High corporate profit and a growing number of businesses have pushed up demand, and volatile raw material costs have increased prices, but high competition among suppliers has kept prices from increasing too rapidly
Los Angeles, CA (PRWEB) January 27, 2015
Buyers of locker systems have a buyer power score of 3.5 out of 5. Although buyers have the upper hand during the negotiation process, an improving economy and an increase in government funding have created more demand for lockers, enabling suppliers to raise prices, says IBISWorld analyst Deonta Smith. Overall, buyers benefit from a low market share concentration and low switching costs. However, volatile input costs and moderate ownership costs hurt buyer power.
Low market share concentration aids buyers during the purchasing process. High levels of competition make it more difficult for suppliers to increase their share of revenue, especially as they fight for new buyers. Buyers can take advantage of the competition by pitting suppliers against one another. Buyers also benefit from low switching costs; although there are installation and removal costs, buyers can easily switch to a supplier that offers similar lockers, continues Smith. A moderate level of substitute goods also lowers switching costs because buyers have more alternatives to select from, although they must ensure such options are practical.
Although some buyers looking for commoditized lockers benefit from the low product specialization, which allows them to pit similar suppliers against each other, the low level hurts buyers that want customized locker systems. Few suppliers offer specialized products and they can charge a premium. In addition, volatile steel and plastic prices make it difficult for suppliers to budget for costs. Many suppliers absorb the higher costs and lower their margins to keep locker prices from spiking; although buyers benefit from the effects of price competition within the market, this leaves buyers with little room to negotiate even lower prices. Finally, moderate total costs of ownership require buyers to budget for maintenance costs and related good purchases, which can add up significantly.
Lockers typically last 10 to 20 years, and buyers should ensure they are satisfied with their purchase to avoid premature replacement costs. Buyers can ask for bulk order or early payment discounts. Although negotiation power is expected to remain high, buyers should purchase locker systems now before prices rise in the next three years. For more information, visit IBISWorld’s Locker Systems procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of locker systems. Lockers are made from a variety of materials, including wood, metal and plastic. Lockers serve as individual secure storage units for storing personal belongings. Buyers include commercial businesses, K-12 schools, law enforcement buyers and individual consumers that commonly purchase locker system products. Suppliers of locker systems include product manufacturers and wholesalers. This report excludes general storage units, food storage units, cabinets and shelving, mailboxes and other furniture and fixtures.
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.