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    September-2016
 
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Opportunities to Sell To Government Agencies Are Growing

Every second, the federal government spends $563.11 through its credit card program. A transaction in this area occurs every 1.25 seconds.  This past fiscal year, both measurements increased.

 

To hear Mark Amtower (one of the nations leading experts on marketing to government) talk about the myths that surround the federal marketplace, click one of the links below. This program is available in Windows Media Audio (WMA) and MP3 formats.

WMA      MP3

   

For businesses seeking to enter this market, this bodes well for the future.  To find out how to enter this marketplace more easily, listen to the audio program in the box to the right.

The growth in the Federal small purchase credit card program, called the SmartPay program, administered by the U.S. General Services Administration, grew in the last fiscal year and is expected to continue.

The total spent by the program rose to $17.758 billion despite fewer cardholders and fewer overall purchases. This is about $325 million more than FY 2005. The average FY 2006 purchase rose to $700.72 from $672.15 in FY 2005. The number of actual cardholders across the federal government continued to fall slightly to 299,564, significantly lower than the high of FY 1999, when there were 517,082 cardholders.

Benefits of the credit card program for government include cost avoidance over paper-based procurement and the speed by which government employees can get products and services to accomplish their work. Benefits for vendors include the speed of payment and paperwork (PO processing) avoidance. Most Federal cards have a per purchase limit of $2,500. Orders at or below this level do not require a Federal contract.

Most states and many local governments are also using small purchase credit cards, though with a smaller per-purchase level.

Mark Amtower, a partner at Amtower & Company and a business-to-government consultant to the direct marketing community, says, All the statistics I have seen over the past 20 years indicate that the average government order is 15-20% higher than a B2B order. These end-of-year results indicate proactive B2B marketers targeting government are probably growing the open market (non-contract) B2G side of their business faster than most B2B segments. I have worked with companies that were able to produce 8-figure open market sales on the Federal credit card.

Federal SmartPay (formerly IMPAC) Credit Card Statistics

Fiscal Year # of transactions    # of cardholders Total FY $
1989 47,595 13,032 9,088,038
1990 331,957 21,431 67,779,471
1991 730,564 35,234 167,747,687
1992 1,097,500 48,819 307,450,342
1993 1,736,373 84,284 537,501,272
1994 2,765,615 96,090 921,639,498
1995 4,246,329 130,353 1,591,836,136
1996 7,000,000+ 185,000 2.97 billion
1997 11,500,000 240,000 4.95 billion
1998 16,400,000 340,000 7.95 billion
1999 20,600,000 517,000 10.2 billion
2000 23,500,000 490,000 12.3 billion
2001 25,000,000 410,000 13.8 billion
2002 26,000,000 390,000 15.2 billion
2003 26,500,000 360,000 16.2 billion
2004 26,500,000 315,000   17.08 billion
2005 25,931,643 301,217 17.43 billion
2006 25,342,724 299,564 $17.758 billion

Contact: Mark Amtower, Amtower & Company, 301 924 0058,  Mark@FederalDirect.net


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