- Environmental factors
This is an essential part of industrial buying; this includes economic factors, technological factors, political and legal factors. The economy determines how many products the industry can buy and sell. The higher the demand or the belief of a higher order means that the business will be purchasing more products to meet the demand of its customers, and the reverse is the case where the demand is low. Industrial buying is affected by technological advancement that occurs. The presence of new technology helps the business determine what materials they should opt for. For instance, if they had by-passed a particular material due to the lengthy production process, they may decide to purchase or produce that if technology comes, which reduces the production time frame. Political and legal factors affect industrial buying, such as government policies; for instance, if the tax burden on a particular material is increased, the business may seek an alternative.
- Interpersonal factors
This is a combination of interest, authority, and status, affecting industrial buying. Different people involved in the buying process who have differences in their background are bound to have other interests, which affects the company’s buying interest. Within an organization, there is always that individual with the final purchase option, without whose assent the company cannot make any purchase, thus affecting the buying process. Also, in specific organizations, the individual responsible for purchasing goods and the person who makes the actual purchase may differ. This, in turn, affects industrial buying where the person making the actual purchase is of a lower rank.
- Organizational factors
Organizational factors that affect industrial buying includes aims, methods, system, policies, and organizational structure. The purchases made by a company are affected by the company’s dreams and goals. The purchases have to reflect these goals that have been set out. The purchase of goods has to be according to the process laid down by the company; it could be done via catalog or through an agreement made with the seller. Also, the business might have policies relating to its purchases. These policies should be adhered to, such as if they want to help the local economy and limit their purchases to local sellers. How a company is structured also affects how goods are purchased, there may be an individual with the power to make such purchases, or a department may have been dedicated for the purpose.
- Personal factors
These factors are a combination of age, level, risk-taking, income, education level, and personality. Age is an essential factor in industrial buying; the older employee believes in continuity while the younger employee is more open to taking up new suppliers. Education also provides the buyer with an advantage as he can make logical decisions. For someone who is not afraid of taking risks, the buying decisions of such a person are bold choices. The level of the buyer at work, income rate, and personality also affect buying options.
- Monetary factors
Purchases made by a company are affected by the price of goods. The lower the purchase price, the more the buy the organization creates and vice versa when the goods are expensive; the company may seek an alternative product in this instance.