Everything You Need to Know About Industrial Products

Posted by Rameefa on July 9, 2020  / 
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Everything you need to know about the industrial products

There are specific characteristics and features that average people do not need in everyday life but which only the industries need. — “Industrial products”

Industrial products can be categorized according to how they enter the chain of production and their relative costliness. Industrial goods must also be categorized based on their relative costs. The classification of industrial products is essential since they support decision making in the organization.

The four categories of industrial products are distinguishable: Manufacturing materials & parts, Capital goods, Supplies & Business Services.

1) Manufacturing materials & parts

These are components that can be completed in different production units but can be used whenever part of the finished product. Ball bearings are a perfect example of manufacturing parts.

Price and quality are critical marketing considerations; branding and advertising are less relevant. Most of the manufacturing materials & parts are sold directly to industrial consumers.

This will fall into two categories: Component materials (iron, yarn, cement, Wires) and parts (small motors, tires, castings).

Components parts enter the finished product without further modifications. For instance, when small motors are put in vacuum cleaners and tires are mounted on vehicles.

2) Capital goods

Capital goods are long-lasting items that make the finished product easier to produce or handle. It comprises of two groups: Installations (factories, buildings, machinery, etc…) and Accessory equipment… (Generators, drill presses, elevators).

Installations are big purchases. They are usually purchased directly from the manufacturer, with a long negotiation period preceding the standard sale. 

Accessory equipment — Such types of devices are not part of a finished product. These have a shorter life than installations, but a longer life period than supplies. While some device manufacturers sell directly, intermediaries are used more often, because the market is widely distributed, there are multiple customers and limited orders.

3) Supplies

Those products are shortlisted, which allow the production and management of the finished product. Supplies (fuel, coal, cleaning materials, lubricating oil, electric power nuts, bolts, etc.). Supplies are similar to consumer goods; they are usually bought directly and with minimum effort.

These are classified as Operating Supplies and Maintenance and repairs. They are classified together as MRO goods.

4) Business services

Business services are typically services to businesses delivered by third parties and are actually in the form because companies don’t want to waste time or effort running regularly. The service includes maintenance and repair services and business consulting services. Maintenance and Repair services are usually offered by small producers under contract or by original equipment manufacturers (OEM).

The marketing strategy for industrial products varies quite considerably from consumer products:

Specialized buyers and sellers: Buyers are businesses – who have professional and additional skills. Most times the buyers can a “company”.

Buyer-seller relationship: Heavy focus on the management of customer relationships.

Transaction value: Sometimes significant purchasing value in a single deal.

Quality and price: Greater emphasis on quality and price (where alternative products are acceptable). The customer also negotiates rates.

Support: Additional post-sales support needed.

Features of Industrial Product are:

1) A limited number of Buyers – Compared to consumer products the number of buyers of industrial products is limited.

2) Distribution Channel – For the selling of industrial products, a small distribution channel is only used since there are fewer buyers.

3) Geo-consciousness – The demand for industrial products is generally not dispersed but concentrated only to a fixed geographic location.

4) Derived Demand for Industrial products – Demand for industrial products are generated by consumer demand.

5) Buying Reciprocally – Most industries buy goods from a company to sell finished products to the same company.

6) Inelastic demand- Demand is relatively inelastic for industrial products, i.e. it is not influenced by price changes.

7) Large investments in industrial products

8) Better buyer awareness – Industry knowledge should be used to evaluate goods. Industrial goods buyers have a thorough knowledge of the commodity, the supply source, alternative models available, prices of competing models, etc.

9) Industrial goods after-sale service – The seller must ensure the buyer’s routine and they will always want to purchase from trustworthy suppliers instead of from an undisclosed resource.

10) The method of buying as a team

11) Leasing instead of buying – The leasing options may be ideal for equipment that is easily obsolete or required for a particular application. Based on the lease arrangement, the payments may be included as part of your operating expenses.

What you need to know when buying industrial goods online?

  • Analyzing -– the buyer starts a search process for solutions to a problem or supplier of a product or service. You can also just look for customer reviews.
  • Evaluating — the buyer may create a shortlist of products or services and each of them shall be thoroughly evaluated.
  • Buying —- the buyer hits the decision-making point.

It is essential for organizations that produce high-quality industrial products and guarantee products. It ensures that the products provided by the company meet the security standards needed. So, when looking for a reliable online supplier to buy products from because you don’t want to get substandard goods that could endanger your business, you should look at the distributor’s E-Catalog(website) to gain access and other information of the various industrial products.

Such product suppliers have a website on their own where they provide images and cost of the products. In case of more data being required for the customer, you may contact them through the “Quick Response Form”.

To choose an industrial products supplier

You may end up with finding more industrial solutions provider but not all of them are good at servicing your needs and you have to look at various aspects to find the ultimate supplier. So start considering the below aspects when choosing the right supplier.

  • Reputation
  • Trustworthy
  • The price
  • Service Level
  • Request for referral

Final thoughts

In reality, the new generation of industrial customers is “Digital natives”(grew up entirely online). The Internet has transformed the industrial business into 24X7X365 industrial products that are more readily available, and therefore, it can chart their desires and challenges for industrial products.

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