A rise in input costs for carpet laying services will prompt many suppliers to pass higher costs down to buyers
Los Angeles, CA (PRWEB) February 08, 2015
The carpet laying services market displays a buyer power score of 3.3 out of 5, indicating that buyers have a greater degree of power during the negotiation process than suppliers. There are about 11,000 suppliers of carpet installation services, signifying a low level of concentration. “In the three years to 2014, carpet installation prices have risen primarily due to rising demand from increased activity in the construction sector,” according to IBISWorld business research analyst Kiera Outlaw.
In addition to demand drivers, a number of other market characteristics have worked in favor of buyers. Namely, the low level of market share concentration suggests that suppliers primarily compete based on price. As a result, buyers have been able to pit suppliers against each other to get the best price; however, buyers must take a supplier's level of experience and qualifications into consideration during the selection process. This works against buyer power because more experienced suppliers charge higher rates. Even though a supplier can charge a low price, it does not necessarily mean they have ample experience regarding every commercial carpet installation project. However, a low level of product specialization within the market has been supporting buyer power. Carpet laying services have few formal educational requirements and, in some states, few voluntary certification requirements, buyers can easily source a reputable supplier to undertake their carpet installation project. Unfortunately for buyers, low profit margins among suppliers mean that they tend to be inflexible on pricing. “However, buyers can leverage the high availability of substitute goods to counterbalance this trend during negotiations,” says Outlaw.
Buyers have benefited from low volatility in carpet installation prices during the period, which has enabled them to budget for their carpet installation expenses without worrying about sudden price increases. Carpet installation prices are forecast to continue increasing through 2017, and buyers should seek to establish contractual agreements now to lock in current rates and hedge against price increases. For more information, visit IBISWorld’s Carpet Laying Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of carpet laying services. Carpet layers prepare surfaces for the installation of carpet and provide new installation, addition, alteration, maintenance and repair services. Flooring contractors primarily provide these services. This report does not include the installation of other flooring materials, such as linoleum, wood, concrete, stone or ceramic flooring. The report also excludes the purchase of carpet.
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.