Rising demand from increasing industrial activity is expected to continue to allow suppliers to raise prices from 2015 to 2018
Los Angeles, CA (PRWEB) April 21, 2015
Corrugated boxes have a buyer power score of 2.9 out of 5, indicating slightly positive negotiation conditions for buyers. “Beneficial negotiation conditions include a low level of product specialization and limited switching costs, which allow buyers to switch between operators without risking quality,” according to IBISWorld business research analyst Jesse Chiang. However, buyer power is limited due to a low availability of substitutes for corrugated boxes, which forces buyers to make purchases within the corrugated boxes market.
Manufacturing boxes requires minimal machinery and expertise, as does handling and distributing such goods. As such, corrugated boxes are fairly commoditized goods that differ minimally in quality from supplier to supplier. This low specialization allows for numerous operators to enter the market and compete effectively with existing suppliers. With low specialization, buyers have more suppliers to choose from. Furthermore, low switching costs allow buyers to switch easily between suppliers without risking quality or investing in labor to adjust operations to a different kind of box. “This factor benefits buyer power, as it allows buyers to select suppliers specifically on price or other important criteria,” says Chiang.
A low level of substitutes limits buyer power because although buyers can use solid fiber boxes or plastic containers, both have significant drawbacks. Solid fiber boxes are thinner and not typically viable shipping containers. Further, plastic containers are more expensive than corrugated boxes and would drastically increase costs for buyers with large-volume shipping or storage needs. Buyers that find negotiation conditions to be unfavorable could be forced to buy market products regardless. Additionally, the price of corrugated boxes has been increasing as suppliers have adjusted prices in line with the rising cost of paper and swelling demand conditions. Therefore, buyers should engage in contracts when possible to keep prices low and leverage the full value of the contract to receive significant per-unit discounts. Major vendors include International Paper Co., Georgia-Pacific Corporation and Packaging Corp. of America. For more information, visit IBISWorld’s Corrugated Boxes procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of corrugated boxes, which are cardboard boxes made with thick walls used for storage and shipping purposes. Corrugated boxes are available via manufacturers, wholesalers and retailers. This report excludes storage chests, liquid containers and pallets.
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.