Price will continue to increase during the next three years as construction activity picks up further
Los Angeles, CA (PRWEB) May 18, 2014
Portable generators have a buyer power score of 3.7 out of 5, reflecting slightly higher buyer power. Buyer power is bolstered by relatively low price growth that has also been nonvolatile. “This pattern of growth is expected to persist during the next three years, which will benefit buyers that choose to delay purchasing due to budgetary constraints,” says IBISWorld business research analyst Hayden Shipp. Still, those that can afford to purchase sooner rather than later are encouraged to do so on account of price growth.
The vendor structure for this market has mixed effects on buyer power. Vendor profit margins generally rise alongside growth in demand for building materials and equipment for contractors. This trend has improved the financial health of vendors and their willingness to offer discounts. “For example, nearly all vendors offer significant bulk discounts,” says Shipp. Due to portable generators' restrained price growth, buyers can benefit from waiting to act until a bulk purchase is needed. Also, vendors compete across their different segments, which include retail, wholesale and vehicle dealer. Still, buyers' choices remain constrained by the vast market share held by dominant retailers. Because of their greater purchasing power, other vendors strive to match their prices.
While price variation is limited across vendors, prices vary significantly between generator models, enabling buyers to choose a machine that fits their needs and budget. Portable generators are offered in a range of fuel types, including diesel and alternative fuels. These options boost up-front price but reduce total cost of ownership (TCO). The share of portable generators on that market that are California Air Resources Board (CARB) compliant continues to rise, further reducing TCO due to greater fuel efficiency. Also, buyers with limited and non-recurring portable generator needs can take advantage of rental costs that are quite low, making the rental option a viable substitute for many buyers and enhancing their negotiating power. However, the standby generator substitute option does not boost buyer power, since these products are sold by the same vendors that sell portable units. Major vendors include Home Depot Inc., Wal-mart Stores Inc., Amazon.com and Lowe’s Companies Inc. For more information, visit IBISWorld’s Portable Generators procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of portable generators. Portable generators supply electricity temporarily at jobsites, campsites or homes. These devices usually run off gasoline; however, natural gas, propane and diesel versions are also available. Portable generators may be conventional models or they may be inverter generators. Inverter generators were introduced in the early 2000s and are smaller, lighter, quieter and more fuel efficient than conventional models. They are also more expensive to purchase.
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
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