Recovering manufacturing production and commodity price increases will lead to moderate price increases.
Los Angeles, California (PRWEB) November 14, 2013
Packaging services have a buyer power score of 3.5 out of 5, indicating a moderate degree of buyer leverage within negotiations. “This score reflects the large number of contract packaging suppliers competing within the market, as well as the low degree of market share concentration,” according to IBISWorld procurement analyst Hayden Shipp. According to the latest information from the US Census Bureau, there were approximately 1,690 packaging suppliers competing in the market in 2012. The large number of suppliers in the market gives buyers better leverage when negotiating pricing contracts. Furthermore, low switching costs between suppliers give buyers greater flexibility when contracting with packaging service providers in the advent of supply disruptions. Major vendors include Berkeley Contract Packaging Inc., Ryt-way Industries LLC and Sonoco Products Company.
Prices for packaging services have increased slowly over the past decade, underpinned by greater packaging outsourcing from small and medium-sized manufacturers and increased packaging material prices. The benchmark price for packaging services is low, but packaging prices vary significantly depending on the type of packaging material used, the size of the order and the lead time desired. “Buyers also benefit from a low degree of price volatility, which enables buyers to have greater flexibility in making purchasing decisions,” says Shipp. Buyers entering into long-term supply contracts can take advantage of low price trends to secure discounts, but those buying on an ad-hoc basis benefit from lower risk of pricing swings.
The purchasing environment is relatively advantageous to buyers. Lead times average about two weeks, allowing buyers to source packaging services from multiple suppliers and take advantage of favorable trends in pricing materials. The volatility of commodity prices for plastic resin and wood pulp represent a potential risk in the supply chain for buyers, however, given that those suppliers typically pass along commodity price increases in packaging materials directly to buyers.
For more information, visit IBISWorld’s Packaging Services procurement research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of packaging services. Suppliers provide both manual packaging and machine-assisted packaging for client-owned materials. Suppliers provide packaging services for a wide range of items, including agricultural byproducts, food, pharmaceuticals and a variety of other manufactured products. Suppliers do not provide printing services for packaging materials, however.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.