Los Angeles, CA (PRWEB) December 27, 2013
The buyer power score for electrical safety devices and accessories is 3.5 out of 5. Buyer negotiating power is high due in part to high competition among suppliers and low switching costs. There are about 10,000 suppliers competing for market share, including GE Energy, Eaton Corporation ABB Ltd. and Siemens AG. Since electrical safety devices are produced fairly uniformly across manufacturers, it is hard for suppliers to distinguish themselves based on product quality. All electrical safety devices need to be manufactured according to specifications set by the Underwriters Laboratories in order to be compatible with wiring and machinery. According to IBISWorld analyst Caitlin Newsom, “This highly competitive market increases a buyer's ability to negotiate a lower price for these products. Additionally, suppliers are motivated to continue negotiating with long-term buyers to retain clients, since low switching costs and short buying lead times can encourage customers to look to other suppliers to meet their needs.” There is a very low cost to the buyer to switch suppliers. Generally, buyers of electrical safety devices do not enter into multiyear contracts with suppliers, giving the buyer more freedom to switch suppliers. The biggest cost of switching is the risk involved in testing out a new supplier.
Additionally, RCDs are more expensive when combined with other safety features. When an RCD is combined with overcurrent protection, this is called a ground fault circuit interrupter (GFCI). A GFCI stops the current in an outlet when something gets inserted to prevent electric shock. A GFCI is more expensive than a normal RCD device, but has added protection. “However, volatile input costs have led to price volatility, which has constrained buyer purchasing power,” continues Newsom. Prices for input materials for electrical devices, such as copper and silver, are highly volatile. Manufacturers pass on the increase in input costs to buyers in the form of higher product prices. Prices have risen over the past three years as input costs grew, making negotiating more difficult for the buyer. As the economy rebounds, boosting manufacturing and construction activity, prices are estimated to continue rising alongside higher demand for electrical safety devices and accessories.
There are a number of factors that a supplier takes into account when setting a price. The more RCDs a buyer purchases, the more willing the supplier is to lower the per-unit price. Additionally, the type of RCD plays a large role in determining the price. The number of poles an RCD has allows the device to work for different phase AC supplies. A two pole RCD is for use on single-phase alternating current (AC) supplies, while a four pole is for use on three-phase and neutral supplies. The rated current is chosen based on the maximum sustained load current the RCD can carry. Industrial buyers will need to purchase RCDs with a higher-rated current to support their machines, while a RCD for an office needs a much lower-rated current. The sensitivity determines what level of safety the RCD needs to provide. High sensitivity is for life injury protection, medium sensitivity is for fire protection and low sensitivity is for machine protection. The higher level of safety comes at a higher cost for the buyer. Additionally, RCDs are more expensive when combined with other safety features. When an RCD is combined with overcurrent protection, this is called a ground fault circuit interrupter (GFCI). A GFCI stops the current in an outlet when something gets inserted to prevent electric shock. A GFCI is more expensive than a normal RCD device, but has added protection. For more information, visit IBISWorld’s Electrical Safety Devices & Accessories procurement research report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of electrical safety devices. These products include residual current devices (RCDs), isolating transformers, shuttered sockets, recessed sockets and shrouded plugs, insulated metal pins, transparent sockets and plugs, and four-way switched socket outlets. The main product out of these devices is residual current devices. An RCD is an electrical wiring device that disconnects a circuit if it senses an excess flow of electricity. Protective wear for electricians is not included in this market.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
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.
Read the full story at http://www.prweb.com/releases/2013/12/prweb11439775.htm.
Copyright©2012 Vocus, Inc.
All rights reserved