Though overall demand for security guard services has risen, price growth has been slowed by a rising number of firms
Los Angeles, CA (PRWEB) September 27, 2013
Security guard services have a buyer power score of 3.55 out of 5, which indicates that buyers of these services have a medium-high degree of leverage in the purchasing process. According to IBISWorld procurement analyst Hayden Shipp, the process has several elements that work in a buyer's favor: it is initiated with a request for proposal (RFP), vendors compete through their proposals and price bids and vendors' markups over their guards' wages are transparent. Purchasing power is limited, however, by low industry profit margins that reduce suppliers' ability to cut prices, by rising demand for security services that push up prices and by low availability of substitute products.
Security guard service providers are differentiated by size, specialty and range of services, and the optimal purchase for guard services hinges on considerations beyond price. Price functions as a tiebreaker for bids that are considered to be technically equal, as long as bid prices are close to the buyer's benchmark. As such, says Shipp, “the buyer's best tool for optimizing the purchase is an RFP, because it gets at the heart of vendors' markups and uncovers red flags like high employee turnover, inadequate training and high costs for liability insurance, worker compensation and unemployment insurance.”
No prevailing market price exists for security guard services because guards vary in their training levels and the companies they work for have a range of business models with different markups. This market structure results in an hourly price per guard that can range from $10 to $100 per hour, depending on the type of guard. Inexpensive guards work for observe-and-report agencies and are not trained to act in high-risk situations. These guards typically cost $12 to $20 per hour. An armed security guard usually costs between $18 and $25 per hour. Specialized guards who are trained to work effectively in high-threat situations and detain people command even higher prices. For more procurement information, visit IBISWorld’s Security Guard Services procurement research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of security guard services. Outsourced security guards patrol a company’s facilities and grounds and control access to company property. Guards serve as a deterrent to crimes and trespassers and they record and report suspicious activities. Their access-control duties may involve personnel screening, visitor processing, package screening, traffic control and vehicle inspection. Security guards are usually dedicated to a particular facility, though mobile patrol units can be used to serve multiple locations and clients. Security guard services may include bodyguard services, but they exclude investigative or detective services and guard dog rental.
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.