The price of outdoor heaters is forecast to increase due to rising demand as well as growth in freight and labor costs for suppliers
Los Angeles, CA (PRWEB) June 20, 2014
Outdoor heaters have a buyer power score of 3.3 out of 5. The score indicates that neither buyers nor suppliers have a distinct advantage with regard to negotiating prices. Suppliers have been raising the price of outdoor heaters during the three years to 2014, in part due to increasing transportation costs, says IBISWorld analyst Jeffrey Cohen. Still, buyers benefit from a low level of product specialization, low market share concentration and low switching costs. Major market suppliers include Infratech, Lava Heat Italia and SunGlo.
During the past three years, transportation costs have negatively affected suppliers and buyers alike. Specifically, freight costs and the price of gasoline increased, and suppliers passed some of these costs on to buyers by increasing the overall price of outdoor heaters. Additionally, as increasing transportation costs cut into suppliers' profit margins, suppliers have become less willing to negotiate lower prices with buyers, hurting buyer power. Another factor that has harmed buyer power is high price driver volatility. This trend is due in large part to the high volatility in the price of key inputs (i.e. steel and aluminum) that go into outdoor heaters, continues Cohen. High price driver volatility harms buyer power because it leads to more difficulty on the buyer's behalf when budgeting for purchases.
Despite these strains on buyer power, outdoor heaters are standardized products, which allows buyers to readily compare the prices and offerings of various vendors. Because there are several suppliers of outdoor heaters throughout the retail, wholesale and manufacturing channels, buyers also have a wide selection of suppliers to choose from. In addition, because there are many suppliers throughout the United States, buyers have many options when choosing a supplier. Therefore, the fragmented nature of the market positively affects buyer negotiating power. Lastly, switching costs are low in the outdoor heaters market because there are several suppliers that sell outdoor heaters, thereby allowing buyers to pit suppliers against one another before making a purchase. For more information, visit IBISWorld’s Outdoor Heaters 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 commercial-grade outdoor heaters, which can stand on the ground or on tables (e.g. heat lamps), or can be mounted to ceilings or walls. They include infrared heaters, patio heaters, propane heaters, electric heaters and natural gas heaters. The types of buyers that typically purchase outdoor heaters include restaurants, hotels and consumers. Although some information about customized heaters is included, most businesses choose to buy standardized outdoor heaters, which are the focus of this report. This report excludes indoor heaters, as well as heater accessories, such as covers and additional fuel. This report also excludes fire pits, furnaces and other equipment that is able to heat an outdoor space.
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.