Business User Markets

Besides selling final products and services to supply chain companies, several additional user markets also make purchases either for their own consumption or they buy with the intention of redistributing to others.  In these purchase situations, the buyer generally does not radically change the product from its purchased form.  While technically these markets are also part of the supply chain, members of the business user market do not, in most cases, engage or directly assist in production activities.

The business user market includes:

Governments

They use purchases to assist with the functioning of the government, including purchasing for own use, such as public works projects and military equipment, and for redistribution to others (e.g., medical supplies). In most cases, governments require suppliers to be approved, meet specifications and to bid for purchases.  Examples:  federal, state, local and international governments.

Not-For-Profit

This category includes organizations whose tax structure precludes earning profits from operations and whose missions tend to be oriented to assisting others. In most cases, these organizations look for purchases that will fit within tight budgetary restrictions and also within the mission of the organization. Examples: educational institutions, charities, hospitals, and industry associations.

Reseller

Also called distributors, these companies operate in both the consumer and the business markets.  Their function involves purchasing large volumes of products from manufacturers (and sometimes from other resellers) and selling these products in smaller quantities.  Mostly, resellers seek products that are of interest to the reseller’s customers, though they also make purchases to support their own operations (e.g., a retailer outfitting a new retail store).  Examples:  wholesalers, retailers and industrial distributors.