annual spend are more likely to choose handling all aspects of returns online while those spending less than $50,000 annually more often cite the ability to return products to a physical location. Figure 16: Improving Returns Process Base: All respondents who make returns n=1,339 UPS B2B Purchasing Insights Study | April 2014 15 Annual Spend on industrial supplies <$50k A $50k - $250K B $250k+ C 5% A 15% AB 1% 12% A 14% A 13% 21% A 24% A 68% BC 55% C 44% 17% BC 7% C 3% (n=680) (n=504) (n=317) Never Rarely Occasionally Frequently Very frequently A B C Which of the following would improve industrial suppliers’ returns processes? (Select all that apply) ? 53% 40% 37% 37% 34% 25% 16% 2% Pre-printed return shipping labels included with the original delivery The ability to handle all aspects of the return online using the industrial supplier’s website The ability to speak directly with a customer service representative regarding my return Faster delivery of replacement industrial products More flexible timeframes for making returns Ability to return products to a physical location The ability to make batch returns Other
  • 16. Post-sales service and support could be a differentiator When buyers were asked whether having better access to post-sales service and support information online, such as product manuals and warranty information, would affect their willingness to purchase from a new vendor, 68% indicated that it would make them somewhat likely (50%) or much more likely (18%) to purchase from a new vendor. The influence of post-sales information appears strongest for buyers at higher annual spending levels, particularly at $250,000 or more per year, for which 82% are either somewhat more likely (50%) or much more likely (32%). The obvious implication is that for suppliers looking to gain new customers and retain existing customers, offering an enhanced level of post-sales information and support on their websites may be a competitive advantage. These findings also suggests that suppliers should not view their websites as merely online catalogs and transaction vehicles, but platforms to engage purchasers across the entire customer lifecycle. Figure 17: Post-sale Service/Support on Website’s Influence on Selecting New Supplier Base: All respondents n=1,501 How much influence would these types of post-sale information and materials on a supplier’s website have on your willingness to do business with a new supplier? (Select one) ? Letters indicate statistical significance at 95% confidence level UPS B2B Purchasing Insights Study | April 2014 16 Annual Spend on industrial supplies Total <$50k A $50k - $250K B $250k+ C (n=680) (n=504) (n=317) 18% 9% 19% A 32% AB 50% 45% 57% AC 50% 32% 46% BC 24% 18% No influence. I would be no more likely to do business with a new supplier because of this Somewhat more likely Much more likely (n=1,501)
  • 17. Conclusions and Implications Online selling is changing the dynamics of buyer-vendor relationships. While more traditional selling channels like catalogs, phone/fax or sales representatives are still in demand, buyers use and prefer online channels more. Thirty-four percent of buyers surveyed say they’ve gone outside of their supply base to make an online purchase. Their responses imply that if they can’t find the product, price and delivery date they need, another vendor is just a click away. More than ever, suppliers need to be in the right place at the right time online, but that’s not all. Buyers want features that make them more confident in their orders before clicking submit, such as real-time product availability and firm or guaranteed shipping dates. They also want to know the returns policy and see their negotiated pricing. One of the greatest challenges suppliers face in meeting those needs is making sure their e-commerce systems are integrated with front- and back-office systems to create a seamless customer experience across multiple channels. In the end, suppliers who deliver the buying channels their customers want, while continuing to advance and improve their customers’ online buying experience, would seem to have the greatest competitive advantage. Potential actions for suppliers • Embrace e-commerce (but not exclusively): Suppliers who are not yet online risk being excluded from consideration by buyers at all spending levels. While traditional selling methods should not be abandoned yet, to not be present where a majority of buyers are increasingly spending their budgets will make it difficult, if not impossible, to compete. • Continually improve the customer experience: The factors that buyers rate most important when researching and buying require a high level of integration between inventory, pricing, shipping and returns processes. Providing a seamless and complete purchase experience gives buyers the confidence they need to place an order, and can reduce inquiries and potential write-offs. UPS B2B Purchasing Insights Study | April 2014 17 • Be in the right place when buyers are looking: Having a superior supplier website with stellar functionality means little if buyers can’t find the site or don’t know it’s available. Making sure products and supplier information can be found easily by search engines (Search Engine Optimization – SEO), and being visible when buyers search for products (Search Engine Marketing – SEM), are essential strategies for retaining and increasing a customer base. ©2014 United Parcel Service of America, Inc. UPS, the UPS brandmark and the color brown are registered trademarks of United Parcel Service of America, Inc. All rights reserved.