From the course: Selling Into Industries: Government

What governments buy

From the course: Selling Into Industries: Government

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What governments buy

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- The government is one of the largest buyers in the world, so it's often perceived as the most complicated, but most rewarding market to sell into. The government, particularly in the United States, buys everything, just about every product and service imaginable. Usually we think of the government as just buying defense systems or large scale construction projects. Think again. The government indeed buys defense and construction, but they also buy professional services, web design, paper plates, consulting teams for project management, events coordination, marketing, training, and much, much more. Now the good news is that there is room for many sellers to successfully sell their products and services. The government market is one of the largest ecosystems for sellers. Let's look at some of the numbers. The US federal government, state and local government, and education market in fiscal year 19 is budgeted to spend over four trillion dollars, which is about 21% of the gross domestic product. The SLED, which is state, local, and education market, is one point five trillion alone. And then check out Canada. The government of Canada buy and sell website states the government of Canada purchases approximately 16 billion every year. The government can be a great customer and for you, the seller, it offers significant sales opportunities. There are substantial advantages for contracting compared to the commercial market place. Again, the government is the largest buyer in the world and it's a market place where opportunities are publicized, all advantageous for you the seller. It's simply a matter of determining where your product or service might fit in to the buying ecosystem of government and it's very likely that they are already buying a like product or service from another vendor. You'll need to conduct serious market research before deciding to invest resources in doing business with the government. To illustrate, let's start by understanding how the Treasury divides spending. This will help you plot your product in one of three categories of spending as you assess your plan to sell into the government. The US Treasury divides all federal spending into three groups, mandatory spending, discretionary spending, and interest on debt. Products and services are then broken into subcategories. So a quick way to understand if the government buys what you sell is to first look at the NAICS codes. This will help you to understand what your classifications and your products fall under. Second, you'll want to leverage the government websites to see who currently is contracting the product or service you offer. A few websites that will provide deeper insights are the Fed Biz Ops, GSA, and usaspending.gov. With an easy search you can find a number of additional sites in your country that also illustrate the current buying needs of the government, such as buyandsell.gc.ca for Canada. It's just that simple to turn in your piece of the market share and enjoy the endless possibilities of selling into the government space.

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