High input price volatility has been making it difficult for suppliers to project their costs over time.
Los Angeles, CA (PRWEB) June 09, 2014
Drum handling equipment has a buyer power score of 3.1 out of 5, indicating an almost even split of power between buyers and suppliers; however, with a score above 3.0, buyers hold a slight upper hand in negotiations. A myriad of factors should be considered when purchasing drum handling equipment, including supply chain issues, pricing trends and product characteristics. While these factors are extremely dynamic, IBISWorld research analyst Scott Winters says current market conditions are changing in favor of buyers, making it an ideal time to make a purchase.
The supply chain for drum handling equipment is moderately risky, slightly hampering buyer power. Drum handling equipment is typically made from stainless steel, forcing manufacturers to rely on the notoriously unstable iron and steel market. In the past three years, steel prices have exhibited very high volatility, says Winters, “making it more difficult for suppliers to forecast their future costs and set competitive prices.” Additionally, suppliers use a pricing model in which input costs are directly incorporated into product prices, meaning that a sudden spike in steel prices would cause a corresponding spike in drum handling equipment prices. In the past three years, prices have been increasing at an estimated 2.3% annualized rate. Furthermore, because the market is moderately specialized, there are relatively few manufacturers currently producing drum handling equipment, reducing buyer choice and hindering negotiations. Current major vendors include Wesco International Inc., WW Grainger Inc., Systemax and Northern Tool & Equipment Co.
Buyers can still gain the upper hand at the negotiating table by taking advantage of a few powerful market characteristics. The availability of substitute products gives buyers added leverage, and buyers can seek discounts by bundling related products together into a single purchase. It is also easy to switch suppliers if buyers find a good deal or special offer elsewhere. Finally, market prices are beginning to stabilize after a tumultuous few years, reducing the pressure on buyers to make a purchasing decision quickly. All in all, buyers that take advantage of low switching costs and low price volatility can easily gain a great value purchase when buying drum handling equipment. For more information, visit IBISWorld’s Drum Handling Equipment procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of drum handling equipment. Drum handling equipment is used to transport barrels and drums. Drum handling equipment includes lifters, stackers, rotators, mixers and forklift attachments. This report also includes accessories for this equipment, such as drum openers, drum racks and spill containment platforms. Drum handling equipment can be purchased to fit all drum sizes and varying weight loads. These products are typically sold through material handling equipment manufacturers and distributors. This report excludes other types of material handling equipment, such as industrial trucks, forklifts and conveyors.
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.