Los Angeles, CA (PRWEB) July 14, 2014
Plastic shipping crates have a buyer power score of 3.7 out of 5, demonstrating a high level of buyer power. According to IBISWorld analyst Scott Winters, buyers gain negotiation power through the product's low level of specialization, low total cost of ownership and high level of substitute goods.
Because plastic shipping crates are made using molds and machinery that forms the plastic along an assembly line, there are few differences, if any, between one shipping crate and another. With this standardization, buyers can turn to many suppliers in the market for their shipping crate needs, boosting negotiation power. Similarly, buyers can look to substitute goods like wooden shipping crates and cardboard shipping crates. The widespread availability of substitute products allows for greater buyer power. Moreover, more businesses are switching to plastic shipping crates compared with other types of crates due to their sustainable nature, which allows for cost savings, continues Winters. Plastic shipping crates offer a longer useful life and are safer for food and other edible goods being shipped. Additionally, plastic shipping crates have a low total cost of ownership, with few costs other than the initial purchase of the crate itself. Also, because many crates are used internationally for shipping, buyers can achieve cost savings in some countries where environmentally friendly crates earn governmental support and subsidies. Buyers also have strong negotiating power due to market fragmentation; buyers are able to search among a wide range of suppliers for the best price. As a result, buyers can easily compare product prices and features from companies such as Orbis, Rehrig Pacific Company and Reusable Transport Packaging before making a purchase.
Although buyers have a great degree of power in the negotiation process, buyer power is limited by supplier input costs like the price of plastic materials and resin. This input is the main component in plastic shipping crate production and its price is tied to notoriously volatile crude oil prices. To mitigate the high and volatile prices, suppliers may pass the additional costs on to the buyer or absorb the additional production cost and face lower profit margins. In both cases, buyers encounter less room for negotiation with suppliers. For more information, visit IBISWorld’s Plastic Shipping Crates procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of plastic shipping crates, which are typically used for storing products or shipping goods from one location to another. Plastic crates provide protection of shipped and stored goods from damage or breakage and simplify the handling of goods. Plastic shipping crates are cleanable and reusable and offer cost savings compared with wooden shipping crates. This report does not include wooden shipping crates, international shipping containers, packaging boxes or bags.
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.