Nonresidential construction activity and operating costs are expected to continue rising in the years to 2017, which will prompt suppliers to increase prices
Los Angeles, CA (PRWEB) January 26, 2015
Snow removal services have a buyer power score of 3.5 out of 5, which reflects a slight advantage for buyers in negotiations. Buyers have various purchasing options when dealing with suppliers, such as multiple pricing models and a wide selection of related services. Because snow removal services are seasonal, buyers have ample time to thoroughly research and evaluate suppliers before entering into a supply contract. “These favorable market factors effectively offset the risk imparted by unstable input costs and the unpredictable rate of snowfall,” according to IBISWorld business research analyst Scott Winters.
The market for snow removal services is extremely fragmented with more than 22,000 total suppliers, the vast majority operating as nonemployers and catering to their local area. A large selection of suppliers allows buyers to compare multiple bids with ease and enhances price competition in the market. Industry certifications give buyers valuable insight into a supplier's potential performance, which improves the likelihood of hiring a qualified supplier. Buyers can take advantage of a number of different pricing models, such as per-occurrence and per-season models. “With adequate research, buyers can select the pricing model that maximizes value and minimizes risk,” said Winters.
However, a few market characteristics hurt buyer power, such as the lack of substitute services and the risk of spiking input costs. For most buyers, snow removal services are a necessary purchase, which reduces the availability of substitutes and gives suppliers leverage. Another important risk facing buyers is the rising price of deicing salts and chemicals as the winter season progresses. Input cost increases can cause the price of snow removal services to climb steeply and hurt buyer value. Lastly, because of unpredictable snowfall, buyers may have difficulty planning their purchases of snow removal services, which could result in buyers paying too much for services if there is less snow than expected or paying extra fees if there is more snow than expected. Although prices are forecast to continue rising in the next three years, price growth will be stable, benefiting buyers. Major vendors include the Brickman Group, USM Inc. and ValleyCrest Companies. For more information, visit IBISWorld’s Snow Removal Services 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 snow removal services. These services are generally sold to businesses that need to clear snow from their parking lots or sidewalks. Suppliers include nonemployers, sole proprietorships, specialized snow management companies and diversified property maintenance firms. Snow removal services include snowplowing, shoveling, roof clearing, snow hauling and disposal, deicing and salting. Although some suppliers provide additional services, this report does not include general maintenance services such as landscaping, exterior grounds maintenance, repair or janitorial services.
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.