The AOP Buyer Power Score is a new content offering created in partnership with ProcurementIQ that rates the balance of power between buyers and sellers for a particular spend category.
Today we are reviewing street sweeping services.
The Buyer Power Score for street sweeping services is -1.4 on a scale of -5 to 5, with -5 signifying low buyer power and 5 meaning high buyer power. The more power a buyer has the greater leverage they have to get lower prices and better contract terms.
This Buyer Power Score comes with a ‘Buy Later’ recommendation. The scope of the services include Mechanical Sweeping, Regenerative Air Power Sweeping, and Vacuum Assisted Sweeping Services but not driveway cleaning services.
How to Use this Information
These services are priced per ‘curb mile,’ and concerns about the cost of diesel fuel are both increasing rates and raising concerns about the volatility of the cost drivers. With an estimated 14% profit margin, providers may be able to absorb some of the added fuel costs – especially if spikes are short-lived – but longer term increases will be passed along to buyers in some form. The silver lining for this category is the possibility that little specialization and high concentration of providers (especially in urban markets) will preserve the option for bid-based competition.
We have partnered with ProcurementIQ to dig into their treasure trove of over 1,000 indirect category intelligence reports, with new insights every Friday. To dig deeper into the street sweeping services category, click here.