Ups Invests to Learn About Direct Web Sales

UPS Invests to Learn About Direct Web Sales

United Parcel Service Inc. is investing in a tech startup that allows a brand manufactures to set up websites and sell directly to consumers, by passing the middlemen. This idea was created by the former eBay Inc. Executive, which in a way the idea is something similar, but instead of buying from individual people and bidding on items, this is buying direct from a manufacturer at a set price. Brand which have already took to the idea include D-Link, Bosch and also Electrolux. In two rounds of funding, the idea has already generated $8.4 million. UPS are not willing to leak their secret of just how much they have invested in the idea.

This is a fast growing idea, and by next year, direct-to-consumers (DTC) online sales are expected to lead the market for sales of brand manufacturers at 34% of total sales coming from it according to a survey held by Forrester. In a 2013 survey by the U.S. Census Bureau, brand manufacturers declared that their web sales grew by roughly 30%, compared with around 14% growth from all e-commerce.

This is evidently a rapidly growing market, and United Parcel Service has obviously done research on it to know that it was worth an investment. The most important part of this process is the market research done by UPS, which is on page 40 of the book. They would have had to know that there was a demand for this type of service before investing in it, which they would have been able to find out by using primary and secondary data, and also qualitative and quantitative research.

By doing this research, creator Jason Rubottom found out that there were 12 manufacturers, which had showed interest in getting involved with online sales. This would have played a part in UPS’s decision to invest as he could provide evidence that there was a strong interest from many manufacturers. Market research is so important to know that when you are trying to start up a business, you are certain that there is interest from your target market and that your company has a chance of being successful.