Insights on FY23 Government eCommerce Sales

by | Oct 18, 2023 | Insights

In our recent blog How to Boost Your Government Sales’, we shared some insights into Federal eCommerce sales by SIN (Special Item Number), along with practical tips you can take to improve your sales strategy.  As the government fiscal year just ended, we’re following up to provide data we’ve collected on FY23 procurement to help you monitor changes in the market and set your team up for a successful year ahead!

In government fiscal year 23 (10.1.22 – 9.30.23), Supplier’s reported more than $9 Billion in commercial-off-the shelf (COTS) product sales through GSA MAS Contracts. About 1/3 of these sales were through small businesses. While sales transacted through GSA Advantage! represent a small portion (~8%) of the program’s annual volume, they’re indicative of the larger market opportunity and Suppliers should take note.

As you can see in the chart below, GSA Advantage! product sales have returned to their pre-pandemic levels and continue to trend positively, while sales through DoD’s eCommerce platform, FedMall, have continued to decline (despite the program’s modernization efforts).

While FedMall is still heavily utilized for micro-purchases (under $10k) by DoD buyers, most of its sales (66%) are for NSN stock items sent to DLA Enterprise Business System or GSA Global Supply for fulfillment. GSA Advantage! sales, however, are overwhelmingly (~90%) for commercial items including IT products,  office supplies, furniture, and laboratory test equipment.

Pricing and the Impact of the Continuing Resolution

In the final hours of fiscal year 23, a continuing resolution was passed, narrowly avoiding a shut-down and funding the Federal government through mid-November (at FY23 budget levels). However, until a FY24 budget is approved, agencies may be inclined to tap the breaks on spending as the fear of a shutdown still looms.  Budget pressures may also force already price sensitive buyers to focus on lower price alternatives that meet their needs.

In Federal eCommerce sales, competition drives prices down and keeps them low, just as it does in the wider commercial market; thousands of Suppliers are vying for their share of the government’s procurement dollars. While FY24 may be off to a slow(er) start, there is still plenty of work you can do to start the year off strong.

    1. Pricing is one of the most important parts of your company’s sales strategy. Ensure your prices are competitive with market but remember, you’ll need to honor those prices; be sure you’re covering your costs when deciding on a pricing strategy.  Remember, MAS awarded prices are a ceiling, you can always put an item on sale or offer a discount at the order level.
    2. Maximize revenue opportunity by aligning the products offered on your contract with evolving market demand.
    3. Explore additional sales channels:
  • GSA’s Commercial Platforms Program. Government Purchase Card (GPC) holders from dozens of agencies currently leverage these approved commercial shopping portals (including Amazon business and Overstock Government) for the purchase of routine, commercial items (to the tune of ~$40M in annual spend).
  • NASA’s Solutions for Enterprise-Wide Procurement (SEWP) Government-Wide Acquisition Contract for IT and AV related products and services. SEWP’s draft RFP is available for review and comment with the full RFP expected to be released in 2024. SEWP can be used by all Federal Agencies and their approved contractors and accounts for more than $10B in annual sales.
  • Explore opportunities at the state government level; organizations like NASPO (National Association of State Procurement Officials) issue solicitations for cooperative procurement contracts for goods and services across many of the same categories as their counterparts in the Federal government.

Get the Insights You Need to Grow Your Public Sector Sales!

Public sector sales are challenging, complex, and highly competitive. Successful suppliers invest the time to regularly analyze performance and identify changes that need to be made in their sales strategy.  As a current or prospective supplier, it’s important to understand the market as a whole and what is trending; Warwick can help answer important questions such as:

  • What is the demand for the products I offer?
  • What Agencies should I be marketing to?
  • Are my prices competitive? 

Reach out to learn more about how we can help you save valuable time in understanding what the government is buying, and how you stack up against the competition.