Relay prices are anticipated to grow over the next three years as downstream market demand continues to expand.
Los Angeles, CA (PRWEB) July 19, 2014
The relays market exhibits a buyer power score of 3.2 out of 5, meaning that buyers have moderate negotiation power. Buyers benefit primarily from low market concentration. Thousands of vendors in the market compete for business due to the low barriers of entry. Manufacturers and wholesalers generally comprise the market. “Low market concentration forces vendors to compete on the basis of price, customer service and quality assurance, which benefits buyers,” says IBISWorld procurement analyst Cameron Roark.
Additional factors that benefit buyers of relays include low switching costs and steady prices. Relays have low switching costs because there are many vendors in the market that offer the same products and services. While customization options for specific applications are offered, many vendors are flexible enough to cater to a multitude of features. “Relay prices have displayed limited fluctuations in the past three years despite rising demand because of competition and decreasing input costs,” adds Roark.
In the past three years, relay sales have been growing in response to improving housing and industrial production markets. Rising demand and falling input costs have both contributed to rising levels of profit. Profit has been steadily rising in the past three years, encouraging larger vendors to consolidate smaller vendors to gain market share. The top four vendors in the market are Siemens, ABB Ltd., Panasonic, and General Electric. Consolidation efforts work for and against buyer power score; it benefits buyers by lowering the average vendor risk, but works against buyer power score by contributing to higher levels of market concentration, hindering competition in the market.
Buyers can use the high number of vendors and low switching costs as leverage to improve their rates. Buyers can typically negotiate with vendors to secure discount prices when purchasing in bulk, especially for large vendors that have higher average profit margins than smaller vendors. Buyers are encouraged to enter into contracts to avoid rising costs as relay prices are forecast to rise in the three years to 2017. For more information, visit IBISWorld’s Relays procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of relays, which are electrically operated switches. They involve two electrical circuits, with the electromagnet attached to one circuit mechanically operating the other circuit. They are commonly used for digital signal amplification and logic functions, among others. Relays come in variety, such as latching, reed, solid-state, buchholz, ratchet, coaxial, automotive and digital protective relays. This report includes contactors, but does not include mechanical switches or circuit breakers.
Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Market Profitability
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics
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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.