Greater competition from similar suppliers and technological substitutes will slow price growth.
Los Angeles, CA (PRWEB) December 10, 2013
Buyers of inventory accounting services have a buyer power score of 4.2 out of 5. Scores closer to 5 exhibit a higher level of buyer negotiation power. According to IBISWorld procurement analyst Aileen Weiss, “negotiation power primarily improved in the three years to 2013 as competition among suppliers increased and substitute products and services became more accessible”. Additionally, growth in industrial production and corporate profit resulted in bigger inventories, creating a greater need for services and a rise in prices. However, buyers are expected to maintain high negotiation power as new technology and in-house options become easier to apply.
The economic recovery has led to greater business and consumer confidence, tempting consumers with more disposable income to increase their number of purchases. As a result, industrial production has risen to meet growing demand, causing inventories and corporate profit to grow as consumers purchased more. Thus, buyers have been more likely to use inventory accounting services to focus on their actual business operations. “This increased demand has caused prices for services to increase gradually”, says Weiss.
Though prices for inventory accounting services have risen, buyers have still been in a favorable position as improving inventory technology has become less expensive and more readily available. In the past, more complex inventory jobs with a wide range of goods or highly specialized products required inventory counting specialists, which limited the number of suppliers from which buyers could choose. In the next three years, however, new software and more user-friendly scanning devices will allow buyers to train employees to complete the inventory count. Bringing services in-house creates more competition for inventory service suppliers, forcing them to lower their prices. As such, buyers maintain negotiation power. Ultimately, buyers should select a service provider that understands their business and specializes in that particular type of inventory. Buyers should consider substitute services for smaller or less specialized inventories and whether employees could be trained to complete the inventory count themselves. High competition will allow for more negotiable prices for buyers of these services. The largest players in the market are RGIS, Reliant Inventory Services, WIS International, and MSI Inventory Service.
For more information, visit IBISWorld’s Inventory Accounting Services procurement research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of inventory accounting services, which is the body of accounting that deals with valuing and accounting for changes in inventoried assets. Inventory accounting service providers count, inventory and collect data on finished goods, work in process and raw materials at locations including retail stores (i.e. convenience stores, clothing stories and liquor stores), groceries, warehouses, educational institutes, hospitals and pharmacies. This report does not include accounting services such as audit, cost, financial, payroll and tax accounting as well as bookkeeping and billing services. It also does not include inventory software systems.
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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