The cost of rental uniforms will rise as the economy recovers and firms hire more employees
Los Angeles, CA (PRWEB) January 27, 2014
Uniform rental companies have a buyer leverage score of 3.9 out of 5. The higher the score, the better negotiating conditions for buyers. According to IBISWorld procurement analyst Caitlin Newsom, “The high score reflects the high profit margins and numerous costs associated with rentals that allow a buyer to negotiate a lower price”. A rental contract considers many factors, such as length of contract, distance to buyer, uniqueness of uniform, embroidering, laundering, frequency of laundering, number of uniforms and repairs to uniforms. Each of these can be negotiated, giving the buyer more power to determine the overall price.
Additionally, the large number of suppliers gives buyers some leverage. There are many regional, small-size rental companies vying for customers. If a buyer has offices nationwide, however, this limits their negotiating power because regional suppliers will be unable to serve all their offices. Uniform rental suppliers have large profit margins, which also helps boost buyers' negotiating power. “The most important tool a buyer has for negotiating is understanding all possible charges in their contract”, says Newsom. Suppliers add charges for repairs; surcharges for wastewater disposal or energy fees; and charges for new employees. Suppliers will also launder uniforms based on the number of uniforms in a contract rather than the amount they pick up from the buyer.
A buyers' ability to negotiate is limited by the rising costs of delivering and manufacturing uniforms. With gasoline and cotton prices rising, overall costs are growing for suppliers, cutting into their profit margins. Also, the threat of impending increases in regulation for laundering uniforms could raise costs even further. The four largest vendors in the market are Cintas Corporation, Aramark Corporation, UniFirst Corporation and G&K Services Inc.
For more information, visit IBISWorld’s Uniform Rental procurement category market research report page.
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IBISWorld Procurement Report Key Topics
Uniform rental companies offer embroidering, various styles of uniforms, new uniform designs, laundering, inventory tracking, automatic uniform inspections and upgrades, and account monitoring. Uniform rental includes renting or leasing the uniforms. Leasing the uniforms includes all of the previously stated services except for laundering. Uniform rental companies also offer mats, cleaning services and cleaning supplies. These rental companies are usually regionally located while the largest companies are national chains. This report does not include rentals of government uniforms, such as for the military, law enforcement, emergency medical technicians or firefighters.
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.