Demand is anticipated to wane as interest rates rise, affecting demand for the construction markets.
Los Angeles, California (PRWEB) November 16, 2013
Scaffolding rentals have a buyer power score of 3.1 out of 5. A high score indicates a competitive advantage for the buyers. This score reflects a high level of competition among suppliers, which poses as a tool for negotiating low prices. “Further, for larger projects, contractors are encouraged to request multiple quotes for a project, forcing suppliers into bidding wars,” according to IBISWorld procurement analyst Deonta Smith. Additionally, due to the high level of competition, buyers are benefactors because buying lead times are shorter and price is less volatile than in the wholesale segment.
Supplier margins, although still healthy, are much smaller than they were before the recession, indicating a supplier's willingness to be flexible in distressed times. “However, margins have increased since the recession as both residential and nonresidential sectors have increased productivity,” says Smith. Prices were offset by increases in input prices, and, as a result, scaffolding rental prices have pushed pricing power back toward suppliers.
Prices can also vary depending on the buyers' proximity to the rental retailer. Being farther from a retailer can harm a buyer's negotiating power because of the increased cost of transportation. Such additional transportation costs and extended buying lead times may deter customers and contractors from retailers who are farther away. Major vendors include Harsco Corporation, Lowe’s, Home Depot Inc. and United Rentals Inc.
Some related service characteristics are not conducive to buyer power, including the cost of scaffolding erecting services. This is a common cost within the rental sector because do-it-yourself professionals and smaller contractors may not be qualified for or hold certification for scaffolding erecting construction, which is mandatory for scaffolding operating, according to the Occupational Safety and Health Act of 1970. Finally, measuring product quality can be a dubious task because nearly all products appear uniform to the untrained professional. Fortunately, best practice suggests that scaffolding providers are able to train and certify buyers, thus increasing buyer power as it relates to future purchases.
For more information, visit IBISWorld’s Scaffolding Rental procurement research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of rental scaffolding erector sets. Scaffolding erector sets include rolling ladders, brackets, hangars, bases, jacks, drywall lifts, scaffold racks, ramps and carts. Renting or leasing scaffolds can also include purchasing scaffold platform and erecting services. Fencing and ladders products are not discussed in this report.
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
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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.