Los Angeles, CA (PRWEB) March 28, 2014
Portable toilet rental has a buyer power score of 3.6, signifying that buyers have more negotiation power than suppliers. “Low market share concentration and low switching costs strengthen buyer power,” says IBISWorld procurement analyst Donna Khuu. “Conversely, medium supply chain risk and rising demand weaken buyer power.”
The market structure of portable toilet rental is highly favorable for buyers. Low market share concentration indicates that the market is highly fragmented and many suppliers are present. As such, suppliers must compete intensely to gain market share. “Buyer power is strengthened because suppliers are more willing to lower price to gain a competitive advantage,” says Khuu. Buyers can leverage different suppliers in negotiations to pressure a supplier to provide a better rental rate. Low product specialization also aids buyer power. Portable toilet rental is homogeneous across suppliers, which means buyers do not need to sacrifice service for a lower price. Furthermore, buyers can easily find a supplier that fits their needs. Therefore, if an incumbent supplier increases its price, the buyer can find a more cheaply priced new supplier. Major suppliers include Waste Management Inc., Northwest Cascade Inc., United Services Inc. and Rumpke Consoludated Companies Inc.
Yet, buyer power has also been weakened by a number of factors. Medium supply chain risk has caused suppliers to have less leverage over the price of their key inputs, particularly crude oil. As a result, suppliers have been passing on increasing input costs to buyers. Additionally, when suppliers' profit margins are at risk, suppliers will not be as willing to negotiate prices despite high competition within their market. Buyer power has been weakened further by increasing demand for portable toilet rentals from construction and entertainment companies and state and local governments. Higher demand pressures prices upward. Buyers can strengthen buyer power by selecting suppliers that have safeguarded profit margins by purchasing key inputs in advance (e.g. fuel hedging). These suppliers are expected to be less sensitive to input price fluctuations. Buyers can also purchase complementary products and services to receive discounts.
For more information, visit IBISWorld’s Portable Toilet Rental procurement category market research report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld.
Like IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189.
IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of portable toilet rental services. Buyers include construction, agriculture or entertainment companies and federal, state or municipal governments. Suppliers, also known as portable restroom operators, rent and service portable toilets, which include standard and Americans with Disabilities Act-compliant portable toilets, trailer-mounted portable toilets and restroom trailers. Suppliers are also responsible for the delivery and pickup of the portable toilets. The report does not include sink or shower rentals and septic tank or cesspool pumping and cleaning.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
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.