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Small Businesses Drive BTB Sales, Abacus Finds

Small businesses accounted for the majority of BTB purchases from direct merchants last year, according to a report released yesterday by Abacus.

The 2005 Abacus Business-to-Business Industry Insights Report reviews 2004 business purchasing activities of the 350 companies enrolled in the Abacus B2B Alliance database. According to the report, companies with 1 to 49 employees accounted for 67 percent of purchases from direct merchants for a total of $2.7 billion. Large businesses — those with 100 or more employees — produced 25 percent of sales. Midsize companies, with 49 to 100 employees, yielded 8 percent.

Small businesses were most likely to make a purchase last year, with 29 percent of all small business contacts buying something. Only 21 percent of midsize business contacts and 19 percent of large business contacts made a purchase last year.

However, purchases from large businesses were twice as valuable on average and twice as large as purchases made by small businesses.

A range of industrial, manufacturing and transportation companies spent the most last year, totaling $1.3 billion in sales. This was followed by: business and legal, $894 million; finance and insurance, $597 million; health, $493 million; retail and restaurant, $447 million; education, $385 million and government, $256 million.

Despite their No. 7 ranking, government contacts had the highest average order size and highest spending per contact. The retail and restaurant category was the least valuable on a per-contact basis.

Other findings:

· Magazines/newsletters/books are 18 times more likely to be purchased by the health industry than the average.

· Computer purchasing is highest in business and legal services.

· Electronics, gadgets and tools are five times more likely to be purchased by heavy industry.

· HR/training/seminars are five times more likely to be purchased by government than the business average.

· Business and legal service and finance/insurance customers are more likely to buy gifts and food than any other group.

· Finance/insurance and health are most likely to buy cards and stationery.

· Ad specialty products have the highest penetration in the education market.

· Computer and furniture categories realized the highest spend per contact.

· Abacus provides cooperative data, data management and analytical services to catalogers, retailers and business-to-business marketers.

Chantal Todé covers catalog and retail news and BTB marketing for DM News and DM News.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters

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